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TEXAS PROPERTY AND CASUALTY INSURANCE
PRACTICE EXAM NEWEST 2024 ACTUAL EXAM 350
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
Conditions that increase the chance of a loss are know as what? - ANSWER- Hazards
How is the actual cash value of a property calculated? - ANSWER- Current replacement cost minus depreciation
What are the three types of hazards? - ANSWER- Physical, Moral, Morale
A policy that covers all causes of loss except for those specifically excluded is known as what type of policy? - ANSWER- Open Peril (or special) form
What is negligence? - ANSWER- Failure to act as a reasonable, prudent person under given circumstances
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What is burglary? - ANSWER- A forced entry into another's premises with felonious intent
What type of limits of liability has the limits separately stated for different coverages? - ANSWER- Split limits
In property insurance, when must insurable interest exist? - ANSWER- At the time of loss
What is a risk? - ANSWER- Uncertainty of loss
Under absolute liability, does an injured party need to prove negligence? - ANSWER- No. Absolute liability exists when a condition or conduct is inherently dangerous, so proof of negligence is not required.
What determines an insurer's responsibility for payment, as stated in an insurance policy? - ANSWER- Limits of liability
(Insurance Carried/Insurance Required) x Loss Amount= - ANSWER- Loss payment
What is the term for the causes of loss insured against in an insurance policy? - ANSWER- Peril 2 / 4
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What do individuals use to transfer their risk of loss to a larger group? - ANSWER- Insurance
A tornado that destroys a property would be an example of what? - ANSWER- Peril
What sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident? - ANSWER- Per occurrence
Insurance is a contract that protects the insured from what? - ANSWER- Loss
A situation in which a person can experience only a loss and no gain presents what type of risk? - ANSWER- Pure risk
What is the difference between vacancy and unoccupancy? - ANSWER- Vacancy refers to an insured structure in which no people have been living or working and no property has been stored for the specified period of time. Unoccupancy refers to an insured structure in which no people have been living or working within the required period of time, but some property is stored. 3 / 4
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A person who does not lock the doors to his or her house shows an indifferent attitude. What type of hazard does this represents?
- ANSWER- Morale
Both robbery and burglary can be considered what? - ANSWER- Theft
What is a deductible in an insurance policy? - ANSWER- A specified dollar amount that the insured must pay before the insurer will pay the policy benefits
In property insurance, what is actual cash value? - ANSWER- Replacement cost at the time of loss, minus depreciation
Wagering on a sporting event is known as what type of risk? - ANSWER- Speculative
What term defines an exact, direct, and uninterrupted cause of loss? - ANSWER- Proximate cause
What is subrogation? - ANSWER- An insurer's legal right to seek damages from third parties after reimbursing insureds for a loss
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