1 Exampromax - Stuvia US
Texas Insurance License Exam Prep P&C
Questions and Answers 100% Correct Answers
Already Graded A+
Q: What are 3 subjects an auto policy covers?
Ans: 1. Body
2. The vehicle
3. Assets
Q: Bodily Injury Types
Exampromax - Stuvia US
Ans: Personal Injury
Med Pay
Uninsured Motorist
Q: No Fault Insurance
Ans: 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
Q: Financial Responsibility Laws
Ans: State Laws regulating that people are to carry a minimum coverage
amount set by the state to protect themselves, others, and property.
Q: P.A.P
Ans: Personal Automotive Policy
Q: Negligence
Ans: The failure to act as a prudent person would under similar circumstances
Q: Legal Liability
Ans: Involves proven negligence or fault
, 2 Exampromax - Stuvia US
Q: Vicarious Liability
Ans: Being responsible for the negligent acts of someone else. Ex. Your children
Q: Absolute or Strict Liability
Ans: Stems from hazardous or dangerous activities that makes the owner liable
WITHOUT the requirement of proof of negligence.
Q: Liability
Ans: Being responsible for the damages or injury you or someone else you're
responsible for has done.
Q: The 7 Characteristics of a Contract
Ans: 1. Personal Contract
Exampromax - Stuvia US
2. Conditional Contract
3. Adhesion
4. Indemnity
5. Aleatory
6. Unilateral
7. Utmost Good Faith
Q: Personal Contract
Ans: Is stipulation of a contract that says the contract is for the name person and
cannot be transferred to another.
Q: Conditional Contract
Ans: Stipulates set by a contract. "You can do this, but...."
Q: Adhesion
Ans: 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.
Q: Indemnity
Ans: The contract agrees to indemnify, or make whole again the customer.
Makes them no better, nor worse, just whole.
Q: Aleatory
, 3 Exampromax - Stuvia US
Ans: 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.
Q: Unilateral
Ans: 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.
Q: Utmost Good Faith
Ans: Parties believe that both will deal with eachother honestly and fairly,
without misleading or withholding
Q: Insurance
Exampromax - Stuvia US
Ans: A contract by which an Insurance company agrees to compensate an
insured for a covered loss in return for a premium payment.
Q: Underwriting
Ans: Process of evaluating policyholders to determine eligibility for coverage
and pricing
Q: Law of Large #'s
Ans: Principle that the larger the examples of data, the more accurate the
information
Q: Speculative Risk
Ans: Risk of Gain OR Loss Ex. Gambling or Investment Insurance
Q: Pure Risk
Ans: No chance of gain or benefit. The only kind that insurance deals with.
Q: Exposure
Ans: An opportunity for risk or loss
, 4 Exampromax - Stuvia US
Q: Risk
Ans: Possibility of financial loss
Q: Peril
Ans: The direct cause of a loss
Q: Representation
Ans: Statements on an insurance contract that the insured BELIEVES to be true
Q: 4 Means of Managing Risk
Ans: 1.Reduction
2.Retain
3.Avoid
Exampromax - Stuvia US
4.Transfer
Q: Reduction
Ans: reduce the risk shared by the insured and insurer Ex. Good maintenance
Q: Retain
Ans: Taking risks by retaining the risk to ones self. Ex. Not reporting an accident
to the insurance company, or not getting insurance at all.
Q: Avoid
Ans: Avoiding risk all together. Ex. Not driving at all
Q: Transfer
Ans: Transferring risk. Ex. Getting insurance in the first place transfers risk from
the insured to the insurer
Q: Insurable Interest
Ans: To have insurable interest in something it's loss or damage would have to
cause you to suffer financial or economic loss. Must have ownership
Q: Hazards
Texas Insurance License Exam Prep P&C
Questions and Answers 100% Correct Answers
Already Graded A+
Q: What are 3 subjects an auto policy covers?
Ans: 1. Body
2. The vehicle
3. Assets
Q: Bodily Injury Types
Exampromax - Stuvia US
Ans: Personal Injury
Med Pay
Uninsured Motorist
Q: No Fault Insurance
Ans: 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
Q: Financial Responsibility Laws
Ans: State Laws regulating that people are to carry a minimum coverage
amount set by the state to protect themselves, others, and property.
Q: P.A.P
Ans: Personal Automotive Policy
Q: Negligence
Ans: The failure to act as a prudent person would under similar circumstances
Q: Legal Liability
Ans: Involves proven negligence or fault
, 2 Exampromax - Stuvia US
Q: Vicarious Liability
Ans: Being responsible for the negligent acts of someone else. Ex. Your children
Q: Absolute or Strict Liability
Ans: Stems from hazardous or dangerous activities that makes the owner liable
WITHOUT the requirement of proof of negligence.
Q: Liability
Ans: Being responsible for the damages or injury you or someone else you're
responsible for has done.
Q: The 7 Characteristics of a Contract
Ans: 1. Personal Contract
Exampromax - Stuvia US
2. Conditional Contract
3. Adhesion
4. Indemnity
5. Aleatory
6. Unilateral
7. Utmost Good Faith
Q: Personal Contract
Ans: Is stipulation of a contract that says the contract is for the name person and
cannot be transferred to another.
Q: Conditional Contract
Ans: Stipulates set by a contract. "You can do this, but...."
Q: Adhesion
Ans: 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.
Q: Indemnity
Ans: The contract agrees to indemnify, or make whole again the customer.
Makes them no better, nor worse, just whole.
Q: Aleatory
, 3 Exampromax - Stuvia US
Ans: 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.
Q: Unilateral
Ans: 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.
Q: Utmost Good Faith
Ans: Parties believe that both will deal with eachother honestly and fairly,
without misleading or withholding
Q: Insurance
Exampromax - Stuvia US
Ans: A contract by which an Insurance company agrees to compensate an
insured for a covered loss in return for a premium payment.
Q: Underwriting
Ans: Process of evaluating policyholders to determine eligibility for coverage
and pricing
Q: Law of Large #'s
Ans: Principle that the larger the examples of data, the more accurate the
information
Q: Speculative Risk
Ans: Risk of Gain OR Loss Ex. Gambling or Investment Insurance
Q: Pure Risk
Ans: No chance of gain or benefit. The only kind that insurance deals with.
Q: Exposure
Ans: An opportunity for risk or loss
, 4 Exampromax - Stuvia US
Q: Risk
Ans: Possibility of financial loss
Q: Peril
Ans: The direct cause of a loss
Q: Representation
Ans: Statements on an insurance contract that the insured BELIEVES to be true
Q: 4 Means of Managing Risk
Ans: 1.Reduction
2.Retain
3.Avoid
Exampromax - Stuvia US
4.Transfer
Q: Reduction
Ans: reduce the risk shared by the insured and insurer Ex. Good maintenance
Q: Retain
Ans: Taking risks by retaining the risk to ones self. Ex. Not reporting an accident
to the insurance company, or not getting insurance at all.
Q: Avoid
Ans: Avoiding risk all together. Ex. Not driving at all
Q: Transfer
Ans: Transferring risk. Ex. Getting insurance in the first place transfers risk from
the insured to the insurer
Q: Insurable Interest
Ans: To have insurable interest in something it's loss or damage would have to
cause you to suffer financial or economic loss. Must have ownership
Q: Hazards
