Texas Property & Casualty Insurance Exam Questions with Verified Solutions (420 Questions) Update
Question : A condition or situation that presents a possibility
of loss is a (an):
CORRECT ANSWER : exposure
Question : The purpose of insurance is to:
CORRECT ANSWER : transfer risk
Question : Which hazard can be described as a careless
attitude or general indifference on the part of the insured toward the occurrence of loss?
CORRECT ANSWER : morale
Question : Which risk is insurable?
CORRECT ANSWER : pure
Question : With regard to insurance, risk can be defined as:
CORRECT ANSWER : uncertainty regarding loss
Question : Treating risk by purchasing insurance is an
example of what type of risk management?
CORRECT ANSWER : transfer
Question : 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 ANSWER : avoidance
Question : Dishonesty on the part of an insured is an example
of what?
CORRECT ANSWER : a moral hazard
Question : What is an example of reduction as a method of
handling risk?
CORRECT ANSWER : Installing a burglar alarm
Question : Driving too fast and not wearing a seat belt are
examples of?
CORRECT ANSWER : morale hazard
Question : The risk that involves the chance of both loss and
gain is?
CORRECT ANSWER : speculative risk
Question : Self-insurance is an example of what kind of risk
treatment?
CORRECT ANSWER : Retention
Question : If John's father transfers ownership of a house to
John, can John buy insurance?
CORRECT ANSWER : Yes because he has an insurable
interest.
Question : Fire would be an example of a what?
CORRECT ANSWER : peril
Question : What is the actual cause of a loss?
CORRECT ANSWER : peril
Question : What kind of risk is the stock market?
CORRECT ANSWER: speculative risk
Question : A ____ is a condition that increases the chance of
loss.
CORRECT ANSWER : hazard
Question : Faulty wiring causes a fire that destroys a building.
The faulty wiring is considered to be a(n):
CORRECT ANSWER : hazard
Question : A chance, possibility, or uncertainty of loss is
known as?