Texas General Lines Property & Casualty
Insurance Exam Questions and Correct
Answers
Question 1
Under a personal auto policy, the medical payments coverage applies to expenses
incurred within
Correct Answer
3 years from the accident date
Question 2
The name of a liability insurance policy which generally provides high limits of
coverage and may fill a number of insurance gaps is
Correct Answer
An umbrella policy
Question 3
The authority of an insurance agent, which is specified in the oral or written
agreements between the agent and the insurer is
Correct Answer
Express authority
Page 1 of 101
,Question 4
Eliminates the risk entirely by disposing of an existing exposure or not assuming a
new one
Correct Answer
Avoidance
Question 1: Under Texas insurance regulations administered by the Texas
Department of Insurance, what is the maximum time period a property and
casualty insurer may take to acknowledge receipt of a claim from an insured
after receiving notice of the claim, absent special circumstances that justify a
longer period?
A. 5 business days
B. 15 calendar days
C. 30 calendar days
D. 45 calendar days
CORRECT ANSWER: B. 15 calendar days
Rationale: Texas Administrative Code and Insurance Code provisions require insurers
to acknowledge claims promptly. For property and casualty claims, the standard
acknowledgment period is 15 calendar days after receipt of notice, unless a longer
period is specifically authorized or circumstances reasonably prevent compliance.
Question 2: In a standard Texas homeowners policy, which of the following
perils is typically covered under the broad form (HO-2) but excluded or limited
under the basic form (HO-1) unless specifically endorsed?
A. Fire and lightning
B. Windstorm or hail
C. Falling objects
D. Explosion
CORRECT ANSWER: C. Falling objects
Rationale: The HO-1 basic form covers a limited list of named perils. Falling objects
is generally added under the broader HO-2 form. Fire, lightning, windstorm/hail,
and explosion are common to both basic and broad forms in Texas homeowners
policies.
Question 3: According to Texas motor vehicle insurance requirements, what is
the minimum bodily injury liability coverage limit per person that must be
carried by a private passenger automobile insured under a standard personal
auto policy?
Page 2 of 101
,A. $10,000
B. $25,000
C. $30,000
D. $50,000
CORRECT ANSWER: C. $30,000
Rationale: Texas law mandates minimum liability limits of 30/60/25 ($30,000 per
person bodily injury, $60,000 per accident bodily injury, and $25,000 property
damage). These are the statutory financial responsibility limits for private passenger
vehicles.
Question 4: When an insurer in Texas non-renews a personal auto policy, how
many days’ advance written notice must the insurer generally provide to the
named insured before the non-renewal becomes effective?
A. 10 days
B. 20 days
C. 30 days
D. 45 days
CORRECT ANSWER: C. 30 days
Rationale: Under Texas Insurance Code provisions governing personal automobile
insurance, an insurer must provide at least 30 days’ advance written notice of non-
renewal to the named insured, allowing the insured adequate time to obtain
replacement coverage.
Question 5: In commercial general liability insurance commonly written in
Texas, which of the following is generally considered an “occurrence” rather
than a “claims-made” trigger?
A. A claim is first made against the insured during the policy period
B. Bodily injury or property damage takes place during the policy period, regardless
of when the claim is reported
C. The insured reports a potential claim during the policy period
D. A lawsuit is filed against the insured after policy expiration
CORRECT ANSWER: B. Bodily injury or property damage takes place during
the policy period, regardless of when the claim is reported
Rationale: An occurrence-form CGL policy covers bodily injury and property damage
that occurs during the policy period, even if the claim is made later. Claims-made
forms, by contrast, require the claim to be first made during the policy period or an
extended reporting period.
Page 3 of 101
, Question 6: Under Texas property insurance rules, if an insurer intends to
cancel a homeowners policy for a reason other than non-payment of premium,
how many days’ notice must typically be given to the insured?
A. 10 days
B. 20 days
C. 30 days
D. 60 days
CORRECT ANSWER: C. 30 days
Rationale: Texas regulations generally require 30 days’ advance written notice for
cancellation of a homeowners policy when the cancellation is for reasons other than
non-payment of premium. Non-payment usually requires a shorter notice period.
Question 7: Which of the following coverages is commonly provided under
Part D of a standard Texas personal auto policy?
A. Liability coverage for bodily injury
B. Medical payments coverage
C. Coverage for damage to the insured’s own automobile (comprehensive and
collision)
D. Uninsured motorists coverage
CORRECT ANSWER: C. Coverage for damage to the insured’s own automobile
(comprehensive and collision)
Rationale: Part D of the personal auto policy addresses coverage for damage to the
insured’s auto, including collision and other-than-collision (comprehensive)
coverages. Liability is Part A, medical payments Part B, and uninsured motorists Part
C.
Question 8: In Texas, the Texas Windstorm Insurance Association (TWIA)
provides residual market coverage primarily for which type of risk?
A. Standard commercial general liability exposures in urban areas
B. Windstorm and hail risks in designated coastal catastrophe areas where the
voluntary market is inadequate
C. Workers’ compensation for agricultural employers
D. Personal auto liability for high-risk drivers statewide
CORRECT ANSWER: B. Windstorm and hail risks in designated coastal
catastrophe areas where the voluntary market is inadequate
Rationale: TWIA operates as a residual market mechanism to provide windstorm
and hail insurance in the Texas seacoast territory when private insurers are unwilling
or unable to provide adequate coverage.
Page 4 of 101
Insurance Exam Questions and Correct
Answers
Question 1
Under a personal auto policy, the medical payments coverage applies to expenses
incurred within
Correct Answer
3 years from the accident date
Question 2
The name of a liability insurance policy which generally provides high limits of
coverage and may fill a number of insurance gaps is
Correct Answer
An umbrella policy
Question 3
The authority of an insurance agent, which is specified in the oral or written
agreements between the agent and the insurer is
Correct Answer
Express authority
Page 1 of 101
,Question 4
Eliminates the risk entirely by disposing of an existing exposure or not assuming a
new one
Correct Answer
Avoidance
Question 1: Under Texas insurance regulations administered by the Texas
Department of Insurance, what is the maximum time period a property and
casualty insurer may take to acknowledge receipt of a claim from an insured
after receiving notice of the claim, absent special circumstances that justify a
longer period?
A. 5 business days
B. 15 calendar days
C. 30 calendar days
D. 45 calendar days
CORRECT ANSWER: B. 15 calendar days
Rationale: Texas Administrative Code and Insurance Code provisions require insurers
to acknowledge claims promptly. For property and casualty claims, the standard
acknowledgment period is 15 calendar days after receipt of notice, unless a longer
period is specifically authorized or circumstances reasonably prevent compliance.
Question 2: In a standard Texas homeowners policy, which of the following
perils is typically covered under the broad form (HO-2) but excluded or limited
under the basic form (HO-1) unless specifically endorsed?
A. Fire and lightning
B. Windstorm or hail
C. Falling objects
D. Explosion
CORRECT ANSWER: C. Falling objects
Rationale: The HO-1 basic form covers a limited list of named perils. Falling objects
is generally added under the broader HO-2 form. Fire, lightning, windstorm/hail,
and explosion are common to both basic and broad forms in Texas homeowners
policies.
Question 3: According to Texas motor vehicle insurance requirements, what is
the minimum bodily injury liability coverage limit per person that must be
carried by a private passenger automobile insured under a standard personal
auto policy?
Page 2 of 101
,A. $10,000
B. $25,000
C. $30,000
D. $50,000
CORRECT ANSWER: C. $30,000
Rationale: Texas law mandates minimum liability limits of 30/60/25 ($30,000 per
person bodily injury, $60,000 per accident bodily injury, and $25,000 property
damage). These are the statutory financial responsibility limits for private passenger
vehicles.
Question 4: When an insurer in Texas non-renews a personal auto policy, how
many days’ advance written notice must the insurer generally provide to the
named insured before the non-renewal becomes effective?
A. 10 days
B. 20 days
C. 30 days
D. 45 days
CORRECT ANSWER: C. 30 days
Rationale: Under Texas Insurance Code provisions governing personal automobile
insurance, an insurer must provide at least 30 days’ advance written notice of non-
renewal to the named insured, allowing the insured adequate time to obtain
replacement coverage.
Question 5: In commercial general liability insurance commonly written in
Texas, which of the following is generally considered an “occurrence” rather
than a “claims-made” trigger?
A. A claim is first made against the insured during the policy period
B. Bodily injury or property damage takes place during the policy period, regardless
of when the claim is reported
C. The insured reports a potential claim during the policy period
D. A lawsuit is filed against the insured after policy expiration
CORRECT ANSWER: B. Bodily injury or property damage takes place during
the policy period, regardless of when the claim is reported
Rationale: An occurrence-form CGL policy covers bodily injury and property damage
that occurs during the policy period, even if the claim is made later. Claims-made
forms, by contrast, require the claim to be first made during the policy period or an
extended reporting period.
Page 3 of 101
, Question 6: Under Texas property insurance rules, if an insurer intends to
cancel a homeowners policy for a reason other than non-payment of premium,
how many days’ notice must typically be given to the insured?
A. 10 days
B. 20 days
C. 30 days
D. 60 days
CORRECT ANSWER: C. 30 days
Rationale: Texas regulations generally require 30 days’ advance written notice for
cancellation of a homeowners policy when the cancellation is for reasons other than
non-payment of premium. Non-payment usually requires a shorter notice period.
Question 7: Which of the following coverages is commonly provided under
Part D of a standard Texas personal auto policy?
A. Liability coverage for bodily injury
B. Medical payments coverage
C. Coverage for damage to the insured’s own automobile (comprehensive and
collision)
D. Uninsured motorists coverage
CORRECT ANSWER: C. Coverage for damage to the insured’s own automobile
(comprehensive and collision)
Rationale: Part D of the personal auto policy addresses coverage for damage to the
insured’s auto, including collision and other-than-collision (comprehensive)
coverages. Liability is Part A, medical payments Part B, and uninsured motorists Part
C.
Question 8: In Texas, the Texas Windstorm Insurance Association (TWIA)
provides residual market coverage primarily for which type of risk?
A. Standard commercial general liability exposures in urban areas
B. Windstorm and hail risks in designated coastal catastrophe areas where the
voluntary market is inadequate
C. Workers’ compensation for agricultural employers
D. Personal auto liability for high-risk drivers statewide
CORRECT ANSWER: B. Windstorm and hail risks in designated coastal
catastrophe areas where the voluntary market is inadequate
Rationale: TWIA operates as a residual market mechanism to provide windstorm
and hail insurance in the Texas seacoast territory when private insurers are unwilling
or unable to provide adequate coverage.
Page 4 of 101
