TEXAS GENERAL LINES PROPERTY AND
CASUALTY INSURANCE EXAMINATION TEST
2026 QUESTIONS WITH ANSWERS GRADED
A+
◍ Pure risk - chance of loss ONLY
◍ Speculative risk - chance of loss or gain (INSURANCE COVERS
PURE RISK ONLY)
◍ Open Peril - all risk covers all perils except those specifically
excluded
◍ Hazard - not causes of loss but are things that increase the chance of
peril happening
◍ Moral - dishonest tendencies; tendencies towards increased risk,
dishonest predisposition
◍ Morale - the attitude of carelessness; state of mind that causes
indifference toward loss, careless attitude (wet floor&still walking)
,◍ indemnity=reimbursement - key principle in all insurance contracts,
insureds can only collect to the extent of their financial loss&cannot gain
financially after a loss
◍ elements of insurable risk - due to chance, definite and measurable,
statistically predictable, not catastrophic, randomly selected and large
loss exposure
◍ Law of large numbers - the larger the number of people with similar
exposure to loss, the more predictable actual losses will be
◍ Casualty - the loss of and/or damage to property and resulting
liabilities
◍ Loss - reduction of value, basis for a claim, destruction, or
disappearance of property or person insured in a policy or the reduction
or destruction must be due to a peril insured against
◍ Insurable interest - for an insurance policy to pay there must be an
insurable interest-financial risk of loss
-exist at the time of loss for property and casualty losses
◍ Proximate cause - first cause in an unbroken chain of events
, ◍ Elements of a legal contract - Competent Parties: 18+sane+sober
Agreement: composed of the offer(insured completes the application)
and acceptance (insurers issues policy)
Legal Purpose: transfer of risk is legal
Consideration: exchange of values (insured gives premium and
information, the insurer gives a promise to pay in the future)
◍ Misrepresentation - information that is not true. Has no effect on the
insurers decision to issue the policy.
◍ Material misrepresentation - -Information that is not true but would
have caused the insurer not to issue the policy
-usually is concealed (intentionally hidden) by the insured. May void the
policy
◍ Fraud - an all out effort by one party to deceive and cheat the other
◍ Warranty - written into the policy, guarantees the insured will do or
not do something, usually only bound in commercial policies, breach of
warranty may void the policy
◍ Binder - temporary contract of insurancee pending issue of the policy,
usually issued by agent, may be written or verbal, good for 30 days in
CASUALTY INSURANCE EXAMINATION TEST
2026 QUESTIONS WITH ANSWERS GRADED
A+
◍ Pure risk - chance of loss ONLY
◍ Speculative risk - chance of loss or gain (INSURANCE COVERS
PURE RISK ONLY)
◍ Open Peril - all risk covers all perils except those specifically
excluded
◍ Hazard - not causes of loss but are things that increase the chance of
peril happening
◍ Moral - dishonest tendencies; tendencies towards increased risk,
dishonest predisposition
◍ Morale - the attitude of carelessness; state of mind that causes
indifference toward loss, careless attitude (wet floor&still walking)
,◍ indemnity=reimbursement - key principle in all insurance contracts,
insureds can only collect to the extent of their financial loss&cannot gain
financially after a loss
◍ elements of insurable risk - due to chance, definite and measurable,
statistically predictable, not catastrophic, randomly selected and large
loss exposure
◍ Law of large numbers - the larger the number of people with similar
exposure to loss, the more predictable actual losses will be
◍ Casualty - the loss of and/or damage to property and resulting
liabilities
◍ Loss - reduction of value, basis for a claim, destruction, or
disappearance of property or person insured in a policy or the reduction
or destruction must be due to a peril insured against
◍ Insurable interest - for an insurance policy to pay there must be an
insurable interest-financial risk of loss
-exist at the time of loss for property and casualty losses
◍ Proximate cause - first cause in an unbroken chain of events
, ◍ Elements of a legal contract - Competent Parties: 18+sane+sober
Agreement: composed of the offer(insured completes the application)
and acceptance (insurers issues policy)
Legal Purpose: transfer of risk is legal
Consideration: exchange of values (insured gives premium and
information, the insurer gives a promise to pay in the future)
◍ Misrepresentation - information that is not true. Has no effect on the
insurers decision to issue the policy.
◍ Material misrepresentation - -Information that is not true but would
have caused the insurer not to issue the policy
-usually is concealed (intentionally hidden) by the insured. May void the
policy
◍ Fraud - an all out effort by one party to deceive and cheat the other
◍ Warranty - written into the policy, guarantees the insured will do or
not do something, usually only bound in commercial policies, breach of
warranty may void the policy
◍ Binder - temporary contract of insurancee pending issue of the policy,
usually issued by agent, may be written or verbal, good for 30 days in
