Texas Property & Casualty License
1. What is "Other Insurance"?: This provision applies when the insured has morethan one
policy covering the same loss
2. Primary & Excess: Primary pays to limitExcess pays what is left
3. Pro Rata: Primary pays their percentage of lossOther insurance pays their percentage of
loss
4. What does vacant mean?: Empty building. No people/No contents for 60 days.
5. What does unoccupied mean?: No people present when loss occurs butcontents still
remain.
6. Abandonment: insured cannot abandon partially damaged property and expectto be paid for
its full value
7. What is salvage value?: after paying the insured for a loss as if it was totallydestroyed the
insured must give the insured what's left.
8. What is the most common casualty coverage?: Liability (3rd party)
9. What is the definition of liability?: Individual or organizations maybe heldresponsible for
action resulting in bodily injury or property damage to others.
10. What are the two types of liability?: Criminal & Civil
11. What is a tort?: A civil wrong
12. Direct Liability: Insured is the wrongdoer (Tortfeasor)
13. Vicarious Liability: Insured is responsible for the actions of the wrongdoer
14. Contractual Liability: Insured assumes another's liability under a written agree-ment
15. Absolute Liability: Liability without fault (Child drowns in pool)
16. Strict Liability: Product defect claims
17. Negligence: Failure to do or not to do something that ordinarily should be or notbe done
that results in a loss
18. Legal Duty: Owe an obligation to act or not act
19. Breach of Duty: Failure to comply with a duty
20. Actual Loss: Another suffers a loss
21. Proximate Cause (Regarding Duties): Breach of duty is the direct cause ofloss
22. Bodily Injury: Injuries including pain and suffering
23. Property Damage: Damages including loss of use
24. Personal Injury: Damage to a persons character or reputation
, 25. What is an accident?: an event that is sudden and unexpected
26. What is occurrence?: an event that happens over time
27. Compensatory Damage: To indemnify the injured party
28. Punitive Damages: To punish the wrongdoer due to gross negligence
29. Domestic: Same state
30. Foreign: Another state
31. Alien: Another country
32. Stock Insurers: Owned by stockholders/shareholdersFor profit company
33. Mutual Insurers: Owned by policyholders
Incorporated/Managed by board of directors chosen by policy holders
34. Self-Insurance: Business organizations that set up their own savings accountsto pay for
their own claims, property damage, or liability.
35. Property vs Casualty: What is considered property?: Structure & PersonalProperty
36. Property vs Casualty: What is considered casualty?: Non-property losses.Legal liability
to others. 3rd Party
37. Risk: uncertainty of financial loss
38. Pure Risk: Chance of Loss
39. Speculative Risk: Chance of Loss or Gain (Gamble)
40. Insurance (covers which type of risk?): Pure Risk Only
41. How does the law of large numbers apply in insurance?: Actuaries use thelaw of large
numbers to estimate claims
42. What is the law of large numbers?: as the number of a similar loss exposureincreases, the
more accurate claims can be predicted from the group.
43. What is a peril?: cause of loss
44. What is a hazard?: things that increase the chance of a peril happening
45. Three types of hazards: Physical: visible characteristic (dead tree)Moral: Dishonest
tendencies
Morale: Attitude of carelessness
46. Proximate Cause: First cause in an unbroken chain of events
47. Elements of a legal contract (CALC): C - Competent parties (18/Right frameof mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)C - Consideration (It has to be fair)
1. What is "Other Insurance"?: This provision applies when the insured has morethan one
policy covering the same loss
2. Primary & Excess: Primary pays to limitExcess pays what is left
3. Pro Rata: Primary pays their percentage of lossOther insurance pays their percentage of
loss
4. What does vacant mean?: Empty building. No people/No contents for 60 days.
5. What does unoccupied mean?: No people present when loss occurs butcontents still
remain.
6. Abandonment: insured cannot abandon partially damaged property and expectto be paid for
its full value
7. What is salvage value?: after paying the insured for a loss as if it was totallydestroyed the
insured must give the insured what's left.
8. What is the most common casualty coverage?: Liability (3rd party)
9. What is the definition of liability?: Individual or organizations maybe heldresponsible for
action resulting in bodily injury or property damage to others.
10. What are the two types of liability?: Criminal & Civil
11. What is a tort?: A civil wrong
12. Direct Liability: Insured is the wrongdoer (Tortfeasor)
13. Vicarious Liability: Insured is responsible for the actions of the wrongdoer
14. Contractual Liability: Insured assumes another's liability under a written agree-ment
15. Absolute Liability: Liability without fault (Child drowns in pool)
16. Strict Liability: Product defect claims
17. Negligence: Failure to do or not to do something that ordinarily should be or notbe done
that results in a loss
18. Legal Duty: Owe an obligation to act or not act
19. Breach of Duty: Failure to comply with a duty
20. Actual Loss: Another suffers a loss
21. Proximate Cause (Regarding Duties): Breach of duty is the direct cause ofloss
22. Bodily Injury: Injuries including pain and suffering
23. Property Damage: Damages including loss of use
24. Personal Injury: Damage to a persons character or reputation
, 25. What is an accident?: an event that is sudden and unexpected
26. What is occurrence?: an event that happens over time
27. Compensatory Damage: To indemnify the injured party
28. Punitive Damages: To punish the wrongdoer due to gross negligence
29. Domestic: Same state
30. Foreign: Another state
31. Alien: Another country
32. Stock Insurers: Owned by stockholders/shareholdersFor profit company
33. Mutual Insurers: Owned by policyholders
Incorporated/Managed by board of directors chosen by policy holders
34. Self-Insurance: Business organizations that set up their own savings accountsto pay for
their own claims, property damage, or liability.
35. Property vs Casualty: What is considered property?: Structure & PersonalProperty
36. Property vs Casualty: What is considered casualty?: Non-property losses.Legal liability
to others. 3rd Party
37. Risk: uncertainty of financial loss
38. Pure Risk: Chance of Loss
39. Speculative Risk: Chance of Loss or Gain (Gamble)
40. Insurance (covers which type of risk?): Pure Risk Only
41. How does the law of large numbers apply in insurance?: Actuaries use thelaw of large
numbers to estimate claims
42. What is the law of large numbers?: as the number of a similar loss exposureincreases, the
more accurate claims can be predicted from the group.
43. What is a peril?: cause of loss
44. What is a hazard?: things that increase the chance of a peril happening
45. Three types of hazards: Physical: visible characteristic (dead tree)Moral: Dishonest
tendencies
Morale: Attitude of carelessness
46. Proximate Cause: First cause in an unbroken chain of events
47. Elements of a legal contract (CALC): C - Competent parties (18/Right frameof mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)C - Consideration (It has to be fair)
