TEXAS PROPERTY AND CASUALTY INSURANCE EXAM WITH 100+ REAL QUESTIONS AND VERIFIED CORRECT ANSWERS ALREADY GRADED A+ |GUARANTEED SUCCESS

TEXAS PROPERTY AND CASUALTY INSURANCE
EXAM WITH 100+ REAL QUESTIONS AND VERIFIED
CORRECT ANSWERS ALREADY GRADED A+
|GUARANTEED SUCCESS



Insurance - CORRECT ANSWER ✔✔- The transfer of the possibility of a loss
(risk) from an individual or business to an insurance company, which in turn
spreads the costs of unexpected losses to many individuals


Law of Large Numbers - CORRECT ANSWER ✔✔- The larger the number of
people with a similar exposure to loss, the more predictable actual losses will be


Law of Large Numbers Example - CORRECT ANSWER ✔✔- When issuing a
policy on a 35 year old male, the insurance company has no way of knowing or
accurately predicting when he will die. Instead, they will look at a large group of
similar risks - 35 year old males of similar lifestyles/health - and make some
conclusions based on statistics of past losses to create a general idea of the
predicted time of death and set premiums accordingly


Insurable Interest - CORRECT ANSWER ✔✔- When the insured would incur a
financial or other type of benefit loss if the insured object was damaged/lost


3 Elements of Insurable Risk - CORRECT ANSWER ✔✔- 1. Financial (monetary
interest)
2. Blood (relative)
3. Business (a business partner)

,Risk - CORRECT ANSWER ✔✔- The uncertainty or chance of a loss occurring


Two Types of Risk - CORRECT ANSWER ✔✔- 1. Pure risk
2. Speculative risk


Pure Risk - CORRECT ANSWER ✔✔- Situations that can only result in a loss or
no change, there is no opportunity for financial gain


Speculative Risk - CORRECT ANSWER ✔✔- Situations that have the opportunity
for either loss or gain


Which type of risk are insurance companies willing to accept? - CORRECT
ANSWER ✔✔- Pure risk situations


Peril - CORRECT ANSWER ✔✔- The causes of loss insured against in an
insurance policy


Perils of Life Insurance - CORRECT ANSWER ✔✔- The financial loss caused by
the premature death of the insured


Perils of Health Insurance - CORRECT ANSWER ✔✔- The medical expenses
and/or loss of income caused by the insured's sickness or accidental injury


Perils of Property Insurance - CORRECT ANSWER ✔✔- The loss of physical
property or the loss of its income-producing abilities

, Perils of Casualty Insurance - CORRECT ANSWER ✔✔- The loss and/or damage
of property and resulting liabilities


Hazard - CORRECT ANSWER ✔✔- Conditions or situations that increase the
probability of an insured loss occurring


3 Classifications of Hazards - CORRECT ANSWER ✔✔- 1. Physical hazards
2. Moral hazards
3. Morale hazards


Physical Hazards - CORRECT ANSWER ✔✔- Hazards arising from the material,
structural, or operational features of the risk, apart from the persons owning or
managing it


Moral Hazards - CORRECT ANSWER ✔✔- Applicants that may lie on an
application for insurance, or in the past have submitted fraudulent claims against
an insurer


Morale Hazards - CORRECT ANSWER ✔✔- Increase in the hazard presented by
a risk, arising from the insured's indifference to loss because of the existence of
insurance


Conditions - CORRECT ANSWER ✔✔- The section of an insurance policy that
indicates the general rules that the insurer and insured agree to follow under the
terms of the policy


Loss - CORRECT ANSWER ✔✔- The reduction, decrease, or disappearance of
value of the person or property insured in a policy, caused by a named peril