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TEXAS PROPERTY AND CASUALTY EXAM AND PRACTICE QUESTIONS NEWEST 2024 ACTUAL EXAM QUESTIONS, Exams of Industrial Property Law

Henderson State University (HSU)Industrial Property Law

TEXAS PROPERTY AND CASUALTY EXAM AND PRACTICE QUESTIONS NEWEST 2024 ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS |ALREADY GRADED A Property vs Casualty: What is considered property? - CORRECT ANSWER - Structure & Personal Property Property vs Casualty: What is considered casualty? - CORRECT ANSWER - Non- property losses. Legal liability to others. 3rd Party Risk - CORRECT ANSWER - uncertainty of financial loss Pure Risk - CORRECT ANSWER - Chance of Loss Speculative Risk - CORRECT ANSWER - Chance of Loss or Gain (Gamble) Insurance (covers which type of risk?) - CORRECT ANSWER - Pure Risk Only

Typology: Exams

2023/2024

Available from 09/11/2024

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TEXAS PROPERTY AND CASUALTY EXAM AND
PRACTICE QUESTIONS NEWEST 2024 ACTUAL
EXAM QUESTIONS AND CORRECT DETAILED
ANSWERS |ALREADY GRADED A
Property vs Casualty: What is considered property? - CORRECT ANSWER -
Structure & Personal Property
Property vs Casualty: What is considered casualty? - CORRECT ANSWER - Non-
property losses. Legal liability to others. 3rd Party
Risk - CORRECT ANSWER - uncertainty of financial loss
Pure Risk - CORRECT ANSWER - Chance of Loss
Speculative Risk - CORRECT ANSWER - Chance of Loss or Gain (Gamble)
Insurance (covers which type of risk?) - CORRECT ANSWER - Pure Risk Only
How does the law of large numbers apply in insurance? - CORRECT ANSWER -
Actuaries use the law of large numbers to estimate claims
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.
What is a peril? - CORRECT ANSWER - cause of loss
What is a hazard? - CORRECT ANSWER - things that increase the chance of a peril
happening
Three types of hazards - CORRECT ANSWER - Physical: visible characteristic
(dead tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
Proximate Cause - CORRECT ANSWER - First cause in an unbroken chain of
events
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)
What is representation? - CORRECT ANSWER - Information believed to be true.
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Download TEXAS PROPERTY AND CASUALTY EXAM AND PRACTICE QUESTIONS NEWEST 2024 ACTUAL EXAM QUESTIONS and more Exams Industrial Property Law in PDF only on Docsity!

TEXAS PROPERTY AND CASUALTY EXAM AND

PRACTICE QUESTIONS NEWEST 2024 ACTUAL

EXAM QUESTIONS AND CORRECT DETAILED

ANSWERS |ALREADY GRADED A

Property vs Casualty: What is considered property? - CORRECT ANSWER - Structure & Personal Property Property vs Casualty: What is considered casualty? - CORRECT ANSWER - Non- property losses. Legal liability to others. 3rd Party Risk - CORRECT ANSWER - uncertainty of financial loss Pure Risk - CORRECT ANSWER - Chance of Loss Speculative Risk - CORRECT ANSWER - Chance of Loss or Gain (Gamble) Insurance (covers which type of risk?) - CORRECT ANSWER - Pure Risk Only How does the law of large numbers apply in insurance? - CORRECT ANSWER - Actuaries use the law of large numbers to estimate claims 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. What is a peril? - CORRECT ANSWER - cause of loss What is a hazard? - CORRECT ANSWER - things that increase the chance of a peril happening Three types of hazards - CORRECT ANSWER - Physical: visible characteristic (dead tree) Moral: Dishonest tendencies Morale: Attitude of carelessness Proximate Cause - CORRECT ANSWER - First cause in an unbroken chain of events 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) What is representation? - CORRECT ANSWER - Information believed to be true.

What is misrepresentation? - CORRECT ANSWER - Information that is not true. False information. 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) What is fraud? - CORRECT ANSWER - An all out effort by one party to deceive and cheat the other. What is warranty? - CORRECT ANSWER - Guarantee that an insured will or will not do something What are the four major parts to an insurance policy structure? (DICE) - CORRECT ANSWER - D - Declarations Page (First Page) I - Insuring Agreement (Insurers promise to pay) C - Conditions (Rules) E - Exclusions (Not covered) What information is on the declarations page? (Remember 6 Ps) - CORRECT ANSWER - Policy Number Parties Property Description/Location Policy Term Policy Limits/Deductibles Premium What is Limit of Liability? - CORRECT ANSWER - The max amount of coverage agreed to be paid per loss What is Aggregate Limit? - CORRECT ANSWER - The max amount of the total of all claims paid per policy period Insuring Agreement? - CORRECT ANSWER - Insurers promise to pay Conditions - CORRECT ANSWER - Contains the duties and rights of both parties What are the Insured's duties after a loss? - CORRECT ANSWER - Submit a proof of loss or sworn statement within 91 days. Protect property from further damage. Cooperate with the insurer. What is the Mortgage Clause? - CORRECT ANSWER - Nothing the insured does, even dishonestly, can prevent the mortgagee from collecting under the policy What are the two types of termination of a policy? - CORRECT ANSWER - Cancellation - occurs when the insured/insurer cancels the contract before the end of the policy period. Non-Renewals - occurs at the end of the policy period. Cancellation Requirements - CORRECT ANSWER - Insurer - must provide a 10 day advance written notice to the insured that the policy will be cancelled.

Strict Liability - CORRECT ANSWER - Product defect claims Negligence - CORRECT ANSWER - Failure to do or not to do something that ordinarily should be or not be done that results in a loss Legal Duty - CORRECT ANSWER - Owe an obligation to act or not act Breach of Duty - CORRECT ANSWER - Failure to comply with a duty Actual Loss - CORRECT ANSWER - Another suffers a loss Proximate Cause (Regarding Duties) - CORRECT ANSWER - Breach of duty is the direct cause of loss Bodily Injury - CORRECT ANSWER - Injuries including pain and suffering Property Damage - CORRECT ANSWER - Damages including loss of use Personal Injury - CORRECT ANSWER - Damage to a persons character or reputation What is an accident? - CORRECT ANSWER - an event that is sudden and unexpected What is occurrence? - CORRECT ANSWER - an event that happens over time Compensatory Damage - CORRECT ANSWER - To indemnify the injured party Punitive Damages - CORRECT ANSWER - To punish the wrongdoer due to gross negligence Domestic - CORRECT ANSWER - Same state Foreign - CORRECT ANSWER - Another state Alien - CORRECT ANSWER - Another country Stock Insurers - CORRECT ANSWER - Owned by stockholders/shareholders For profit company Mutual Insurers - CORRECT ANSWER - Owned by policyholders Incorporated/Managed by board of directors chosen by policy holders Self-Insurance - CORRECT ANSWER - Business organizations that set up their own savings accounts to pay for their own claims, property damage, or liability. Residual Markets - CORRECT ANSWER - Government (Fed & State) help provide insurance that is not ordinarily available from private insurers.

Fed Ex. National Flood Insurance Program (NFIP) and Federal Crop and Hail Insurance State Ex. Texas Auto Insurance Plan Assoc (TAIPA), Texas Windstorm Insurance Assoc (TWIA), Joint Underwriting Assoc (JUA), and Fair Access to Insurance Requirements (FAIR) Three Federal Regulation Sources - CORRECT ANSWER - Fair Credit Reporting Act Terrorism Risk Insurance Act Gramm Leach Bliley Act Fair Credit Reporting Act - CORRECT ANSWER - to protect consumers when adverse action (increase in rates) resulting from review of credit Terrorism Risk Insurance Act - CORRECT ANSWER - has to be certified by sec of state, sec of treasury, and attorney general as an eligible act not the president. Will not pay more than 100 billion in aggregate. What does the commissioner do? - CORRECT ANSWER - Runs the Texas Department of Insurance (TDI) A new commissioner is appointed by the governor for 2 yr term, ending Feb 1st of each odd numbered year. Investigations and Examinations by the Commissioner - CORRECT ANSWER - At least once every five years or more often if deemed necessary What is the Texas Property and Casualty Insurance Guaranty Association - CORRECT ANSWER - Protects claimants and policy holders in the event of insurer insolvency (cannot pay claims). Governed by a board of directors - 5 members from insurers and 4 members from the public Private Companies not TDI that publish the financial strength ratings include: - CORRECT ANSWER - A.M. Best (A++ to F) Moody's Standard and Poor's Definition of agent - CORRECT ANSWER - Anyone who solicits insurance or aids in placing risk, delivering policies, or collecting policies on behalf of an insurance company. Temporary Agents License - CORRECT ANSWER - Issued for period of 90 days; No renewal Only 1 every 6 months Cannot be paid any commission for sales Must have a company or agent sponsor Must complete 40hrs of study within 14days of applying for the license No test required

Part B one (personal auto policy) - CORRECT ANSWER - Medical Payments Part B two (personal auto policy) - CORRECT ANSWER - Texas Personal Injury Protection Part C (personal auto policy) - CORRECT ANSWER - Uninsured and Underinsured Motorist Part D (personal auto policy) - CORRECT ANSWER - Damage to your auto Bodily Injury (personal auto policy) - CORRECT ANSWER - Bodily harm, sickness or disease including death Bodily Injury covers injuries caused by the insured including what? - CORRECT ANSWER - Medical Expenses, Lost Wages, Pain & Suffering Property Damage (personal auto policy) - CORRECT ANSWER - Includes physical injury to, destruction of, or loss of use of tangible property Property damage covers damages caused by insured including what? - CORRECT ANSWER - Damage to another vehicle, damage to a building, damage to a wall or fence Minimum Limits of Liability in Texas - CORRECT ANSWER - 30/60/ 30,000 bodily injury per person 60,000 bodily injury per accident 25,000 for damage per accident Types of Supplementary Payments (personal auto policy) - CORRECT ANSWER - Bonds - premiums for appeal and bail bonds (up to $250) Loss of Earnings - up to $200 per day, if insured misses work due to trial Liability Exclusions - CORRECT ANSWER - Use of vehicle without permission Use of vehicle used as a public or taxi transporter Use of vehicle in prearranged racing or speed contest Loss caused intentionally by the insured Damage to property owned or being transported by the insured Motorized vehicles with fewer than four wheels Other Insurance Clause - CORRECT ANSWER - Any insurance the company provides for a vehicle that is not owned by the insured will be considered excess to other insurance Medical Payments - CORRECT ANSWER - Pays for: Insured occupying an auto or as a pedestrian Pays regardless of fault up to three years Minimum limit is $500 per person Texas Personal Injury Protection (PIP) - CORRECT ANSWER - Pays for:

Insured occupying an auto or as a pedestrian Insures the guest passenger Pays regardless of fault up to three years Medical and funeral expenses 80% of lost wages OR essential services A person cannot collect both lost wages and essential services Minimum limit is $2500 per person (must be included with all minimum limits of liability policies issued in Texas unless rejected in writing) Uninsured Motorist Coverage - CORRECT ANSWER - Provides coverage when at- fault third party does not carry liability insurance Includes hit and run Physical contact with another vehicle must occur Underinsured Motorist Coverage - CORRECT ANSWER - Provides coverage when at-fault third party does not carry enough liability insurance Uninsured/Underinsured Coverage Limits - CORRECT ANSWER - Min 30/60/25 or combined single limit of $85, Must be included in all liability policies issued in Texas unless the insured rejects the coverage in writing Collision (Physical Damage) - CORRECT ANSWER - Covers specified perils only (collision with another veh or object) Upset of the vehicle (overturned) Exclusions:

  • Sound and video equipment - unless permanently installed. If permanently installed
  • $1500 max.
  • Personal property in the car
  • Customized equipment - unless endorsed
  • Wear and tear
  • Mechanical or Electrical breakdown or failure
  • Road damage to tires
  • War
  • Freezing Comprehensive Loss - CORRECT ANSWER - Covers Fire, Explosion, Wind, Hail, Earthquake, Flood, Vandalism, Theft, Glass Breakage, Contact with bird or animal Transportation Expenses Coverage - CORRECT ANSWER - If you have comprehensive coverage and have a total theft, you can get $20/day max $600 per loss after 48hrs of loss Newly Acquired Vehicles - CORRECT ANSWER - If you have comp/coll = automatic coverage is provided for 14 days. (Must notify within 14 days) If you have no comp/coll = only covered for 4 days with broadest coverage on policy. (Must notify within 4 days)