Texas Insurance License Exam
Prep P&C Questions and Answers
100% PASS
What are 3 subjects an auto policy covers? - CORRECT ANSWER-1. Body
2. The vehicle
3. Assets
Bodily Injury Types - CORRECT ANSWER-Personal Injury
Med Pay
Uninsured Motorist
No Fault Insurance - CORRECT ANSWER-State stipulates that parties cannot file
a claim to the other persons insurance policy unless required in excess. Instead,
each party is required to file a primary claim against their own insurance regardless
who is at fault. EX. Florida
Financial Responsibility Laws - CORRECT ANSWER-State Laws regulating that
people are to carry a minimum coverage amount set by the state to protect
themselves, others, and property.
P.A.P - CORRECT ANSWER-Personal Automotive Policy
,Negligence - CORRECT ANSWER-The failure to act as a prudent person would
under similar circumstances
Legal Liability - CORRECT ANSWER-Involves proven negligence or fault
Vicarious Liability - CORRECT ANSWER-Being responsible for the negligent
acts of someone else. Ex. Your children
Absolute or Strict Liability - CORRECT ANSWER-Stems from hazardous or
dangerous activities that makes the owner liable WITHOUT the requirement of
proof of negligence.
Liability - CORRECT ANSWER-Being responsible for the damages or injury you
or someone else you're responsible for has done.
The 7 Characteristics of a Contract - CORRECT ANSWER-1. Personal Contract
2. Conditional Contract
3. Adhesion
4. Indemnity
5. Aleatory
6. Unilateral
7. Utmost Good Faith
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,Personal Contract - CORRECT ANSWER-Is stipulation of a contract that says the
contract is for the name person and cannot be transferred to another.
Conditional Contract - CORRECT ANSWER-Stipulates set by a contract. "You
can do this, but...."
Adhesion - CORRECT ANSWER-A stipulation that the contract and it's language
is binding, or "sticks" and the parties agreeing cannot back out so long as the
conditions are met.
Indemnity - CORRECT ANSWER-The contract agrees to indemnify, or make
whole again the customer. Makes them no better, nor worse, just whole.
Aleatory - CORRECT ANSWER-The stipulation that the contract must include
and unequal transfer of money. Ex. The insured signed a contract a month ago and
has paid a single payment of $300. The company has only received $300, but it on
the hook to pay out $30,000 in the event of a loss.
Unilateral - CORRECT ANSWER-Stipulation that the contract is one-sided. Ex.
The customer doesn't HAVE to pay the insurance company, but IF they do, then
the insurance company HAS to pay out.
Utmost Good Faith - CORRECT ANSWER-Parties believe that both will deal
with eachother honestly and fairly, without misleading or withholding
, Insurance - CORRECT ANSWER-A contract by which an Insurance company
agrees to compensate an insured for a covered loss in return for a premium
payment.
Underwriting - CORRECT ANSWER-Process of evaluating policyholders to
determine eligibility for coverage and pricing
Law of Large #'s - CORRECT ANSWER-Principle that the larger the examples of
data, the more accurate the information
Speculative Risk - CORRECT ANSWER-Risk of Gain OR Loss Ex. Gambling or
Investment Insurance
Pure Risk - CORRECT ANSWER-No chance of gain or benefit. The only kind
that insurance deals with.
Exposure - CORRECT ANSWER-An opportunity for risk or loss
Risk - CORRECT ANSWER-Possibility of financial loss
Peril - CORRECT ANSWER-The direct cause of a loss
Representation - CORRECT ANSWER-Statements on an insurance contract that
the insured BELIEVES to be true
4 Means of Managing Risk - CORRECT ANSWER-1.Reduction
2.Retain
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
Prep P&C Questions and Answers
100% PASS
What are 3 subjects an auto policy covers? - CORRECT ANSWER-1. Body
2. The vehicle
3. Assets
Bodily Injury Types - CORRECT ANSWER-Personal Injury
Med Pay
Uninsured Motorist
No Fault Insurance - CORRECT ANSWER-State stipulates that parties cannot file
a claim to the other persons insurance policy unless required in excess. Instead,
each party is required to file a primary claim against their own insurance regardless
who is at fault. EX. Florida
Financial Responsibility Laws - CORRECT ANSWER-State Laws regulating that
people are to carry a minimum coverage amount set by the state to protect
themselves, others, and property.
P.A.P - CORRECT ANSWER-Personal Automotive Policy
,Negligence - CORRECT ANSWER-The failure to act as a prudent person would
under similar circumstances
Legal Liability - CORRECT ANSWER-Involves proven negligence or fault
Vicarious Liability - CORRECT ANSWER-Being responsible for the negligent
acts of someone else. Ex. Your children
Absolute or Strict Liability - CORRECT ANSWER-Stems from hazardous or
dangerous activities that makes the owner liable WITHOUT the requirement of
proof of negligence.
Liability - CORRECT ANSWER-Being responsible for the damages or injury you
or someone else you're responsible for has done.
The 7 Characteristics of a Contract - CORRECT ANSWER-1. Personal Contract
2. Conditional Contract
3. Adhesion
4. Indemnity
5. Aleatory
6. Unilateral
7. Utmost Good Faith
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
,Personal Contract - CORRECT ANSWER-Is stipulation of a contract that says the
contract is for the name person and cannot be transferred to another.
Conditional Contract - CORRECT ANSWER-Stipulates set by a contract. "You
can do this, but...."
Adhesion - CORRECT ANSWER-A stipulation that the contract and it's language
is binding, or "sticks" and the parties agreeing cannot back out so long as the
conditions are met.
Indemnity - CORRECT ANSWER-The contract agrees to indemnify, or make
whole again the customer. Makes them no better, nor worse, just whole.
Aleatory - CORRECT ANSWER-The stipulation that the contract must include
and unequal transfer of money. Ex. The insured signed a contract a month ago and
has paid a single payment of $300. The company has only received $300, but it on
the hook to pay out $30,000 in the event of a loss.
Unilateral - CORRECT ANSWER-Stipulation that the contract is one-sided. Ex.
The customer doesn't HAVE to pay the insurance company, but IF they do, then
the insurance company HAS to pay out.
Utmost Good Faith - CORRECT ANSWER-Parties believe that both will deal
with eachother honestly and fairly, without misleading or withholding
, Insurance - CORRECT ANSWER-A contract by which an Insurance company
agrees to compensate an insured for a covered loss in return for a premium
payment.
Underwriting - CORRECT ANSWER-Process of evaluating policyholders to
determine eligibility for coverage and pricing
Law of Large #'s - CORRECT ANSWER-Principle that the larger the examples of
data, the more accurate the information
Speculative Risk - CORRECT ANSWER-Risk of Gain OR Loss Ex. Gambling or
Investment Insurance
Pure Risk - CORRECT ANSWER-No chance of gain or benefit. The only kind
that insurance deals with.
Exposure - CORRECT ANSWER-An opportunity for risk or loss
Risk - CORRECT ANSWER-Possibility of financial loss
Peril - CORRECT ANSWER-The direct cause of a loss
Representation - CORRECT ANSWER-Statements on an insurance contract that
the insured BELIEVES to be true
4 Means of Managing Risk - CORRECT ANSWER-1.Reduction
2.Retain
COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED
