TEXAS PROPERTY AND CASUALTY PRACTICE EXAM EXAM

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TEXAS PROPERTY AND CASUALTY PRACTICE EXAM EXAM

QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -40 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered?

Answer:

any other state Question 2: A homeowner sells his house to a friend. The friend wants to keep the homeowner's current policy in effect. Under the assignment provision, which of the following is most likely?

Answer:

The homeowner will need to get written consent from the insurer before the policy can be reassigned.Question 3: Coverage under the builders risk form will end in all of the following situations

EXCEPT

Answer:

60 days after the construction has ended Question 4: An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some furniture and clothes in the house. From an insurance standpoint, the insured's house is considered

Answer:

Unoccupied Unoccupancy refers to an insured structure in which no people have been living or working within the

required period of time, but the structure contains contents.Question 5: An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?

Answer:

Material misrepresentation Question 6: Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

Answer:

An employee of a medical facility who suffers from a common cold

Question 7: All of the following are true regarding deposit premium

Answer:

It must be paid in advance.It is an estimated premium paid at the policy issue.It could be adjusted by the audit.Deposit premium is an estimated premium paid in advance at the time the policy is issued that may be adjusted by the audit based on actual exposures.Question 8: When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be

Answer:

The proximate case Question 9: With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT

Answer:

The insured's business income losses due to personal injury.Question 10: The broad theft coverage endorsement on the dwelling form specifies all of the following limitations EXCEPT

Answer:

$1,000 on silverware

Question 11: Which of the following is NOT an essential element of an insurance contract?

Answer:

counteroffer Question 12: Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Answer:

Conditions.Question 13: A premium discount is the term that describes when an insured owes a total standard premium greater than

Answer:

$5,000

Question 14: Which of the following is true regarding the fire department service charge under the builders risk form?

Answer:

it is an additional coverage Question 15: Coverage for water backup or sump pump overflow is excluded from the Dwelling Policy. However, with the purchase of the water backup and sump pump overflow endorsement, coverage for up to $5,000 in loss or damage can be provided for an additional premium. What is the deductible associated with this coverage?

Answer:

$250 Coverage for up to $5,000 in loss or damage, subject to a $250 deductible, can be provided for an additional premium with this endorsement.Question 16: What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Answer:

Concealment

Question 17: Crime insurance is usually written on the basis of

Answer:

All-Risk

Question 18: Which of the following is an additional coverage that is covered by the broad causes of loss form?

Answer:

collapse Question 19: The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is

Answer:

Considered uninsured Question 20: To purchase insurance, the policyowner must have financial interest in the property being insured. This is known as

Answer:

Insurable Interest The insured must have an insurable interest in the person or property covered by an insurance policy. In property insurance, this means the insured would incur a financial loss if the insured property was damaged.Question 21: An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for?

Answer:

80% of the property's replacement cost or more The coinsurance clause states that in consideration of a reduced rate, the insured agrees to maintain a certain minimum amount of insurance on the insured property. In the event of a covered loss, insurance is designed to pay replacement cost minus depreciation.Question 22: Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Answer:

Warranty

Question 23: #28.

When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of

Answer:

concealment