Texas Property and Casualty Practice Exam Questions With Verified Answers

Coverage for water backup or sump pump overflow is excluded from the Dwelling Policy. However, with the purchase of the water backup and sump pump overflow endorsement, coverage for up to $5,000 in loss or damage can be provided for an additional premium. What is the deductible associated with this coverage? - Answer $250 Coverage for up to $5,000 in loss or damage, subject to a $250 deductible, can be provided for an additional premium with this endorsement. An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some furniture and clothes in the house. From an insurance standpoint, the insured's house is considered - Answer Unoccupied Unoccupancy refers to an insured structure in which no people have been living or working within the required period of time, but the structure contains contents. Individuals in the business of selling construction equipment and mobile equipment should insure with a/an - Answer Equipment dealers coverage form An equipment dealer's coverage form covers a dealer's stock in trade consisting primarily of mobile agricultural equipment and construction equipment. It also covers property of others in the dealer's care, custody, or control. It excludes coverage for autos, motorcycles, aircraft, and watercraft. All of the following are true regarding deposit premium - Answer It must be paid in advance. It is an estimated premium paid at the policy issue. It could be adjusted by the audit. Deposit premium is an estimated premium paid in advance at the time the policy is issued that may be adjusted by the audit based on actual exposures. Which of the following is NOT an essential element of an insurance contract? - Answer counteroffer To purchase insurance, the policyowner must have financial interest in the property being insured. This is known as - Answer Insurable Interest The insured must have an insurable interest in the person or property covered by an insurance policy. In property insurance, this means the insured would incur a financial loss if the insured property was damaged. What type of property does a Personal Floaters policy cover? - Answer Movable personal property, wherever it may be located Events or conditions that increase the chances of an insured loss occurring are referred to as - Answer Hazards Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions? - Answer An employee of a medical facility who suffers from a common cold When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be - Answer The proximate case The causes of loss insured against in an insurance policy are known as - Answer Perils