TEXAS PROPERTY AND CASUALTY EXAM AND PRACTICE
QUESTIONS NEWEST 2024 ACTUAL EXAM COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+
1. What is the primary purpose of property insurance?
• A) To cover liability claims
• B) To cover financial loss due to damage to property
• C) To provide health coverage
• D) To insure against life events
2. What type of policy protects an insured from financial loss due
to legal liabilities arising from bodily injury or property damage
to others?
• A) Property insurance
• B) Liability insurance
• C) Life insurance
• D) Health insurance
3. Which of the following is NOT a common exclusion in a property
insurance policy?
• A) War
• B) Nuclear hazard
• C) Fire
• D) Intentional loss
4. What is the term for the amount the insured must pay out-of-
pocket before the insurer pays a claim?
• A) Premium
, • B) Coverage limit
• C) Deductible
• D) Exclusion
5. Which type of insurance policy would cover a business owner for
damage to the building they own and operate out of?
• A) Personal auto policy
• B) Workers' compensation
• C) Commercial property insurance
• D) Health insurance
6. In Texas, what is the minimum liability coverage required for
auto insurance?
• A) 15/30/5
• B) 30/60/25
• C) 50/100/25
• D) 25/50/25
7. Which of the following best describes an "endorsement" in an
insurance policy?
• A) A reduction in coverage
• B) An addition or change to the policy
• C) A cancellation of the policy
• D) The deductible amount
8. What does the term "peril" refer to in an insurance policy?
• A) The cause of a loss
• B) The amount of coverage
, • C) The deductible
• D) The premium
9. Which insurance principle states that the insured should not
profit from an insurance claim?
• A) Indemnity
• B) Subrogation
• C) Insurable interest
• D) Adhesion
10. What is "subrogation" in the context of insurance?
• A) Reducing the premium amount
• B) The insurer's right to pursue a third party for
compensation
• C) The policyholder's right to receive payment
• D) Increasing the policy limits
11. Which part of an insurance policy outlines the
responsibilities and duties of the insured and the insurer?
• A) Declarations
• B) Conditions
• C) Exclusions
• D) Insuring agreement
12. What is the primary difference between a "named peril"
policy and an "open peril" policy?
• A) Open peril policies cover fewer risks
, • B) Named peril policies cover only the risks specifically
listed
• C) Open peril policies exclude all named perils
• D) Named peril policies are more comprehensive
13. In property insurance, what does "replacement cost"
coverage mean?
• A) The market value of the property
• B) The cost to replace the property with new property of
like kind and quality
• C) The actual cash value of the property
• D) The cost of repairs
14. Which term refers to the potential for financial loss in an
insurance contract?
• A) Hazard
• B) Risk
• C) Peril
• D) Deductible
15. What does "actual cash value" (ACV) mean in property
insurance?
• A) Replacement cost minus deductible
• B) Market value minus deductible
• C) Replacement cost minus depreciation
• D) Replacement cost minus insurance premium
16. Which type of insurance covers employees who are injured
on the job?
QUESTIONS NEWEST 2024 ACTUAL EXAM COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+
1. What is the primary purpose of property insurance?
• A) To cover liability claims
• B) To cover financial loss due to damage to property
• C) To provide health coverage
• D) To insure against life events
2. What type of policy protects an insured from financial loss due
to legal liabilities arising from bodily injury or property damage
to others?
• A) Property insurance
• B) Liability insurance
• C) Life insurance
• D) Health insurance
3. Which of the following is NOT a common exclusion in a property
insurance policy?
• A) War
• B) Nuclear hazard
• C) Fire
• D) Intentional loss
4. What is the term for the amount the insured must pay out-of-
pocket before the insurer pays a claim?
• A) Premium
, • B) Coverage limit
• C) Deductible
• D) Exclusion
5. Which type of insurance policy would cover a business owner for
damage to the building they own and operate out of?
• A) Personal auto policy
• B) Workers' compensation
• C) Commercial property insurance
• D) Health insurance
6. In Texas, what is the minimum liability coverage required for
auto insurance?
• A) 15/30/5
• B) 30/60/25
• C) 50/100/25
• D) 25/50/25
7. Which of the following best describes an "endorsement" in an
insurance policy?
• A) A reduction in coverage
• B) An addition or change to the policy
• C) A cancellation of the policy
• D) The deductible amount
8. What does the term "peril" refer to in an insurance policy?
• A) The cause of a loss
• B) The amount of coverage
, • C) The deductible
• D) The premium
9. Which insurance principle states that the insured should not
profit from an insurance claim?
• A) Indemnity
• B) Subrogation
• C) Insurable interest
• D) Adhesion
10. What is "subrogation" in the context of insurance?
• A) Reducing the premium amount
• B) The insurer's right to pursue a third party for
compensation
• C) The policyholder's right to receive payment
• D) Increasing the policy limits
11. Which part of an insurance policy outlines the
responsibilities and duties of the insured and the insurer?
• A) Declarations
• B) Conditions
• C) Exclusions
• D) Insuring agreement
12. What is the primary difference between a "named peril"
policy and an "open peril" policy?
• A) Open peril policies cover fewer risks
, • B) Named peril policies cover only the risks specifically
listed
• C) Open peril policies exclude all named perils
• D) Named peril policies are more comprehensive
13. In property insurance, what does "replacement cost"
coverage mean?
• A) The market value of the property
• B) The cost to replace the property with new property of
like kind and quality
• C) The actual cash value of the property
• D) The cost of repairs
14. Which term refers to the potential for financial loss in an
insurance contract?
• A) Hazard
• B) Risk
• C) Peril
• D) Deductible
15. What does "actual cash value" (ACV) mean in property
insurance?
• A) Replacement cost minus deductible
• B) Market value minus deductible
• C) Replacement cost minus depreciation
• D) Replacement cost minus insurance premium
16. Which type of insurance covers employees who are injured
on the job?
