TEXAS PROPERTY AND CASUALTY

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TEXAS PROPERTY AND CASUALTY

INSURANCE EXAM VERSION 3 WITH 250

REAL EXAM PRACTICE QUESTIONS AND

CORRECT ANSWERS/ ACTUAL TEXAS

PROPERTY & CASUALTY INSURANCE EXAM -

Which organization is considered the insurer of last resort for workers' comp insurance? - ANSWER-Texas Mutual Insurance Company

In Texas, a personal auto policy may be canceled for all of the following except: - ANSWER-insured is 55+

All of the following are grounds for a license application to be denied except:

• intentionally making a material misstatement on the application
• obtaining a license to write controlled business
• conviction of any misdemeanor
• misappropriation of money belonging to an insured - ANSWER-conviction of

any misdemeanor

Which of the following is NOT one of the requirements for a claim to be covered by the Texas P & C insurance guaranty association? - ANSWER-the total amount of the claim does not exceed $500,000

Under Texas workers comp law, lifetime income benefits are paid at what % of the employee's average weekly wage? - ANSWER-75%

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pg. 2 All of the following items are covered under Coverage A of a business owners

policy EXCEPT:

• portable fire extinguishers
• fixtures
• computers and photocopiers
• repairs to building - ANSWER-computers and photocopiers

A property is vacant is described of having an absence of - ANSWER-people and property

Bob has a liability policy in the amount of 300/500/100. How much coverage does he have per occurrence for property damage liability?TH - ANSWER-$100,000

The insurer retains certain rights under the conditions section of a workers' compensation policy. Which of the following is one of those conditions? - ANSWER-The insurer retains the right to inspect the insured's workplace for insurability at any time.

Common exclusions with a liability policy would typically include all of the

following EXCEPT:

• Injuries or damages caused intentionally by the insured
• Damage to property in the insured's care, custody, or control
• Damage to property owned by the insured
• Injuries or damages caused unintentionally by the insured - ANSWER-D

Terrorism Risk Insurance Act of 2002 addresses only a defined category of terrorism losses. To come within the new federal program, an act of terrorism must be certified as such by the Secretary of Treasury and must have all of the following 2 / 4

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characteristics except: - ANSWER-It must produce P & C insurance losses in

excess of $30M

Bob's trucking company contracts with boat companies to haul its boats as well as boat parts. Bob's concerned that he has enough coverage if he is contracted to haul a trailer owned by the boat company. What coverage should be used to provide this coverage? - ANSWER-Trailers in insured's possession

• insurance policies apply to Monica's home. The limit for Policy A is $100,000

and the limit for B is $50,000. Both policies have a pro rata other insurance clause.If she suffers a $9,000 covered loss to her home, how much with A pay? -

ANSWER-$6,000

$100,000/$150,000 = .6666 * $9,000 = $6,000

All of the following are exclusions under liability policy except:

• losses covered by workers' comp laws
• injuries or damages caused unintentionally by the insured
• bodily injury to insured
• bodily injury to an employee - ANSWER-B. injuries or damages caused

unintentionally by the insured

Under Texas Insurance Code, which of the following factors may an insurer use to determine a rate for insurance? - ANSWER-garaging location

The provisions of the Terrorism Risk Insurance Act of 2002 apply to which of the following lines of insurance? - ANSWER-commercial property

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pg. 4 Which of the following events is NOT considered an occurrence for insurance purposes? - ANSWER-wearing out clothing

All of the following are benefits specified by workers' comp laws EXCEPT:

• lost wages
• medical expenses
• retirement plan contributions
• rehabilitation benefits - ANSWER-C. retirement plan contributions

Dennis purchased a small manufacturing firm and wants to purchase coverage for the premises-operations and products-completed operations exposure. Which of the following types of insurance should he purchase? - ANSWER-Commercial general liability

Which is an example of misrepresentation? - ANSWER-an agent leads a buyer of an auto policy to believe that she will be covered when driving others' cars when she won't

If the insured hits a deer while driving his own vehicle, which part of the personal auto policy will pay to repair the vehicle? - ANSWER-other than collision

Which term describes an insured's oral or written statement that becomes part of an insurance contract and can void a policy if they are breached? - ANSWER- warranty

An insurance binder is best described as - ANSWER-temporary, short-term evidence of coverage

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