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TEXAS PROPERTY AND CASUALTY INSURANCE EXAM NEWEST
2025/2026 ACTUAL EXAM WITH COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS (100% VERIFIED ANSWERS)
|ALREADY GRADED A+| ||PROFESSOR VERIFIED||
Harry Arne and his cousin each own 50% of a $160,000 duplex.
Suppose Harry purchases $160,000 of insurance on the home. If
it burns to the ground, how much would Harry collect? -
ANSWER-$80,000
Under a unilateral contract, which parties are legally bound to
perform under the contract? - ANSWER-Insurer only
Which part of an insurance policy describes the responsibilities
and obligations of both the insurance company and the insured
under the policy? - ANSWER-Conditions
The insuring agreement section of a policy describes the ____
you are insured against. - ANSWER-perils
The elements of a valid contract are legal purpose, consideration,
competent parties, and _____. - ANSWER-Offer and acceptance
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Both parties rely on statements made to each other when writing
a contract. This is known as? - ANSWER-Utmost good faith
The limits of liability are found in which of the following sections of
a casualty policy? - ANSWER-Declarations
An insurance company issued a homeowners policy that included
ambiguous language regarding how a loss was settled. The
insured sued the insurance company and won. The judge stated
that due to the ambiguous language in the contract the decision
must be made in favor of the insured. The judge was basing this
decision on which of the following types of insurance contract? -
ANSWER-Contract of adhesion
A policy may be amended only with a(n): - ANSWER-
endorsement
The procedure for resolving a disagreement between an insured
and an insurance company about a loss is described in which of
the following parts of an insurance policy? - ANSWER-Conditions
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Who does a personal contract protect? - ANSWER-The individual
who owns the property.
Which one of the following terms indicates that an insurance
contract contains the enforceable promises of only one party? -
ANSWER-Unilateral
The principle that restores someone to the condition he enjoyed
before a loss is_____? - ANSWER-indemnity
Bryce owns a $50,000 lake cabin that he has insured for $40,000.
He sustains a $5,000 covered loss. According to the principle of
indemnity, how much will his insurer pay? - ANSWER-$5000
The _____ page in an insurance contract contains information
about the risk, the effective date of coverage, deductible, premium
amounts, coinsurance percentage, and location of the insured
property. - ANSWER-Declarations
, 4|Page
The attempt to restore an insured to his pre-loss condition is
known as _____. - ANSWER-indemnification
The insured is looking for the amount of coverage in a property
and casualty policy. This information would be found in the
______. - ANSWER-declarations
Jennifer and David signed a homeowners insurance application
for coverage on their home. They did not divulge that last year
their garage burned down after their 16-year-old son left a
cigarette burning. The agent sent in the application and a policy
was issued. When another fire occurred 2 months after the policy
was issued, the company voided the policy because the agent
would not have sent in the application if he had known of the prior
loss. Which contract principle does this situation describe? -
ANSWER-Utmost good faith
The parts of a contract are competent parties, legal purpose,
offer, acceptance, and ________. - ANSWER-Consideration
(CLOAC)
TEXAS PROPERTY AND CASUALTY INSURANCE EXAM NEWEST
2025/2026 ACTUAL EXAM WITH COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS (100% VERIFIED ANSWERS)
|ALREADY GRADED A+| ||PROFESSOR VERIFIED||
Harry Arne and his cousin each own 50% of a $160,000 duplex.
Suppose Harry purchases $160,000 of insurance on the home. If
it burns to the ground, how much would Harry collect? -
ANSWER-$80,000
Under a unilateral contract, which parties are legally bound to
perform under the contract? - ANSWER-Insurer only
Which part of an insurance policy describes the responsibilities
and obligations of both the insurance company and the insured
under the policy? - ANSWER-Conditions
The insuring agreement section of a policy describes the ____
you are insured against. - ANSWER-perils
The elements of a valid contract are legal purpose, consideration,
competent parties, and _____. - ANSWER-Offer and acceptance
,2|Page
Both parties rely on statements made to each other when writing
a contract. This is known as? - ANSWER-Utmost good faith
The limits of liability are found in which of the following sections of
a casualty policy? - ANSWER-Declarations
An insurance company issued a homeowners policy that included
ambiguous language regarding how a loss was settled. The
insured sued the insurance company and won. The judge stated
that due to the ambiguous language in the contract the decision
must be made in favor of the insured. The judge was basing this
decision on which of the following types of insurance contract? -
ANSWER-Contract of adhesion
A policy may be amended only with a(n): - ANSWER-
endorsement
The procedure for resolving a disagreement between an insured
and an insurance company about a loss is described in which of
the following parts of an insurance policy? - ANSWER-Conditions
,3|Page
Who does a personal contract protect? - ANSWER-The individual
who owns the property.
Which one of the following terms indicates that an insurance
contract contains the enforceable promises of only one party? -
ANSWER-Unilateral
The principle that restores someone to the condition he enjoyed
before a loss is_____? - ANSWER-indemnity
Bryce owns a $50,000 lake cabin that he has insured for $40,000.
He sustains a $5,000 covered loss. According to the principle of
indemnity, how much will his insurer pay? - ANSWER-$5000
The _____ page in an insurance contract contains information
about the risk, the effective date of coverage, deductible, premium
amounts, coinsurance percentage, and location of the insured
property. - ANSWER-Declarations
, 4|Page
The attempt to restore an insured to his pre-loss condition is
known as _____. - ANSWER-indemnification
The insured is looking for the amount of coverage in a property
and casualty policy. This information would be found in the
______. - ANSWER-declarations
Jennifer and David signed a homeowners insurance application
for coverage on their home. They did not divulge that last year
their garage burned down after their 16-year-old son left a
cigarette burning. The agent sent in the application and a policy
was issued. When another fire occurred 2 months after the policy
was issued, the company voided the policy because the agent
would not have sent in the application if he had known of the prior
loss. Which contract principle does this situation describe? -
ANSWER-Utmost good faith
The parts of a contract are competent parties, legal purpose,
offer, acceptance, and ________. - ANSWER-Consideration
(CLOAC)
