Texas Insurance Practice Exam UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Subrogration may follow which of the following events? - CORRECT ANSWER An
insured collects from her insurance company for damages caused by a third party
Medical payments coverage under a BOP applies to expenses incurred by non-insureds for
bodily injury and reported to the insurer within: - CORRECT ANSWER One year after
the accident
Claims expenses covered under Section II - Personal Liability of the standard Homeowners
forms do NOT pay for which of the following? - CORRECT ANSWER Loss of the
insured's earnings subject to a pre-determined limit of $300 per day
Which statement best describes "defense" coverage under the Section II - Liability coverage
of the Businessowners policy? - CORRECT ANSWER Defense costs are not subject to
a limit
Under an aircraft policy what is NOT a covered territory usually covered (unless endorsed)
while the aircraft is in flight? - CORRECT ANSWER Costa Rico
Under a standard Equipment Breakdown policy, the full replacement cost will be paid on the
claim, if the equipment is repaired within what time period following the loss? - CORRECT
ANSWER 24 months
When a licensee in Texas receives an inquiry from the Insurance Department regarding their
insurance transactions, he or she must respond in writing: - CORRECT ANSWER Not
later than the 15th day after the date the inquiry is received
The sprinkler leakage coverage of a Commercial Property form does not provide coverage
for: - CORRECT ANSWER damage to growing crops from malfunctioning sprinklers
, Under the appraisal clause in a commercial inland form, which of the following is true? -
CORRECT ANSWER the insurer still retains its right to deny the claim entirely
All of the following statements are true regarding state Guaranty Associations, Except: -
CORRECT ANSWER The fund assists insurers in gaining new insurance business by
allowing them to advertise their membership in the Guaranty Association.
The Personal Inland Marine coverage form that covers clothing, cameras and other portable
property worn or carried by tourists and travelers is known as a: - CORRECT
ANSWER Personal Effects floater.
Each of the following is a feature of Business Income Coverage, EXCEPT - CORRECT
ANSWER Monetary deductibles. .
The limits of the Employers' Liability section of a standard workers' compensation policy are:
- CORRECT ANSWER Listed on the Information page..
The term "time element coverage" is used when the amount of loss depends on: - CORRECT
ANSWER The time it takes to repair, rebuild or restore damaged property.
Under a personal automobile policy with uninsured motorists coverage, a disagreement
between an insurance company and an insured on the amount of a loss can be settled by: -
CORRECT ANSWER Arbitration
Aaron purchases a Homeowners insurance policy for $700,000 with a 4% deductible. A few
months later, a heavy hailstorm destroys his roof, porch, and windows, causing $50,000 in
damages. How much should Aaron expect to receive from the insurance company to pay for
the damages? - CORRECT ANSWER $22,000
A Personal Umbrella policy will cover an insured for an "occurrence" or "offense" that occurs
- CORRECT ANSWER Anywhere in the world.
ACTUAL QUESTIONS AND CORRECT
ANSWERS
Subrogration may follow which of the following events? - CORRECT ANSWER An
insured collects from her insurance company for damages caused by a third party
Medical payments coverage under a BOP applies to expenses incurred by non-insureds for
bodily injury and reported to the insurer within: - CORRECT ANSWER One year after
the accident
Claims expenses covered under Section II - Personal Liability of the standard Homeowners
forms do NOT pay for which of the following? - CORRECT ANSWER Loss of the
insured's earnings subject to a pre-determined limit of $300 per day
Which statement best describes "defense" coverage under the Section II - Liability coverage
of the Businessowners policy? - CORRECT ANSWER Defense costs are not subject to
a limit
Under an aircraft policy what is NOT a covered territory usually covered (unless endorsed)
while the aircraft is in flight? - CORRECT ANSWER Costa Rico
Under a standard Equipment Breakdown policy, the full replacement cost will be paid on the
claim, if the equipment is repaired within what time period following the loss? - CORRECT
ANSWER 24 months
When a licensee in Texas receives an inquiry from the Insurance Department regarding their
insurance transactions, he or she must respond in writing: - CORRECT ANSWER Not
later than the 15th day after the date the inquiry is received
The sprinkler leakage coverage of a Commercial Property form does not provide coverage
for: - CORRECT ANSWER damage to growing crops from malfunctioning sprinklers
, Under the appraisal clause in a commercial inland form, which of the following is true? -
CORRECT ANSWER the insurer still retains its right to deny the claim entirely
All of the following statements are true regarding state Guaranty Associations, Except: -
CORRECT ANSWER The fund assists insurers in gaining new insurance business by
allowing them to advertise their membership in the Guaranty Association.
The Personal Inland Marine coverage form that covers clothing, cameras and other portable
property worn or carried by tourists and travelers is known as a: - CORRECT
ANSWER Personal Effects floater.
Each of the following is a feature of Business Income Coverage, EXCEPT - CORRECT
ANSWER Monetary deductibles. .
The limits of the Employers' Liability section of a standard workers' compensation policy are:
- CORRECT ANSWER Listed on the Information page..
The term "time element coverage" is used when the amount of loss depends on: - CORRECT
ANSWER The time it takes to repair, rebuild or restore damaged property.
Under a personal automobile policy with uninsured motorists coverage, a disagreement
between an insurance company and an insured on the amount of a loss can be settled by: -
CORRECT ANSWER Arbitration
Aaron purchases a Homeowners insurance policy for $700,000 with a 4% deductible. A few
months later, a heavy hailstorm destroys his roof, porch, and windows, causing $50,000 in
damages. How much should Aaron expect to receive from the insurance company to pay for
the damages? - CORRECT ANSWER $22,000
A Personal Umbrella policy will cover an insured for an "occurrence" or "offense" that occurs
- CORRECT ANSWER Anywhere in the world.
