Texas Property & Casualty 2024 License Test || Questions & Solutions (Rated A+)

Texas Property & Casualty 2024 License Test || Questions & Solutions (Rated A+) Texas Property & Casualty 2024 License Test || Questions & Solutions (Rated A+) Property vs Casualty: What is considered property? - ANSWER - Structure & Personal Property Property vs Casualty: What is considered casualty? - ANSWER - Non-property losses. Legal liability to others. 3rd Party. Casualty insurance means that the policy includes liability (accountability or responsibility) coverages to help protect you if you're found legally responsible for an accident that causes injuries to another person or damage another persons belongings. Property and casualty are typically bundled together into one insurance. Liability means something you owe Risk - ANSWER - uncertainty (unpredictable/ unknown) of financial loss or chance of loss Pure Risk - ANSWER - Chance of Loss - no possibility of gain Broker - ANSWER - Represents the client not the insurance company. Insured - ANSWER - The policyholder. Insurer - ANSWER - The insurance company. Agent - ANSWER - Legal representative of the company. Sharing risk method - ANSWER - Insurance uses the sharing risk method that is spreading the risk. They help cover the risk in exchange of premium payments to earn profit. Speculative Risk - ANSWER - Chance of Loss or possibility Gain (Gamble) Insurance (covers which type of risk?) - ANSWER - Pure Risk Only How does the law of large numbers apply in insurance? - ANSWER - Actuaries use the law of large numbers to estimate claims Risk Management Techniques - ANSWER - 1. Risk Avoidance: staying away from risky activities 2. Risk Reduction: taking measures to reduce risk 3. Risk Retention: build up a fund 4. Risk Shifting: getting someone to accept the risk. 5. Buying insurance: obvious ways to manage risk is to buy insurance. What is the law of large numbers? - ANSWER - as the number of a similar loss exposure increases, the more accurate claims can be predicted from the group. *Large numbers : losses become more predictable as the # of insureds increase. What is the purpose of insurance? - ANSWER - to idemnify by making the insured whole, not have them come out ahead. What is an insurance? - ANSWER - A contract, transfer of risk and social device. client agrees to incur a small immediate loss in exchange for protection against the potential of a large future loss.