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TEXAS PROPERTY & CAS UALTY
INSURANCE LICENSE EX AM WITH
ACCURATE ANSWERS
Question :Property vs Casualty: What is considered property?
Correct answer:Structure & Personal Property
Question :Property vs Casualty: What is considered casualty?
Correct answer:Non-property losses. Legal liability to
others. 3rd Party
Question :Risk
Correct answer:uncertainty of financial loss
Question :Pure Risk
Correct answer:Chance of Loss
Question :Speculative Risk
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Correct answer:Chance of Loss or Gain (Gamble)
Question :Insurance (covers which type of risk?)
Correct answer:Pure Risk Only
Question :How does the law of large numbers apply in
insurance?
Correct answer:Actuaries use the law of large numbers to
estimate claims
Question :What is the law of large numbers?
Correct answer:as the number of a similar loss exposure
increases, the more accurate claims can be predicted from the group.
Question :What is a peril?
Correct answer:cause of loss
Question :What is a hazard?
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Correct answer:things that increase the chance of a peril
happening
Question :Three types of hazards
Correct answer:Physical: visible characteristic (dead tree)Moral: Dishonest tendenciesMorale: Attitude of carelessness
Question :Proximate Cause
Correct answer:First cause in an unbroken chain of events
Question :Elements of a legal contract (CALC)
Correct answer:C - Competent parties (18/Right frame of
mind)A - Agreement (Both parties agree)L - Legal Purpose (The risk is LEGAL)C - Consideration (It has to be fair)
Question :What is representation?
Correct answer:Information believed to be true.
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Question :What is misrepresentation?
Correct answer:Information that is not true. False
information.
Question :What is material misrepresentation?
Correct answer:Information that is not true but would
have caused the insurer not to issue the policy. (4 prev spd tix)
Question :What is fraud?
Correct answer:An all out effort by one party to deceive
and cheat the other.
Question :What is warranty?
Correct answer:Guarantee that an insured will or will not
do something
Question :What are the four major parts to an insurance
policy structure? (DICE)