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TX Insurance Exam Practice QUESTIONS AND CORRECT DETAILED ANSWERS |ALREADY GRADED A+
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TX Insurance Exam Practice QUESTIONS AND CORRECT DETAILED ANSWERS |ALREADY GRADED A+
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TX Insurance Exam Practice1. A Texas Insurance License renew every _________ years - ANS-2
2. Absolute Liability - ANS-some things are inherently so dangerous that liability is absolute
or statutory, as in keeping a tiger as a pet, or keeping explosives in the home
3. ACV - ANS-Replacement Cost - Depreciation
4. Admitted Company - ANS-An insurer that meets the licensing criteria of the state it
wishes to do buisnes in has received a certificate of authority. Also known as authorized
company.
5. After this many days _________if the property is vancant some coverages will not
covered - ANS-45
6. Alien Insurer - ANS-An insurance company that is incorporated outside the United
States.
7. appraisal clause - ANS-used when the insured and insurer agree that the loss is
covered, but the amount of the loss is in dispute. located in the conditions
8. at a minimum the department must examine a carrier at least once every - ANS-5 years
9. Auto medical payments - ANS-pays injury to you or your passengers due to a traffic
accidnet regardless of fault. 3 years to file the claim
10. Binder - ANS-An oral or written statement verifying insurance coverage before the
regular policy is issued by the insurance company Good for 30 days
11. Blanket Coverage - ANS-One price to cover all as opposed to specific
12. bodily injury liability - ANS-if you injure someone in an automobile accident for which you
are legally to blame, this coverage will pay claims for injury or death against you and the
cost of legal defense.
13. Burglary - ANS-The breaking into, and entering of, a dwelling house or place with the
intent to commit a felony
14. Cease and desist - ANS-an order by an enforcement agency requiring the seller to
discontinue a specific action that may violate the law.
15. Certificate of Authority - ANS-A license for a company to sell insurance
16. Certificate of Insurance - ANS-A document provided by an insurance company as proof
that a policy has been issued and coverage is in effect.
17. Coinsurance Formula - ANS-amount payable = (did/should) x amount of loss
18. Collision coverage - ANS-coverage that protects against direct and accidental damage
due to colliding with another object or upset
19. Concealment - ANS-occurs when an individual makes a false representation by
choosing not to reveal important information
20. coverage A - ANS-dwelling - including all those attached structures and outdoor personal
property or equipment used to maintain or service the premises
21. Coverage A on a Home Policy - ANS-The structure and anything attached to it, as well
as materials used for the home.
22. Coverage amount for Trees and Shrubs on a DP1 policy - ANS-0
, 23. coverage B - ANS-other structures 10% of A
24. Coverage B on a Home Policy - ANS-other structures
25. Coverage B, coverage limit on an HO - ANS-10% of Coverage A
26. coverage C - ANS-personal property. if you flip the house upside down everything that
fell out of it
27. Coverage C on a Home Policy - ANS-Contents
28. Coverage C, coverage limit on an HO - ANS-50% of Coverage A
29. coverage D on a DP policy - ANS-20% of A pays for the loss of rent. fair rental value
30. coverage D on an HO policy - ANS-additional living expenses, hotel, food costs etc if
home is not livable
31. Coverage D, coverage limit on an HO3 - ANS-30% of Coverage A
32. Coverage D, coverage limit on an HO4 - ANS-30% of Coverage C
33. Coverage D, coverage limit on an HO6 - ANS-50% of Coverage C
34. Coverage F on a DP policy - ANS-additional living expenses, hotel, food costs etc if
home is not livable. only on a DP2 and DP3
35. Declarations Page - ANS-Part of a policy that identifies the specifics that are unique to
the insured, such as the covered location, and also lists policy limits, period of coverage,
the name of the insurer, and similar information.
36. Deductible - ANS-Portion of the loss that the customer pays out of pocket
37. Depostit Premium/Audit - ANS-When the insurer is not able to place a value for the
insurance they will have the insured pay a deposit premium. During the policy period the
insured will conduct an audit and determine the exact cost of the insurance. If it is less
than the deposit the insured will be refunded if it is more then the insured will be billed.
38. Domestic Insurer - ANS-An insurer doing business in its home state
39. DP-1 - ANS-Basic form, fire, lightning, internal explosion
40. for an additional fee can add the extended coverage perils (WC SHAVER) and
vandalism and malicious mischief
41. Endorsements - ANS-something added to the policy to make it better;
42. Extended Coverage Perils - ANS-Wind, Civil Commotion, Smoke, Hail, Aircraft, Vehicles,
Volcanos, Explosion, Riot WC SHAVVER
43. FAIR plan - ANS-Fair access to insurance requirements plan, an industry placement
facility and a joint reinsurance association, is designed to provide fire and extended
coverage insurance to individuals who cannot get coverage through regular channels
because of increased hazards.
44. FCRA - ANS-Fair Credit Reporting Act, federal law giving consumers the right to view
and correct their credit information
45. Fiduciary capacity - ANS-When the business a person transacts or the money or
property which he handles is not for his own benefit but for another person
46. Agent/producer represents the insurance company
47. flood definition - ANS-overflow of inland or tidal waters, unusual and rapid accumulation,
or runoff of surface waters from any source, or mudflow.
48. flood policy limits - ANS-One to four-family structure $250,000
49. One to four-family home contents $100,000
50. Foreign Insurer - ANS-An insurance company that is incorporated in another state.
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