TEXAS PERSONAL LINES | COMPREHENSIVE
INSURANCE EXAM PREP, PRACTICE
QUESTIONS, CORRECT ANSWERS AND
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
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,An insured's roof cost $4,000 when installed 5 years ago. It $5,000
has been damaged by hail and must be replaced. The new
roof will cost $6,000 at today's prices. If the roof has been
depreciating at $200 per year and his policy is ACV, how much
will it pay toward the insured's new roof?
Which of the following best expresses the purpose of a state To pre-establish the amount of coverage available for property items that are difficult to
value contract? value.
A $100,000 house insured on a policy with an 80% coinsurance $30,000
requirement has a fire that caused $40,000 of damage; the
owner has a policy with $60,000 coverage. how much can the
owner collect for his loss?
For the reported losses of an insured group to become more larger
likely to equal the statistical probability of loss for that
particular class, the insured group must become
A building is insured, but no one has lived or worked in it for 10 Vacant
years. The building is completely empty of any furniture or
personal belongings. From an insurance standpoint, the
building is considered
To purchase insurance, the policyowner must have financial Insurable interest
interest in the property being insured. This is known as
The process of determining the premium charged and how loss valuation
much insurance is required for a particular loss is called
An insured's 9-year-old son threw a ball, accidentally breaking vicarious liability
a neighbor's plate glass window. The insured was found legally
liable for the cost of replacing the window. This is an example
of
When the amount of insurance written in a property policy is stated amount
not subject to any coinsurance provision and that amount is
paid in the event of a covered loss, the coverage is said to be
written
,When a direct chain of events resulting from a negligent act the proximate cause
causes injury or damage, that act is considered to be
Payment for medical expenses, loss of wages, funeral special
expenses, or the cost to repair or replace damaged property
are known as what type of compensatory damages?
Replacement cost is defined as Full replacement of property at its current cost, new, and without reduction for
depreciation.
The reduction, decrease, or disappearance of value of the loss
person or property insured in a policy is known as what?
An insured is driving her car through a residential area when combined single
she loses control and crashes into a neighbor's front porch.
The neighbor, who was sitting on the porch, is injured. The
insured's liability policy has a limit of $500,000. This amount
applies to the total of damages for any bodily injury and
property damage resulting from one accident. Which type of
limit of liability does the insured have?
Which of the following is the basis for a claim against an loss
insurance policy?
Which of these is defined as the maximum limit of coverage aggregate limit of liability
available under a liability policy during a policy year,
regardless of the number of claims that may be made or the
number of accidents that may occur?
In property and casualty insurance, what is the term for the deductible
amount of a loss that the insured must cover out of pocket,
and the insurer will only pay for the additional amount of the
loss above the limit?
Which of the following definitions best defines the term A sudden, unplanned and unexpected event, not under the control of the insured,
"accident"? resulting in injury or damage neither expected nor intended.
, An additional loss that results from a direct loss of property is indirect loss
called a/an
An insured owns a building that is valued at $400,000. To 80% of the property's replacement cost or more
comply with the 80% coinsurance provision of his insurance
policy, how much should he insure the property for?
An insured's building has an actual cash value of $200,000, $30,000
and he has insured the property for $120,000 with an 80%
coinsurance clause. A $40,000 loss occurs. How much will the
policy pay?
Which of the following coverages in dwelling and loss of use
homeowners policies is for indirect losses?
The causes of loss insured against in an insurance policy are perils
known as
Which of the following is used in the formula for calculating replacement cost
the actual cash value of a property?
All of the following are true regarding deposit premium It is 50% of the actual premium.
EXCEPT
What type of insurance policy insures against all risks that are open peril policy
not specifically excluded in the policy?
A policy that insures all property at multiple locations for a blanket
single amount is referred to as
The legal process that gives the insurer, after payment of a subrogation
loss, the right to seek recovery from a third party that was
responsible for the loss is known as
Most insurance policies exclude losses by mysterious disappearance
Events in which a person has both the chance of winning or speculative risk
losing are classified as
INSURANCE EXAM PREP, PRACTICE
QUESTIONS, CORRECT ANSWERS AND
STUDY GUIDE
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep
,An insured's roof cost $4,000 when installed 5 years ago. It $5,000
has been damaged by hail and must be replaced. The new
roof will cost $6,000 at today's prices. If the roof has been
depreciating at $200 per year and his policy is ACV, how much
will it pay toward the insured's new roof?
Which of the following best expresses the purpose of a state To pre-establish the amount of coverage available for property items that are difficult to
value contract? value.
A $100,000 house insured on a policy with an 80% coinsurance $30,000
requirement has a fire that caused $40,000 of damage; the
owner has a policy with $60,000 coverage. how much can the
owner collect for his loss?
For the reported losses of an insured group to become more larger
likely to equal the statistical probability of loss for that
particular class, the insured group must become
A building is insured, but no one has lived or worked in it for 10 Vacant
years. The building is completely empty of any furniture or
personal belongings. From an insurance standpoint, the
building is considered
To purchase insurance, the policyowner must have financial Insurable interest
interest in the property being insured. This is known as
The process of determining the premium charged and how loss valuation
much insurance is required for a particular loss is called
An insured's 9-year-old son threw a ball, accidentally breaking vicarious liability
a neighbor's plate glass window. The insured was found legally
liable for the cost of replacing the window. This is an example
of
When the amount of insurance written in a property policy is stated amount
not subject to any coinsurance provision and that amount is
paid in the event of a covered loss, the coverage is said to be
written
,When a direct chain of events resulting from a negligent act the proximate cause
causes injury or damage, that act is considered to be
Payment for medical expenses, loss of wages, funeral special
expenses, or the cost to repair or replace damaged property
are known as what type of compensatory damages?
Replacement cost is defined as Full replacement of property at its current cost, new, and without reduction for
depreciation.
The reduction, decrease, or disappearance of value of the loss
person or property insured in a policy is known as what?
An insured is driving her car through a residential area when combined single
she loses control and crashes into a neighbor's front porch.
The neighbor, who was sitting on the porch, is injured. The
insured's liability policy has a limit of $500,000. This amount
applies to the total of damages for any bodily injury and
property damage resulting from one accident. Which type of
limit of liability does the insured have?
Which of the following is the basis for a claim against an loss
insurance policy?
Which of these is defined as the maximum limit of coverage aggregate limit of liability
available under a liability policy during a policy year,
regardless of the number of claims that may be made or the
number of accidents that may occur?
In property and casualty insurance, what is the term for the deductible
amount of a loss that the insured must cover out of pocket,
and the insurer will only pay for the additional amount of the
loss above the limit?
Which of the following definitions best defines the term A sudden, unplanned and unexpected event, not under the control of the insured,
"accident"? resulting in injury or damage neither expected nor intended.
, An additional loss that results from a direct loss of property is indirect loss
called a/an
An insured owns a building that is valued at $400,000. To 80% of the property's replacement cost or more
comply with the 80% coinsurance provision of his insurance
policy, how much should he insure the property for?
An insured's building has an actual cash value of $200,000, $30,000
and he has insured the property for $120,000 with an 80%
coinsurance clause. A $40,000 loss occurs. How much will the
policy pay?
Which of the following coverages in dwelling and loss of use
homeowners policies is for indirect losses?
The causes of loss insured against in an insurance policy are perils
known as
Which of the following is used in the formula for calculating replacement cost
the actual cash value of a property?
All of the following are true regarding deposit premium It is 50% of the actual premium.
EXCEPT
What type of insurance policy insures against all risks that are open peril policy
not specifically excluded in the policy?
A policy that insures all property at multiple locations for a blanket
single amount is referred to as
The legal process that gives the insurer, after payment of a subrogation
loss, the right to seek recovery from a third party that was
responsible for the loss is known as
Most insurance policies exclude losses by mysterious disappearance
Events in which a person has both the chance of winning or speculative risk
losing are classified as
