Texas Property & Casualty Insurance Exam Questions and Answers (Solved Papers) A condition or situation that presents a possibility of loss is a
(an): - Correct Answers ✅exposure
The purpose of insurance is to: - Correct Answers
✅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? - Correct Answers ✅morale Which risk is insurable? - Correct Answers ✅pure
With regard to insurance, risk can be defined as: - Correct
Answers ✅uncertainty regarding loss Treating risk by purchasing insurance is an example of what type of risk management? - Correct Answers ✅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? - Correct Answers ✅avoidance Dishonesty on the part of an insured is an example of what? - Correct Answers ✅a moral hazard 1 / 4
Texas Property & Casualty Insurance Exam Questions and Answers (Solved Papers) What is an example of reduction as a method of handling risk? - Correct Answers ✅Installing a burglar alarm Driving too fast and not wearing a seat belt are examples of?
- Correct Answers ✅morale hazard
The risk that involves the chance of both loss and gain is? - Correct Answers ✅speculative risk Self-insurance is an example of what kind of risk treatment? - Correct Answers ✅Retention If John's father transfers ownership of a house to John, can John buy insurance? - Correct Answers ✅Yes because he has an insurable interest.Fire would be an example of a what? - Correct Answers ✅peril What is the actual cause of a loss? - Correct Answers ✅peril 2 / 4
Texas Property & Casualty Insurance Exam Questions and Answers (Solved Papers) What kind of risk is the stock market? - Correct Answers ✅speculative risk A ____ is a condition that increases the chance of loss. - Correct Answers ✅hazard Faulty wiring causes a fire that destroys a building. The faulty
wiring is considered to be a(n): - Correct Answers ✅hazard
A chance, possibility, or uncertainty of loss is known as? - Correct Answers ✅risk Examples of perils are_____? - Correct Answers ✅fire, wind and lightning Indemnity insurance will _____? - Correct Answers ✅restores insured to pre-loss condition The types of hazards are_____? - Correct Answers ✅moral, morale, and physical ________ is when people with a greater than average exposure to loss to purchase insurance. - Correct Answers ✅Adverse selection 3 / 4
Texas Property & Casualty Insurance Exam Questions and Answers (Solved Papers) Methods of handling risk are avoidance, reduction, retention, transfer and _____. - Correct Answers ✅Sharing (ARRTS) Elements of insurable risk are calculable, affordable, non- catastrophic, homogenous, accidental and _____. - Correct Answers ✅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 _____. - Correct Answers ✅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?
- Correct Answers ✅$6,000
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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? - Correct Answers ✅$80,000 Under a unilateral contract, which parties are legally bound to perform under the contract? - Correct Answers ✅Insurer only