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TEXAS PROPERTY AND CASUALTY
INSURANCE STUDY GUIDE ACTUAL EXAM
COMPLETE 220+ QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+
What is a risk? - CORRECT ANSWER ✔✔- Uncertainty of loss
Under absolute liability, does an injured party need to prove negligence? -
CORRECT ANSWER ✔✔- No. Absolute liability exists when a condition or
conduct is inherently dangerous, so proof of negligence is not required.
What determines an insurer's responsibility for payment, as stated in an insurance
policy? - CORRECT ANSWER ✔✔- Limits of liability
(Insurance Carried/Insurance Required) x Loss Amount= - CORRECT ANSWER
✔✔- Loss payment
What is the term for the causes of loss insured against in an insurance policy? -
CORRECT ANSWER ✔✔- Peril
What do individuals use to transfer their risk of loss to a larger group? -
CORRECT ANSWER ✔✔- Insurance
A tornado that destroys a property would be an example of what? - CORRECT
ANSWER ✔✔- Peril
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What sublimit in a liability policy puts a ceiling on the payment for all claims that
arise from a single accident? - CORRECT ANSWER ✔✔- Per occurrence
Insurance is a contract that protects the insured from what? - CORRECT
ANSWER ✔✔- Loss
A situation in which a person can experience only a loss and no gain presents what
type of risk? - CORRECT ANSWER ✔✔- Pure risk
What is the difference between vacancy and unoccupancy? - CORRECT
ANSWER ✔✔- Vacancy refers to an insured structure in which no people have
been living or working and no property has been stored for the specified period of
time. Unoccupancy refers to an insured structure in which no people have been
living or working within the required period of time, but some property is stored.
Conditions that increase the chance of a loss are know as what? - CORRECT
ANSWER ✔✔- Hazards
How is the actual cash value of a property calculated? - CORRECT ANSWER
✔✔- Current replacement cost minus depreciation
What are the three types of hazards? - CORRECT ANSWER ✔✔- Physical,
Moral, Morale
A policy that covers all causes of loss except for those specifically excluded is
known as what type of policy? - CORRECT ANSWER ✔✔- Open Peril (or
special) form
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What is negligence? - CORRECT ANSWER ✔✔- Failure to act as a reasonable,
prudent person under given circumstances
What is burglary? - CORRECT ANSWER ✔✔- A forced entry into another's
premises with felonious intent
What type of limits of liability has the limits separately stated for different
coverages? - CORRECT ANSWER ✔✔- Split limits
In property insurance, when must insurable interest exist? - CORRECT ANSWER
✔✔- At the time of loss
A person who does not lock the doors to his or her house shows an indifferent
attitude. What type of hazard does this represents? - CORRECT ANSWER ✔✔-
Morale
Both robbery and burglary can be considered what? - CORRECT ANSWER ✔✔-
Theft
What is a deductible in an insurance policy? - CORRECT ANSWER ✔✔- A
specified dollar amount that the insured must pay before the insurer will pay the
policy benefits
In property insurance, what is actual cash value? - CORRECT ANSWER ✔✔-
Replacement cost at the time of loss, minus depreciation
TEXAS PROPERTY AND CASUALTY
INSURANCE STUDY GUIDE ACTUAL EXAM
COMPLETE 220+ QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+
What is a risk? - CORRECT ANSWER ✔✔- Uncertainty of loss
Under absolute liability, does an injured party need to prove negligence? -
CORRECT ANSWER ✔✔- No. Absolute liability exists when a condition or
conduct is inherently dangerous, so proof of negligence is not required.
What determines an insurer's responsibility for payment, as stated in an insurance
policy? - CORRECT ANSWER ✔✔- Limits of liability
(Insurance Carried/Insurance Required) x Loss Amount= - CORRECT ANSWER
✔✔- Loss payment
What is the term for the causes of loss insured against in an insurance policy? -
CORRECT ANSWER ✔✔- Peril
What do individuals use to transfer their risk of loss to a larger group? -
CORRECT ANSWER ✔✔- Insurance
A tornado that destroys a property would be an example of what? - CORRECT
ANSWER ✔✔- Peril
,2|Page
What sublimit in a liability policy puts a ceiling on the payment for all claims that
arise from a single accident? - CORRECT ANSWER ✔✔- Per occurrence
Insurance is a contract that protects the insured from what? - CORRECT
ANSWER ✔✔- Loss
A situation in which a person can experience only a loss and no gain presents what
type of risk? - CORRECT ANSWER ✔✔- Pure risk
What is the difference between vacancy and unoccupancy? - CORRECT
ANSWER ✔✔- Vacancy refers to an insured structure in which no people have
been living or working and no property has been stored for the specified period of
time. Unoccupancy refers to an insured structure in which no people have been
living or working within the required period of time, but some property is stored.
Conditions that increase the chance of a loss are know as what? - CORRECT
ANSWER ✔✔- Hazards
How is the actual cash value of a property calculated? - CORRECT ANSWER
✔✔- Current replacement cost minus depreciation
What are the three types of hazards? - CORRECT ANSWER ✔✔- Physical,
Moral, Morale
A policy that covers all causes of loss except for those specifically excluded is
known as what type of policy? - CORRECT ANSWER ✔✔- Open Peril (or
special) form
, 3|Page
What is negligence? - CORRECT ANSWER ✔✔- Failure to act as a reasonable,
prudent person under given circumstances
What is burglary? - CORRECT ANSWER ✔✔- A forced entry into another's
premises with felonious intent
What type of limits of liability has the limits separately stated for different
coverages? - CORRECT ANSWER ✔✔- Split limits
In property insurance, when must insurable interest exist? - CORRECT ANSWER
✔✔- At the time of loss
A person who does not lock the doors to his or her house shows an indifferent
attitude. What type of hazard does this represents? - CORRECT ANSWER ✔✔-
Morale
Both robbery and burglary can be considered what? - CORRECT ANSWER ✔✔-
Theft
What is a deductible in an insurance policy? - CORRECT ANSWER ✔✔- A
specified dollar amount that the insured must pay before the insurer will pay the
policy benefits
In property insurance, what is actual cash value? - CORRECT ANSWER ✔✔-
Replacement cost at the time of loss, minus depreciation
