Texas Insurance Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

Texas Insurance Exam Questions and Answers | Latest Version | 2025/2026 | Correct & Verified Which agency enforces insurance laws in Texas? A. Texas Supreme Court B. Texas Department of Insurance C. Texas Legislature D. Federal Reserve What is risk in insurance terms? A. Uncertainty of loss B. Guaranteed damage C. Intentional harm D. Policy ownership Which contract feature means only one party makes the promise? A. Conditional B. Unilateral C. Aleatory D. Personal What makes an insurance contract aleatory? 2 A. Equal exchange of values B. Unequal exchange depending on loss C. Written agreement D. Conditional terms Who receives policy proceeds in a life policy? A. Insured B. Beneficiary C. Agent D. Underwriter What must exist for insurance to be valid? A. Insurable interest B. Deductible C. Endorsement D. Rider When must insurable interest exist for property insurance? A. At application B. At claim payment C. At time of loss D. At renewal 3 What is the policyowner’s consideration? A. Claims payment B. Premium payment C. Policy delivery D. Risk assumption Which principle prevents an insured from profiting from loss? A. Subrogation B. Indemnity C. Adhesion D. Contribution What does subrogation allow an insurer to do? A. Recover losses from a third party B. Cancel coverage C. Increase premiums D. Modify the policy Which section of the policy states what is covered? A. Conditions B. Insuring agreement C. Exclusions D. Endorsements 4 What does a deductible do? A. Increases premiums B. Limits coverage C. Shares loss with insured D. Cancels coverage Which policy form is most favorable to the insured? A. Adhesion B. Aleatory C. Unilateral D. Conditional What is a binder? A. Claim document B. Temporary coverage proof C. Policy amendment D. Renewal notice Who must hold a Texas insurance license? A. Policyholder B. Beneficiary C. Agent 5 D. Insured What is rebating? A. Offering illegal inducements B. Paying claims early C. Returning premium D. Reducing coverage What is twisting? A. Adjusting claims unfairly