TEXAS INSURANCE PROPERTY AND CASUALTY
EXAM 300 QUESTIONS AND ANSWERS LATEST
UPDATE 2024
A condition or situation that presents a possibility of loss is a (an):
exposure
The purpose of insurance is to:
transfer risk
Which hazard can be described as a careless attitude or general indifference on
the part of the insured toward the occurrence of loss?
morale
Which risk is insurable?
pure
With regard to insurance, risk can be defined as:
uncertainty regarding loss
Treating risk by purchasing insurance is an example of what type of risk
management?
transfer
Robert and Carolyn live in a busy city and decide that not owning a car is the
solution to not experience having a car stolen. What method describes this
philosophy?
avoidance
Dishonesty on the part of an insured is an example of what?
a moral hazard
What is an example of reduction as a method of handling risk?
Installing a burglar alarm
Driving too fast and not wearing a seat belt are examples of?
morale hazard
The risk that involves the chance of both loss and gain is?
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, speculative risk
Self-insurance is an example of what kind of risk treatment?
Retention
If John's father transfers ownership of a house to John, can John buy insurance?
Yes because he has an insurable
interest. Fire would be an example of a
what? peril
What is the actual cause of a loss?
peril
What kind of risk is the stock market?
speculative risk
A is a condition that increases the chance of loss.
hazard
Faulty wiring causes a fire that destroys a building. The faulty wiring is
considered to be a(n):
hazard
A chance, possibility, or uncertainty of loss is known as?
risk
Examples of perils are ?
fire, wind and lightning
Indemnity insurance will ?
restores insured to pre-loss
condition The types of hazards
are ?
moral, morale, and physical
is when people with a greater than average exposure to loss
to purchase insurance.
Adverse selection
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, Methods of handling risk are avoidance, reduction, retention, transfer and .
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, Sharing (ARRTS)
Elements of insurable risk are calculable, affordable, non-
catastrophic, homogenous, accidental and .
Measurable (CANHAM)
Myron, who is 16, signs a contract to lease a car. This would probably not
be considered a valid contract under the law because .
He is not competent at 16.
Ben bought an automobile four years ago for $15,000. Today it is worth $6,000.
According to the principle of indemnity, how much should Ben receive if the car
is totally demolished?
$6,000
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?
$80,000
Under a unilateral contract, which parties are legally bound to perform under the
contract?
Insurer only
Which part of an insurance policy describes the responsibilities and obligations
of both the insurance company and the insured under the policy?
Conditions
The insuring agreement section of a policy describes the you are insured
against.
perils
The elements of a valid contract are legal purpose, consideration,
competent parties, and .
Offer and acceptance
Both parties rely on statements made to each other when writing a contract. This
is known as?
Utmost good faith
The limits of liability are found in which of the following sections of a casualty
policy?
Ask for any Exams or Study materials from ()
EXAM 300 QUESTIONS AND ANSWERS LATEST
UPDATE 2024
A condition or situation that presents a possibility of loss is a (an):
exposure
The purpose of insurance is to:
transfer risk
Which hazard can be described as a careless attitude or general indifference on
the part of the insured toward the occurrence of loss?
morale
Which risk is insurable?
pure
With regard to insurance, risk can be defined as:
uncertainty regarding loss
Treating risk by purchasing insurance is an example of what type of risk
management?
transfer
Robert and Carolyn live in a busy city and decide that not owning a car is the
solution to not experience having a car stolen. What method describes this
philosophy?
avoidance
Dishonesty on the part of an insured is an example of what?
a moral hazard
What is an example of reduction as a method of handling risk?
Installing a burglar alarm
Driving too fast and not wearing a seat belt are examples of?
morale hazard
The risk that involves the chance of both loss and gain is?
Ask for any Exams or Study materials from ()
, speculative risk
Self-insurance is an example of what kind of risk treatment?
Retention
If John's father transfers ownership of a house to John, can John buy insurance?
Yes because he has an insurable
interest. Fire would be an example of a
what? peril
What is the actual cause of a loss?
peril
What kind of risk is the stock market?
speculative risk
A is a condition that increases the chance of loss.
hazard
Faulty wiring causes a fire that destroys a building. The faulty wiring is
considered to be a(n):
hazard
A chance, possibility, or uncertainty of loss is known as?
risk
Examples of perils are ?
fire, wind and lightning
Indemnity insurance will ?
restores insured to pre-loss
condition The types of hazards
are ?
moral, morale, and physical
is when people with a greater than average exposure to loss
to purchase insurance.
Adverse selection
Ask for any Exams or Study materials from ()
, Methods of handling risk are avoidance, reduction, retention, transfer and .
Ask for any Exams or Study materials from ()
, Sharing (ARRTS)
Elements of insurable risk are calculable, affordable, non-
catastrophic, homogenous, accidental and .
Measurable (CANHAM)
Myron, who is 16, signs a contract to lease a car. This would probably not
be considered a valid contract under the law because .
He is not competent at 16.
Ben bought an automobile four years ago for $15,000. Today it is worth $6,000.
According to the principle of indemnity, how much should Ben receive if the car
is totally demolished?
$6,000
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?
$80,000
Under a unilateral contract, which parties are legally bound to perform under the
contract?
Insurer only
Which part of an insurance policy describes the responsibilities and obligations
of both the insurance company and the insured under the policy?
Conditions
The insuring agreement section of a policy describes the you are insured
against.
perils
The elements of a valid contract are legal purpose, consideration,
competent parties, and .
Offer and acceptance
Both parties rely on statements made to each other when writing a contract. This
is known as?
Utmost good faith
The limits of liability are found in which of the following sections of a casualty
policy?
Ask for any Exams or Study materials from ()
