Texas Insurance License Exam Prep P&C
Question & Answers 2025
What are 3 subjects an auto policy covers? - Correct Answers ✅1.
Body
2. The vehicle
3. Assets
Bodily Injury Types - Correct Answers ✅Personal Injury
Med Pay
Uninsured Motorist
No Fault Insurance - Correct Answers ✅State stipulates that parties
cannot file a claim to the other persons insurance policy unless
required in excess. Instead, each party is required to file a primary claim
against their own insurance regardless who is at fault. EX. Florida
Financial Responsibility Laws - Correct Answers ✅State Laws
regulating that people are to carry a minimum coverage amount set by
the state to protect themselves, others, and property.
P.A.P - Correct Answers ✅Personal Automotive Policy
Negligence - Correct Answers ✅The failure to act as a prudent person
would under similar circumstances
,Texas Insurance License Exam Prep P&C
Question & Answers 2025
Legal Liability - Correct Answers ✅Involves proven negligence or fault
Vicarious Liability - Correct Answers ✅Being responsible for the
negligent acts of someone else. Ex. Your children
Absolute or Strict Liability - Correct Answers ✅Stems from hazardous
or dangerous activities that makes the owner liable WITHOUT the
requirement of proof of negligence.
Liability - Correct Answers ✅Being responsible for the damages or
injury you or someone else you're responsible for has done.
The 7 Characteristics of a Contract - Correct Answers ✅1. Personal
Contract
2. Conditional Contract
3. Adhesion
4. Indemnity
5. Aleatory
6. Unilateral
7. Utmost Good Faith
,Texas Insurance License Exam Prep P&C
Question & Answers 2025
Personal Contract - Correct Answers ✅Is stipulation of a contract that
says the contract is for the name person and cannot be transferred to
another.
Conditional Contract - Correct Answers ✅Stipulates set by a contract.
"You can do this, but...."
Adhesion - Correct Answers ✅A stipulation that the contract and it's
language is binding, or "sticks" and the parties agreeing cannot back
out so long as the conditions are met.
Indemnity - Correct Answers ✅The contract agrees to indemnify, or
make whole again the customer. Makes them no better, nor worse, just
whole.
Aleatory - Correct Answers ✅The stipulation that the contract must
include and unequal transfer of money. Ex. The insured signed a
contract a month ago and has paid a single payment of $300. The
company has only received $300, but it on the hook to pay out $30,000
in the event of a loss.
Unilateral - Correct Answers ✅Stipulation that the contract is one-
sided. Ex. The customer doesn't HAVE to pay the insurance company,
but IF they do, then the insurance company HAS to pay out.
, Texas Insurance License Exam Prep P&C
Question & Answers 2025
Utmost Good Faith - Correct Answers ✅Parties believe that both will
deal with eachother honestly and fairly, without misleading or
withholding
Insurance - Correct Answers ✅A contract by which an Insurance
company agrees to compensate an insured for a covered loss in return
for a premium payment.
Underwriting - Correct Answers ✅Process of evaluating policyholders
to determine eligibility for coverage and pricing
Law of Large #'s - Correct Answers ✅Principle that the larger the
examples of data, the more accurate the information
Speculative Risk - Correct Answers ✅Risk of Gain OR Loss Ex.
Gambling or Investment Insurance
Pure Risk - Correct Answers ✅No chance of gain or benefit. The only
kind that insurance deals with.
Exposure - Correct Answers ✅An opportunity for risk or loss
Risk - Correct Answers ✅Possibility of financial loss
Question & Answers 2025
What are 3 subjects an auto policy covers? - Correct Answers ✅1.
Body
2. The vehicle
3. Assets
Bodily Injury Types - Correct Answers ✅Personal Injury
Med Pay
Uninsured Motorist
No Fault Insurance - Correct Answers ✅State stipulates that parties
cannot file a claim to the other persons insurance policy unless
required in excess. Instead, each party is required to file a primary claim
against their own insurance regardless who is at fault. EX. Florida
Financial Responsibility Laws - Correct Answers ✅State Laws
regulating that people are to carry a minimum coverage amount set by
the state to protect themselves, others, and property.
P.A.P - Correct Answers ✅Personal Automotive Policy
Negligence - Correct Answers ✅The failure to act as a prudent person
would under similar circumstances
,Texas Insurance License Exam Prep P&C
Question & Answers 2025
Legal Liability - Correct Answers ✅Involves proven negligence or fault
Vicarious Liability - Correct Answers ✅Being responsible for the
negligent acts of someone else. Ex. Your children
Absolute or Strict Liability - Correct Answers ✅Stems from hazardous
or dangerous activities that makes the owner liable WITHOUT the
requirement of proof of negligence.
Liability - Correct Answers ✅Being responsible for the damages or
injury you or someone else you're responsible for has done.
The 7 Characteristics of a Contract - Correct Answers ✅1. Personal
Contract
2. Conditional Contract
3. Adhesion
4. Indemnity
5. Aleatory
6. Unilateral
7. Utmost Good Faith
,Texas Insurance License Exam Prep P&C
Question & Answers 2025
Personal Contract - Correct Answers ✅Is stipulation of a contract that
says the contract is for the name person and cannot be transferred to
another.
Conditional Contract - Correct Answers ✅Stipulates set by a contract.
"You can do this, but...."
Adhesion - Correct Answers ✅A stipulation that the contract and it's
language is binding, or "sticks" and the parties agreeing cannot back
out so long as the conditions are met.
Indemnity - Correct Answers ✅The contract agrees to indemnify, or
make whole again the customer. Makes them no better, nor worse, just
whole.
Aleatory - Correct Answers ✅The stipulation that the contract must
include and unequal transfer of money. Ex. The insured signed a
contract a month ago and has paid a single payment of $300. The
company has only received $300, but it on the hook to pay out $30,000
in the event of a loss.
Unilateral - Correct Answers ✅Stipulation that the contract is one-
sided. Ex. The customer doesn't HAVE to pay the insurance company,
but IF they do, then the insurance company HAS to pay out.
, Texas Insurance License Exam Prep P&C
Question & Answers 2025
Utmost Good Faith - Correct Answers ✅Parties believe that both will
deal with eachother honestly and fairly, without misleading or
withholding
Insurance - Correct Answers ✅A contract by which an Insurance
company agrees to compensate an insured for a covered loss in return
for a premium payment.
Underwriting - Correct Answers ✅Process of evaluating policyholders
to determine eligibility for coverage and pricing
Law of Large #'s - Correct Answers ✅Principle that the larger the
examples of data, the more accurate the information
Speculative Risk - Correct Answers ✅Risk of Gain OR Loss Ex.
Gambling or Investment Insurance
Pure Risk - Correct Answers ✅No chance of gain or benefit. The only
kind that insurance deals with.
Exposure - Correct Answers ✅An opportunity for risk or loss
Risk - Correct Answers ✅Possibility of financial loss
