Texas Property & Casualty License
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What is the insuring agreement?
✔✔The section of the policy that states what losses the insurer will cover.
What is a policy endorsement?
✔✔A written modification to the terms of an insurance policy.
What is the difference between named-peril and all-risk coverage?
✔✔Named-peril covers only listed perils; all-risk covers all perils except those excluded.
What is a loss valuation clause?
✔✔Specifies how a claim will be calculated and paid.
What is a vacancy clause in property insurance?
✔✔Reduces or suspends coverage if a building is unoccupied for a specified period.
What is a coinsurance clause in property insurance?
✔✔Requires the insured to carry insurance equal to a specified percentage of the property’s
value to receive full payment.
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,What is an exclusion in an insurance policy?
✔✔A risk, condition, or loss not covered by the policy.
What is a condition in an insurance policy?
✔✔A provision that specifies duties of the insured or insurer.
What does casualty insurance cover?
✔✔Liability for injury or damage to others or their property.
Who is the first party in an insurance contract?
✔✔The insured or policyholder.
Who is the second party in an insurance contract?
✔✔The insurance company.
What is a premium?
✔✔The amount paid by the insured for coverage.
What is a deductible?
✔✔The amount the insured must pay before the insurer pays for a loss.
What is an insurable interest?
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, ✔✔A financial or ownership interest in the property or person insured.
What is a peril in insurance terms?
✔✔A specific cause of loss, such as fire, theft, or windstorm.
What is a hazard in insurance?
✔✔A condition that increases the likelihood or severity of a loss.
What is the principle of indemnity?
✔✔The insured should not profit from a loss but be restored to the previous financial position.
What is subrogation?
✔✔The insurer’s right to pursue a third party responsible for a loss after paying a claim.
What is actual cash value?
✔✔Replacement cost minus depreciation.
What is replacement cost coverage?
✔✔Pays the amount to replace damaged property without deducting for depreciation.
What is the purpose of an insurance binder?
✔✔Provides temporary proof of coverage before the policy is issued.
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Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What is the insuring agreement?
✔✔The section of the policy that states what losses the insurer will cover.
What is a policy endorsement?
✔✔A written modification to the terms of an insurance policy.
What is the difference between named-peril and all-risk coverage?
✔✔Named-peril covers only listed perils; all-risk covers all perils except those excluded.
What is a loss valuation clause?
✔✔Specifies how a claim will be calculated and paid.
What is a vacancy clause in property insurance?
✔✔Reduces or suspends coverage if a building is unoccupied for a specified period.
What is a coinsurance clause in property insurance?
✔✔Requires the insured to carry insurance equal to a specified percentage of the property’s
value to receive full payment.
1
,What is an exclusion in an insurance policy?
✔✔A risk, condition, or loss not covered by the policy.
What is a condition in an insurance policy?
✔✔A provision that specifies duties of the insured or insurer.
What does casualty insurance cover?
✔✔Liability for injury or damage to others or their property.
Who is the first party in an insurance contract?
✔✔The insured or policyholder.
Who is the second party in an insurance contract?
✔✔The insurance company.
What is a premium?
✔✔The amount paid by the insured for coverage.
What is a deductible?
✔✔The amount the insured must pay before the insurer pays for a loss.
What is an insurable interest?
2
, ✔✔A financial or ownership interest in the property or person insured.
What is a peril in insurance terms?
✔✔A specific cause of loss, such as fire, theft, or windstorm.
What is a hazard in insurance?
✔✔A condition that increases the likelihood or severity of a loss.
What is the principle of indemnity?
✔✔The insured should not profit from a loss but be restored to the previous financial position.
What is subrogation?
✔✔The insurer’s right to pursue a third party responsible for a loss after paying a claim.
What is actual cash value?
✔✔Replacement cost minus depreciation.
What is replacement cost coverage?
✔✔Pays the amount to replace damaged property without deducting for depreciation.
What is the purpose of an insurance binder?
✔✔Provides temporary proof of coverage before the policy is issued.
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