Texas Property & Casualty License Exam 2024 Questions with 100% Correct Answers
Property vs Casualty: What is considered property?
Structure & Personal Property
Property vs Casualty: What is considered casualty?
Non-property losses. Legal liability to others. 3rd Party
Risk
uncertain...
Texas Property & Casualty License Exam
2024 Questions with 100% Correct Answers
Property vs Casualty: What is considered property?
Structure & Personal Property
Property vs Casualty: What is considered casualty?
Non-property losses. Legal liability to others. 3rd Party
Risk
uncertainty of financial loss
Pure Risk
Chance of Loss
Speculative Risk
Chance of Loss or Gain (Gamble)
Insurance (covers which type of risk?)
Pure Risk Only
How does the law of large numbers apply in insurance?
Actuaries use the law of large numbers to estimate claims
What is the law of large numbers?
as the number of a similar loss exposure increases, the more accurate claims can be predicted from
the group.
What is a peril?
cause of loss
What is a hazard?
things that increase the chance of a peril happening
Three types of hazards
Physical: visible characteristic (dead tree)
Moral: Dishonest tendencies
Morale: Attitude of carelessness
Proximate Cause
First cause in an unbroken chain of events
Elements of a legal contract (CALC)
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?
Information believed to be true.
What is misrepresentation?
Information that is not true. False information.
What is material misrepresentation?
Information that is not true but would have caused the insurer not to issue the policy. (4 prev spd tix)
What is fraud?
An all out effort by one party to deceive and cheat the other.
What is warranty?
Guarantee that an insured will or will not do something
What are the four major parts to an insurance policy structure? (DICE)
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)
Policy Number
Parties
Property Description/Location
Policy Term
Policy Limits/Deductibles
Premium
What is Limit of Liability?
The max amount of coverage agreed to be paid per loss
What is Aggregate Limit?
The max amount of the total of all claims paid per policy period
Insuring Agreement?
Insurers promise to pay
Conditions
Contains the duties and rights of both parties
What are the Insured's duties after a loss?
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