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TEXAS PERSONAL LINES LICENSING EXAM
Qs and Ans - Expert- Explanation - ing score -25 Questions and Answers
-Format: Multiple-choice / Flashcard
Question 1: Unilateral
Answer:
only enforceable in one direction (i.e. cant force anyone to find dog, but MUST pay if someone finds dog)
Question 2: Speculative Risk
Answer:
Risk with potential for both gain and loss
Question 3: Law of Large Numbers
Answer:
Principle related to the larger the examples of data, the more reliable
Question 4: Exposure
Answer:
an opportunity or possibility for loss
Question 5: Warranty
Answer:
guarantee of a condition, highly variable, usually on commercial policies
Question 6: Which party is the insurer?
Answer:
2nd Party
Question 7: Aleatory
Answer:
complete unequal transfer of value
Question 8: nonrenewal
Answer:
a decision not to continue the policy after the end of the policy term Question 9: What are the contract parts? (Hint: "Cloac")
Answer:
Consideration, Legal Purpose, Offer, Acceptance, Component Parts)
Question 10: Endorsement
Answer:
a document that modifies the insurance policy in some way
Question 11: Pure Risk
Answer:
Risk with no chance of gain or beneficial result
Question 12: What are the contract characteristics?
Answer:
Personal Contract, Conditional Contract, Adhesion, Indemnity, Aleatory, Unilateral, Utmost Good Faith Question 13: What are the 5 parts of the Insurance Policy? (Hint: DICED)
Answer:
Declarations, Insuring Agreement, Conditions, Exclusions, Definitions
Question 14: Which party is the insured?
Answer:
1st Party
Question 15: Subrogation
Answer:
when policyholder transfers their right of recovery to insurance company
Question 16: Representation
Answer:
refers to a statement that the insured believes to be true
Question 17: Underwriting
Answer:
A function that evaluates policyholders to determine eligibility and pricing
Question 18: Assignment section of policy
Answer:
the policy is between me and you, cannot be reassigned to anyone else
Question 19: Concealment
Answer:
hiding a fact that is relevant
Question 20: Misrepresentation
Answer:
lying, saying something you know if false
Question 21: Which Party is the other person involved in the accident?
Answer:
3rd Party
Question 22: Binder
Answer:
temporary insurance coverage issued for a specific period of time
Question 23: Indemnify
Answer:
To make whole again, help make them whole but don't let them profit
Question 24: Risk
Answer:
Chance or potential of financial loss
Question 25: Abandonment
Answer:
idea that you cant "dump" property on the insurance companies and demand payment
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