USAA Licensing Exam 2026 | Complete Study Guide, Key Concepts, and Test Prep Review | Insurance & Financial Services

USAA Licensing Exam Most Recent exam COMPLETE (2026)
EXAM Questions and Answers (Verified Answers) (Latest
Update 2026) Graded A+


Insurance - CORRECT ANSWER ✔✔✔✔✔ Transfer of risk from one person or
organization to an insurance company


What is Indemnity? - CORRECT ANSWER ✔✔✔✔✔ The principle to restore
the insured to the pre-loss economic or financial condition.


Law of Large numbers - CORRECT ANSWER ✔✔✔✔✔ Mathematical principle
used by insurers to predict losses to charge the appropriate premiums


Insurable Interest - CORRECT ANSWER ✔✔✔✔✔ Proof that someone stands
to lose financially if a loss occurs; must exist at the time of the loss in property
and casualty insurance


Binder - CORRECT ANSWER ✔✔✔✔✔ Temporary insurance contract;
commits the company to act as if a policy has been issued


Peril - CORRECT ANSWER ✔✔✔✔✔ Cause of loss



Direct Loss - CORRECT ANSWER ✔✔✔✔✔ Immediate actual physical
damage to tangible property


Indirect loss - CORRECT ANSWER ✔✔✔✔✔ Inability to use property as a
result of a direct loss
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Risk - CORRECT ANSWER ✔✔✔✔✔ Chance of loss; uncertainty of loss
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,Speculative Risk - CORRECT ANSWER ✔✔✔✔✔ Involves the simultaneous
chance of gain or loss: is not insurable


Physical Hazard - CORRECT ANSWER ✔✔✔✔✔ Visible condition that
increases the chance of loss


Morale Hazard - CORRECT ANSWER ✔✔✔✔✔ Attitude of carelessness or
indifference to loss


Insurer - CORRECT ANSWER ✔✔✔✔✔ The insurance company (a.k.a. second
party to the contract)


Named Insured - CORRECT ANSWER ✔✔✔✔✔ A party named on the
declarations who is purchasing the insurance policy (a.k.a. first party to the
contract)


Insured - CORRECT ANSWER ✔✔✔✔✔ Who the insurer promises to protect
in addition to the named insured


Limit of Liability - CORRECT ANSWER ✔✔✔✔✔ The maximum amount that
can be paid for a covered loss


Consideration - CORRECT ANSWER ✔✔✔✔✔ An exchange of value between
parties to a contract


Waiver - CORRECT ANSWER ✔✔✔✔✔ The voluntary relinquishment of a
known right
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What is Estopple? - CORRECT ANSWER ✔✔✔✔✔ When an agent tells an
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insured/makes the statement there is coverage for a loss when there is no such
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,coverage, then the insurer is prevented from denying the claim as a result of what
precedent?


Concealment - CORRECT ANSWER ✔✔✔✔✔ Insured or prospect deliberately
withholding material information from the insurer, this voids coverage


Material Misrepresentation - CORRECT ANSWER ✔✔✔✔✔ Insured or
prospect giving incorrect material information to the insurer, this voids coverage


Warranty - CORRECT ANSWER ✔✔✔✔✔ A written condition in the policy that
must be true at the time of the loss


Texas Department of Insurance - CORRECT ANSWER ✔✔✔✔✔ In Texas, the
insurance industry is regulated by the


Commissioner - CORRECT ANSWER ✔✔✔✔✔ The (_______) is appointed by
the governor and heads the Texas Department of Insurance


Adjuster - CORRECT ANSWER ✔✔✔✔✔ According to the Texas Insurance
Code, any person who investigates or adjusts losses, or any person who
supervises the handling of claims must be licensed as an (_______________)


A Staff Adjuster - CORRECT ANSWER ✔✔✔✔✔ A (_____) is on the payroll of
an insurance company and is paid a salary or by the hour


Independent Adjuster - CORRECT ANSWER ✔✔✔✔✔ A (___) handles claims
for one or more insurance companies and receives a fee based on time and
expense.
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, Public Adjuster - CORRECT ANSWER ✔✔✔✔✔ A (__) works on behalf of the
insured in negotiating a claim settlement. In Texas a (______) requires another
separate license called a "public adjusters license".


Insurance Agent - CORRECT ANSWER ✔✔✔✔✔ Persons marketing (Selling)
insurance products are called (___)


Alien Insurer - CORRECT ANSWER ✔✔✔✔✔ An insurer organized and
domiciled outside the United States is called an (_____)


Domestic Insurer - CORRECT ANSWER ✔✔✔✔✔ An insurer organized,
admitted, and writing insurance in Texas is called a (______)


A Foreign Insurer - CORRECT ANSWER ✔✔✔✔✔ An insurer domiciled
outside the state where she writes business is called a (____)


Unfair Claim Settlement - CORRECT ANSWER ✔✔✔✔✔ An adjuster
intentionally lowballs the claim settlement by offering less than the amount owed
to the insured


Unfair Claim Settlement Practices Act - CORRECT ANSWER ✔✔✔✔✔ An
Agent collects a premium for a policy, but does not send it to the company and
allows a policy to be canceled


Unfair Claims Settlement Practices Act - CORRECT ANSWER ✔✔✔✔✔ The
insurance company fails to adopt reasonable standards for processing claims


Unfair Claim Settlement - CORRECT ANSWER ✔✔✔✔✔ If an adjuster were to
deny a claim without conducting a reasonable investigation. This would be an
example of what type of claim settlement violation?
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