REAL TEXAS ADJUSTER
REAL TEXAS ADJUSTER EXAM STUDY GUIDE
GRADED A+. QUESTIONS AND 100%
VERIFIED ANSWERS. LATEST 2025/2026
UPDATE
perils: a cause of property losses under an insurance con- tract ex: windstorm, hurricane, explosion, collapse of buil
ing, vandalism, accidental discharge, and theft
1. law of large numbers: a fundamental concept in statisticsand probability that describes how the average of a
random-ly selected large sample from a population. it basically re- lies on the principle that the larger the pool, the more
pre-dictable the amount of losses will be in a given period
2. principle of indemnity: is an insurance principle stating that an insured may not be compensated by insurance company in
an amount exceeding the insured's economic loss.
3. limits of liability: the maximum amount that an insurance pol- icy will pay. it is specified on the policy declaration page.
4. property insurance: coverage for real and personal prop- erty against loss or damage from perils insured against.
5. loss settlement: the process used to determine the amount of the loss
6. actual cash value: the value of the property based on thecurrent cost to replace it minus depreciation.
7. agreed value: the amount that the insured and insureragree upon during the time of policy inception.
8. replacement cost: the cost associated with replacing prop-erty at current market prices
9. market value: the amount that the property is worth in acompetitive market. this amount is accepted by the
buyer andseller.
10. tort: is a wrong that involves a breach of civil duty owedto someone else. this breach determines if that
person is neg-ligence.
11. elements used to determine negligence: a duty owed, a dutybreached, proximate cause, and damages
12. methods to determine loss are:: acv, market value, replace-ment cost, agreed value
,REAL TEXAS ADJUSTER
13. casualty insurance: protects a person from financial lossarising from bodily injury or property
,REAL TEXAS ADJUSTER
damage to others
14. hazard: is a situation that poses a level of threat to life,health, property, or environment.
15. indirect loss: type of loss that does not result from di- rect damage of a covered cause of loss or peril but is insteada
consequence of the direct damage loss.
16. direct loss: direct physical loss to property
17. insuring agreement: this section of the insurance policy specifies what the insurance will provide coverage for
in ex-change for premium payments by their customer.
18. deductible: the amount the insured must pay in a loss be-fore any payment is due from the insurance
company.
19. where is a homeowner percentage deductible always takenfrom?: coverage a structure policy limits of liability
that is used on the declaration page.
20. cancellation: is the termination of an insurance policy byeither side and it must be done in writing
21. liability: a person is legally liable for an accident if thatperson is found responsible for bodily injury or
property damage to another party.
22. negligence: the failure to exercise the care that a reason- ably prudent person can be characterized by the
average per- son.
23. additional living expenses: charges covered by homeown-ers policy over and above policy holders customary living
due to damage by a covered peril and makes the home tempo-rary uninhabitable.
24. exposure: the measure of the possibility of the loss
25. insured: the party to an insurance arrangement that has aninsurable interest in the property that is being
insured.
26. insurer: insurance company
27. loss history: is the insured history of losses with other companies. insurance company views this as indication
of in-sured propensity for a claim in future.
, 28. notice of loss: notice required by the insurance company immediately after an incident. policy holder responsibility af-
ter a loss
29. depreciation: act of lowering an item due to value wear and tear it is based on age, condition, and life expectancy.
30. punitive damage: the amount awarded by the court which is intended to reform or deter the defendant from
engaging insimilar conduct in the future
31. comparative negligence: is a partial legal defense that re-duces the amount of damages that a person can recover
based upon the amount that this person's own negligence con-tributed to the loss
32. contributory negligence: is a law defense where a personnegligence contributed to the harm that he or she
sustained
33. assumption of risk: a doctrine under which a plaintiff may not recover for injuries or damage suffered from risks he or
she knows of and has voluntarilyassumed
34. adverse selection: the tendency of insured's who present a higher probability of loss to purchase or renew
insurancemore often than those who present a lower probability
35. attractive nuisance: a dangerous place, condition, or object that is particularly attractive to children.
36. accident: unforeseen, unintended event, something unex-pected
37. occurrence: an event that results in an insured loss whichresults in bodily injury or damages
38. betterment: improvement of property that puts it in a bet-ter condition than it was before the occupancy or loss
39. all risk insurance: "open perils" insurance - protecting the insured from loss arising from any peril other than those
perils specifically excluded by name
40. appraisal: is a form of dispute resolution that occurs when there is a dispute between the insured and the
insurancecompany regarding the amount of the claim or loss. both par-ties hire an appraisal and if cant decide then they
will hire anumpire
REAL TEXAS ADJUSTER EXAM STUDY GUIDE
GRADED A+. QUESTIONS AND 100%
VERIFIED ANSWERS. LATEST 2025/2026
UPDATE
perils: a cause of property losses under an insurance con- tract ex: windstorm, hurricane, explosion, collapse of buil
ing, vandalism, accidental discharge, and theft
1. law of large numbers: a fundamental concept in statisticsand probability that describes how the average of a
random-ly selected large sample from a population. it basically re- lies on the principle that the larger the pool, the more
pre-dictable the amount of losses will be in a given period
2. principle of indemnity: is an insurance principle stating that an insured may not be compensated by insurance company in
an amount exceeding the insured's economic loss.
3. limits of liability: the maximum amount that an insurance pol- icy will pay. it is specified on the policy declaration page.
4. property insurance: coverage for real and personal prop- erty against loss or damage from perils insured against.
5. loss settlement: the process used to determine the amount of the loss
6. actual cash value: the value of the property based on thecurrent cost to replace it minus depreciation.
7. agreed value: the amount that the insured and insureragree upon during the time of policy inception.
8. replacement cost: the cost associated with replacing prop-erty at current market prices
9. market value: the amount that the property is worth in acompetitive market. this amount is accepted by the
buyer andseller.
10. tort: is a wrong that involves a breach of civil duty owedto someone else. this breach determines if that
person is neg-ligence.
11. elements used to determine negligence: a duty owed, a dutybreached, proximate cause, and damages
12. methods to determine loss are:: acv, market value, replace-ment cost, agreed value
,REAL TEXAS ADJUSTER
13. casualty insurance: protects a person from financial lossarising from bodily injury or property
,REAL TEXAS ADJUSTER
damage to others
14. hazard: is a situation that poses a level of threat to life,health, property, or environment.
15. indirect loss: type of loss that does not result from di- rect damage of a covered cause of loss or peril but is insteada
consequence of the direct damage loss.
16. direct loss: direct physical loss to property
17. insuring agreement: this section of the insurance policy specifies what the insurance will provide coverage for
in ex-change for premium payments by their customer.
18. deductible: the amount the insured must pay in a loss be-fore any payment is due from the insurance
company.
19. where is a homeowner percentage deductible always takenfrom?: coverage a structure policy limits of liability
that is used on the declaration page.
20. cancellation: is the termination of an insurance policy byeither side and it must be done in writing
21. liability: a person is legally liable for an accident if thatperson is found responsible for bodily injury or
property damage to another party.
22. negligence: the failure to exercise the care that a reason- ably prudent person can be characterized by the
average per- son.
23. additional living expenses: charges covered by homeown-ers policy over and above policy holders customary living
due to damage by a covered peril and makes the home tempo-rary uninhabitable.
24. exposure: the measure of the possibility of the loss
25. insured: the party to an insurance arrangement that has aninsurable interest in the property that is being
insured.
26. insurer: insurance company
27. loss history: is the insured history of losses with other companies. insurance company views this as indication
of in-sured propensity for a claim in future.
, 28. notice of loss: notice required by the insurance company immediately after an incident. policy holder responsibility af-
ter a loss
29. depreciation: act of lowering an item due to value wear and tear it is based on age, condition, and life expectancy.
30. punitive damage: the amount awarded by the court which is intended to reform or deter the defendant from
engaging insimilar conduct in the future
31. comparative negligence: is a partial legal defense that re-duces the amount of damages that a person can recover
based upon the amount that this person's own negligence con-tributed to the loss
32. contributory negligence: is a law defense where a personnegligence contributed to the harm that he or she
sustained
33. assumption of risk: a doctrine under which a plaintiff may not recover for injuries or damage suffered from risks he or
she knows of and has voluntarilyassumed
34. adverse selection: the tendency of insured's who present a higher probability of loss to purchase or renew
insurancemore often than those who present a lower probability
35. attractive nuisance: a dangerous place, condition, or object that is particularly attractive to children.
36. accident: unforeseen, unintended event, something unex-pected
37. occurrence: an event that results in an insured loss whichresults in bodily injury or damages
38. betterment: improvement of property that puts it in a bet-ter condition than it was before the occupancy or loss
39. all risk insurance: "open perils" insurance - protecting the insured from loss arising from any peril other than those
perils specifically excluded by name
40. appraisal: is a form of dispute resolution that occurs when there is a dispute between the insured and the
insurancecompany regarding the amount of the claim or loss. both par-ties hire an appraisal and if cant decide then they
will hire anumpire
