Texas General Lines Property and Casualty (P&C) Agent Practice Exam

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• Which homeowners form is most commonly used to insure the building and contents of an owner-occupied residence?
• Which statement best reflects motor vehicle liability exclusions in a standard homeowners policy?
• What term is used for agents who represent a single insurer or a group of insurers under similar management?
• The key point of surplus lines is that an eligible surplus lines insurer may provide coverage only in what amount relative to authorized insurers?
• What is the maximum flood coverage limit for a typical 1-4 family residential building under NFIP standard program?
• Which statement correctly defines a party wall?
• What does the pairs, sets, or parts provision do in a commercial inland marine policy?
• In an independent agency system, who retains ownership, use, and control of policy records?
• Which statement about trip transit policies is true?
• Which term denotes a destructive event that insurance guards against?
• Which endorsement provides personal injury coverage for non-bodily injuries such as libel or slander?
• Which of the following is included in insured location?
• What does 'agreed value' represent in ocean marine insurance?
• What does 'expected or intended injury' exclusion mean?
• Which homeowners form is designed for older homes where replacement cost may exceed market value?
• A personal umbrella policy covers liability claims arising from which of the following?
• Liability insurance protects against claims alleging that the insured is responsible for what?
• What does the restoration of limits provision do after a loss?
• What do supplementary payments under BOP liability cover?
• Properties located in Special Flood Hazard Areas (SFHA) have what annual flood risk?
• In the regular NFIP program, what is the lower-cost policy option called?
• Medical Payments Coverage (Part B) in PAP provides which of the following?
• Which is an example of a morale hazard?
• Which statement correctly describes a limit of coverage in BOP liability?
• Which organization offers the ISO Commercial Lines Insurance Programs?
• If a licensee fails to carry out actions required under sanctions, what action can the Commissioner take?
• Which crime peril covers property that disappeared from a known place and is probably stolen?
• An eligible surplus lines insurer must meet eligibility requirements at which times?
• Actual Cash Value (ACV) is defined as:
• Subrogation refers to which insurer action?
• Under the windstorm or hail peril, interior damage from rain is excluded unless what happens first?
• Dwelling policy covers which of the following?
• Which are the three parts of a Personal Auto Policy (PAP)?
• The property owner's duty of care toward a licensee is which of the following compared to an invitee?
• Which federal program insures bank deposits?
• Debris removal coverage provides up to what limit?
• Which fragile item is covered for breakage under a BOP?
• If the vessel suffers a total loss, how is the premium treated?
• In the provided example, which loss is covered by the utility services direct damage endorsement?
• Constructive total loss occurs when ...
• Coverage F pays for an injured party's medical care regardless of insured's liability. This describes which coverage?
• Is sharing commissions between licensed agents allowed in referral arrangements where both parties are licensed?
• Which statement correctly describes yacht policies relative to watercraft policies?
• Which scenario is listed as an earth movement exclusion?
• In the Personal Auto Policy, when the insurer wants to cancel during the first 60 days for a reason other than nonpayment, what notice is required?
• If the insurer and named insured cannot agree on the amount of loss payment, which process can be invoked?
• In Texas, what must insurers do to policyholders regarding terrorism charges?
• Which loss settlement method applies to single-family dwellings under the dwelling form?
• In a stated amount policy, which option is not one of the three amounts used to determine payment if the property is damaged?
• Which peril is added in the broader form but not in the basic form?
• Which type of insurer is not required to join the Texas Property and Casualty Insurance Guaranty Association?
• What term describes deliberate withholding of material facts in an insurance context?
• Under which circumstances may an insurer void a contract?
• Under the Terrorism Insurance Program, what portion of insured losses beyond the insurer's deductible is paid by the federal government?
• In an insurer-producer relationship, who is the principal?
• Coverage F unscheduled farm personal property is divided into two coverage categories. What are they?
• What does a deposit premium reflect and how is it handled?
• Which scenario supports an emergency cease and desist order issued by the Commissioner?
• Express authority is explicitly stated in the insurer's agency agreement. Which term describes this type of authority?
• Which valuation method measures the cost to repair or replace damaged building with common construction materials that are functionally equivalent to obsolete or custom materials?
• Defamation of an insurer involves what action?
• What is an aleatory contract in the context of insurance?
• What options does an insurer have upon receipt of a completed application?
• When is a certificate of insurance commonly required?
• What are the general size eligibility limits for a business to qualify for BOP?
• Under BOP, who is considered an insured if the named insured is a partnership?
• Difference-in-Conditions (D-I-C) policies are typically used to obtain coverage for which type of perils?
• Who may solicit or receive insurance applications in Texas?
• Under the NFIP standard program, deductibles for residential buildings and contents range from which amounts?
• Builders Risk Coverage Form protects which of the following?
• Which type of liability is NOT included in the liability policy categories described?
• Which of the following is a typical specified cause of loss listed in BOP's property coverage?
• What is one key advantage of the Special Causes of Loss form?
• Under Coverage G, which item is included as part of described buildings or structures?
• Which of the following is one of the four property-only conditions that apply to BOP coverage?
• What is the annual cap on the federal government's obligation under the Terrorism Insurance Program?
• Under Farm Property policy, which structure is not considered a dwelling?
• Which item is NOT covered under the building and personal property coverage form?
• Which option best describes a typical concern addressed by Commercial Property Conditions?
• Under Coverage A (Dwelling), which of the following is included?
• The law of large numbers helps actuaries to:
• Mutual insurance companies are owned by:
• Which scenario best illustrates vicarious liability?
• What is the sublimit for jewelry, watches, furs, and gems under Coverage C?
• In functional replacement cost, if a plaster wall is damaged, it could be replaced with wallboard to maintain function. Is this allowed?
• If no hearing is requested, an emergency cease and desist order becomes final after how many days?
• The Texas Department of Insurance (TDI) examination frequency: at least once every how many years?
• Which act extends LHWCA benefits to workers on offshore installations?
• County mutuals are characterized by:
• To become a licensed agent in Texas, which of the following is explicitly required?
• Which statement about inland marine floaters is true?
• What length defines a yacht for insurance purposes?
• Risk retention is generally better for which type of losses?
• Under HO 3, which component is insured on an open perils basis?
• The homeowners policy only covers losses that occur or begin during which time frame?
• What is the minimum total continuing education hours required for a Texas life and health license renewal in a two-year cycle?
• In the independent agency system, which of the following is true about independent agents?
• Which peril is covered only by broad form and not by basic form?
• Strict (absolute) liability is imposed when:
• Which program makes flood coverage available for residential and commercial buildings and personal property?
• In ordinance or law coverage CP 04 05, which coverage pays for loss to the undamaged portion of the building?
• Which term describes an insurer domiciled outside the United States?
• License expiration and renewal: when do licenses expire?
• Which exclusion is characteristic of BOP liability exclusions?
• DP-2 Broad Form valuation for personal property is based on what?
• Which statement best describes how payments are made under property and liability lines of a policy?
• Which is not a component of the risk management process?
• Which is true about the personal injury endorsement HO 24 82?
• A person who acts as a subagent for a licensed property and casualty agent must be licensed if they solicit and bind insurance risks for that agent.
• An association captive is owned by
• What is the National Council of Insurance Legislators (NCOIL) composed of, and how does it relate to NAIC?
• Which description best captures personal inland marine insurance?
• A captive insurance company owned by a single parent organization is called a
• Which item is typically considered an insured location under a homeowners policy?
• What does the broad evidence rule involve in valuing insured property?
• Which item is NOT a standard underwriting risk analysis resource?
• Loss assessment coverage under Section II pays up to what amount per occurrence?
• Why is nonconcurrency often considered problematic when an umbrella policy and a liability policy are in place?
• Which entity regulates surplus lines insurance transactions in Texas?
• In underwriting, after the underwriting decision is made, what is the next step?
• Which type of property is commonly subject to sublimits within a property policy?
• Which condition allows a nonresident Texas license applicant to be exempt from examination, continuing education, and criminal history report requirements when applying for a comparable Texas license?
• Which best describes an occurrence?
• Insurable interest must exist at what time?
• TX Windstorm Insurance Association serves as the insurer of last resort for wind and hail coverage in which areas?
• All volcanic eruptions that occur within a certain period are considered one event. What is that period?
• A deductible average clause excludes partial losses amounting to less than what percent?
• Which duties require an insurance service representative license?
• Superior construction category includes which description?
• An agent must notify the Texas Department of Insurance (TDI) within 30 days of a change in which item?
• Insurance regulation in the United States is predominantly performed by:
• To receive a surplus lines license, a person must first be licensed as which of the following?
• Which losses are excluded by the nuclear hazard clause in a homeowners policy?
• When recovered property after a claim is returned, what may the insurer do?
• Under Texas Special Provisions for Homeowners, claim deadlines are extended by how many days if the claim results from a weather-related catastrophe?
• Which statement about power surges under BOP is true?
• Replacement cost is defined as the cost to replace damaged property with new property without deduction for depreciation.
• How are aircraft liability, hovercraft liability, motor vehicle liability, and watercraft liability treated under the policy?
• Which of the following is true about nonresident license applicants in Texas?
• Which entity regulates Texas' insurance industry, develops rules, enforces laws, and monitors financial condition of insurers?
• Under the causes of loss form, which item is treated as a Special Form coverage item?
• What is the formula for the combined ratio?
• Which statement about binders is true?
• What types of coverage can the Windstorm Insurance Association issue on residential property?
• Which statement about Personal Articles Floater forms is true?
• DP-1 Basic Form covers which type of perils?
• During an examination, what power may TDI exercise?
• Which coverage of the CGL provides bodily injury and property damage liability?
• What does class rating imply?
• Which statement about the named insured is true?
• Market value is primarily used to value which type of property?
• If notice of nonrenewal is delivered later than 60 days before expiration, coverage remains in effect until which date?
• What is required from the insured after an occurrence under 'duties after occurrence'?
• Which term refers to an unwelcomed or unplanned reduction in economic value?
• Commercial Property Conditions CP 00 90 applies to which policies?
• Which information is typically included on the declarations page of a policy?
• Which of the following is NOT one of NFIP's standard coverage forms?
• A single-family home rented to a tenant is often ineligible for a homeowners policy; which policy is typically purchased?
• Under Section II, damage to others' property has exclusions. Which scenario triggers an exclusion?
• In underwriting, what is the second step after agency underwriting?
• The earthquakes endorsement provides coverage for which items, and what is excluded?
• What is the standard limit for electronic data coverage under BOP?
• Which of the following is a non-ISO commercial inland marine coverage form?
• If the insured keeps recovered property, how is the loss payment adjusted?
• Bailees' customers floater provides coverage for property while it is in whose custody?
• Which party is commonly considered a secondary insurable interest requiring inclusion on a policy?
• Underwriting in insurance is the process of...
• Which of the following best defines bodily injury?
• What statement must every fire insurance policy include regarding total loss by fire?
• Preservation of property coverage applies during a move and for up to how many days at the new location?
• When canceling, a written reason must be provided. Which item must be included?
• What best describes an agency underwriter?
• Which term describes giving up a right through actions or failure to enforce a right?
• Which form provides open peril coverage for dwelling and personal property?
• Under PAP, the loss payment is the lesser of which amounts?
• If an insurer is found to have engaged in improper market conduct, it may face:
• Which items are included as an insured contract under BOP's contractual liability exclusion?
• Which of the following is required to obtain a risk manager license?
• Policy conditions describe the rules for what, including duties after a loss and how claims are paid?
• Which endorsement provides automatic increase in dwelling coverage by a fixed percentage?
• What is an exposure in insurance terms?
• BOP business personal property coverage protects property located where?
• Which statement best describes nonrenewal in a homeowners policy?
• Which statement accurately describes the Electronic Data Processing Floater?
• In Texas, an insurer domiciled in Ohio and admitted to do business in Texas is considered what in Texas?
• Suitability of recommended products requires that:
• Under McCarran-Ferguson Act of 1945, insurance is regulated primarily at which level?
• A binder provides insurance coverage pending the issuance of the original policy that will be issued within how many days?
• Under vandalism, which loss is excluded, with an exception for a specific type of damage?
• What rights does the mortgage clause grant to the mortgagee?
• With whom does the insurer normally adjust the loss payment unless another party is named to receive payment?
• If the insurer elects to repair or replace rather than pay, within how many days after receipt of the insured's proof of loss must the insurer provide written notice?
• Which of the following best describes competent parties for an insurance contract?
• What are the two liability coverages in Section II?
• In addition to the three essential parts, which items may be included?
• What is the unit of exposure for payroll in workers' compensation insurance?
• Under contributory negligence, if the plaintiff is responsible to any degree for the injury, what happens to their claim?
• Rescission in insurance is characterized as?
• Leakage or seepage exclusion applies to water leaking from which systems?
• Nonrenewal notice must be given at least how many days in advance?
• Which peril is commonly excluded from property insurance policies?
• Under a homeowners policy, who qualifies as insured?
• Who typically makes the initial offer in an insurance contract?
• Under ISO commercial inland marine conditions, covered property is valued at the smallest of which amounts?
• Embezzlement is defined as which?
• Admitted insurer means
• Under a garage policy, which statement correctly describes coverage for drivers using Starr-owned, hired, or borrowed autos?
• Temporary license: which statement is true?
• Punitive damages are amounts a defendant is required to pay as punishment for committing a civil wrong in order to?
• Which of the following is NOT a characteristic of an insurable risk?
• For recordkeeping, producers must retain certificates of course completion for how long?
• Reinsurance helps insurers
• To keep the surplus lines license active, the agent must maintain it as a General Property and Casualty Agent or Managing General Agent.
• Maintenance or wear and tear exclusions are used because they relate to what kind of losses?
• When does an agent's appointment to act as an agent remain in effect?
• Which item is a major module commonly used in all policies?
• Which of the following is NOT listed as a permissible penalty for violating the insurance code or an order of the Commissioner?
• The power outage coverage option in spoilage coverage is described as which of the following?
• Cargo and freight insurance covers goods in what transit mode?
• Residential community property language ensures that coverage remains in force for each spouse's interest despite divorce or change of ownership unless excluded by endorsement. This statement is
• Which form code corresponds to the Broad Causes of Loss Form?
• Which statement best describes the role of state insurance regulators regarding producers?
• Retrospective rating is what?
• Which approach does an experienced underwriter use to set a rate when there is no established rating method?
• Legal liability coverage form insures property in whose care, custody, or control?
• If TDI asks for information about an insurer's financial condition, by how many days must the insurer/agent reply in writing?
• A pattern of misrepresentations by an agent can lead to which consequences?
• Which factor is the key determinant in workers' compensation premium rates?
• Reciprocal insurers are:
• Which of the following is an exclusion listed under common causes of loss exclusions?
• Which item is included as a covered item under Coverage G?
• Within how many days must a person report a fraudulent insurance act to TDI or other authorized agency?
• During the policy term, which of the following is NOT listed as a valid reason for cancellation?
• The Motor Carrier Act requires motor carriers to have minimum liability limits in which range?
• More exposure units lead to which effect on premiums?
• In the example where an earthquake breaks a gas main that leads to a fire, which event is the proximate cause of the loss?
• Under the homeowners form, replacement cost coverage for buildings with no depreciation is provided if the insured buys a limit at least what percent of the building's ACV?
• Spoilage endorsement CP 04 40: which option covers spoilage caused by failure of refrigeration equipment or contaminated refrigerant?
• Which of the following is a type of E&O insurance?
• Which statement best defines misrepresentation in the insurance practice context?
• What is the purpose of loss history data in underwriting?
• Coverage C (Personal Property) provides coverage for personal items. What is the limit for money and related items under Coverage C?
• Which of the following is an example of a moral hazard?
• Under basic and broad forms, which peril involves damage caused by a vehicle owned or operated by the insured?
• What does the protective safeguards endorsement require of the insured?
• Corporation or partnership must notify the department within 30 days of felony conviction of which individuals?
• Electronic data coverage has an annual aggregate limit up to how much?
• Indirect losses include which example?
• Which endorsement adds coverage for business property, income, and liability for a home-based business with certain limits?
• Which homeowners form is intended for owners of condominiums and includes limited dwelling coverage for improvements?
• When the 80 percent rule is satisfied, the dwelling's replacement cost coverage is provided with no deduction for depreciation. True or false?
• Under pro rata coordination, if Policy A provides $100,000 and Policy B provides $50,000 of primary coverage for a $75,000 loss, how much does each pay?
• A Business Auto Policy (BAP) is typically part of what type of policy structure?
• Temporary total disability benefits are typically expressed as what percentage of the worker's weekly wages?
• Which federal act provides no-fault workers' compensation benefits to maritime employees for duties such as loading and unloading a vessel?
• Robbery is defined as which of the following?
• Texas regulation requires most insurers and related businesses to be licensed before selling their products. The Department of Insurance licenses which entities in Texas?
• Which program is typically administered by state governments and provides unemployment benefits?
• Under DP-3, how is personal property valued?
• Which activity would fall under TDI's Insurance Fraud Unit investigations?
• In a policy with a 90% coinsurance clause, a building ACV is $1,000,000, insured limit is $800,000, deductible is $500, and a loss of $100,000 occurs. What is the approximate payout?
• What does utmost good faith require in insurance contracts?
• Under automatic termination, when does coverage end if the named insured chooses not to renew?
• Which statement best describes the abandonment provision in property/c casualty insurance?
• Part of premises occasionally rented to an insured (not for business purposes) is included in insured location?
• What triggers the coinsurance penalty in business income coverage?
• Which of the following is a common defense to negligence based on the plaintiff's conduct?
• Errors and omissions insurance protects against liability for what?
• To be insurable as a NFIP building, which of the following is NOT a requirement?
• Under a BOP, rain or snow damage to the interior of a building is not covered unless the damage is caused by thawing snow or ice on the building and the roof or walls were first damaged by a covered cause.
• Which description matches a monopolistic state fund for workers' compensation?
• A producer's responsibilities to applicants include disclosing all information, not misrepresenting terms, making suitable recommendations, submitting applications to financially sound companies, and delivering the policy as intended. Which of the following is a producer responsibility?
• Which construction type has the greatest fire risk and is charged a higher fire insurance premium than masonry veneer or solid masonry buildings?
• Holders of limited lines and county mutuals licenses must complete how many CE hours every two years, with how many ethics hours and self-study allowances?
• Under a dwelling policy, who is insured when the policy includes Coverage A (dwelling)?
• Which is considered an unfair claim settlement practice?
• Which statement about nonresident licenses is true?
• Emergency license duration: true statement?
• If an agent's appointment is terminated for cause, who is required to file a statement with TDI?
• Under comparative negligence, how is the plaintiff's recovery determined?
• Which statement accurately describes an employee under the policy terms?
• Implied authority in an insurer-producer relationship refers to authority that:
• Which statement best describes a package policy?
• Which term describes a policy that is a single document containing all agreements between the insurer and the insured?
• Which elements are commonly included in every property or casualty policy as core provisions?
• The Commercial Articles Floater insures which of the following?
• Which valuation method is specifically an exception to indemnity contracts and is commonly referred to as an agreed value?
• In reinsurance, the insurer that seeks to transfer risk is called the
• Umbrella coverage stacks on top of which primary liability policies?
• Who must approve policy forms and rates used by the FAIR Plan?
• The standard ISO commercial property policy has three essential parts. Which trio are these parts?
• To whom may the insurer pay proceeds under a loss payable clause?
• Given earned premiums $100 million and incurred losses $70 million, what is the loss ratio?
• What is the maximum expense amount and deductible under the identity fraud expense coverage?
• For NFIP contents eligibility, where must contents be located?
• Which statement about earned and unearned premium is correct?
• What does the tort threshold describe in compulsory no-fault states?
• Under a boatowners policy, which statement best describes the scope of personal liability coverage?
• In premium calculation, what is the formula for the insured's premium payable to the insurer?
• Which expenses are included in 'medical expenses' under Coverage F?
• Under Coverage B (Other Structures) of a Homeowners policy, which structure would NOT be covered?
• If an agent moves from one state to another, within how many days must they notify TDI and provide proof of authorization to continue as a nonresident agent?
• Insurable interest limits losses to the amount of the insured's interest at the time of loss. True or False?
• Which endorsement allows settling losses to most personal property on a replacement cost basis rather than actual cash value?
• Which item is not covered under Coverage C?
• Which is included in the insured location when the policy references insured location?
• An individual who has continuously held a Texas insurance license for at least 20 years is exempt from continuing education. True or False?
• Which statement best defines fraud in the insurance context?
• Coverage forms describe which of the following elements?
• Under farm livestock coverage, which is not a factor in the per-animal limit?
• What defines a contract of adhesion in insurance?
• Stock insurance companies are owned by:
• Under NFIP, if a structure has suffered two flood losses paid by the NFIP within a 10-year period, the cost of each repair must equal or exceed what percent of the market value for increased cost of compliance coverage to apply?
• Does the Personal Auto Policy provide a grace period for payment of the premium?
• Medical Payments to Others coverage in a homeowners policy pays for which expenses and within what time frame?
• What must a community do for residents to be eligible for NFIP flood coverage?
• What is the purpose of the Terrorism Insurance Program enacted after 9/11?
• What is the limit for pollutant cleanup and removal under BOP, when caused by a covered peril?
• What does Other-Than-Collision (OTC) coverage provide?
• Under the one agent, one license rule, agents cannot hold more than how many licenses of the same type?
• D-I-C policies are frequently issued by which type of insurers?
• Cancellation during the policy term may occur if the insurer is placed in supervision, conservatorship, or receivership and the cancellation or nonrenewal is approved by whom?
• An insurance company domiciled in Canada is an alien insurer in every US state where it is admitted to do business.
• Which of the following is one of the two types of insurable property in property insurance?
• The insured location includes parts of premises used by the named insured in connection with insured locations. Which statement is true?
• Under open perils coverage for a loss involving multiple proximate causes, when is the loss covered?
• Which description matches the direct marketing system?
• Which item is an NFIP general exclusion?
• Under the false pretenses or voluntary parting exclusion, when is property not covered?
• Under the attractive nuisance doctrine, a party may be held liable for maintaining something on its property that appeals to curious children. Which example most clearly illustrates this?
• What does Coverage H (bodily injury and property damage) insure?
• What is the proximate cause of loss?
• What constitutes consideration in an insurance contract?
• Duties after loss include which of the following?
• Under NFIP, the coinsurance provision is the lesser of which two amounts?
• State regulators monitor for misrepresentation, deceptive or false advertising, or unfair discrimination. Which statement best describes regulators' role regarding this conduct?
• What is a deductible in a property insurance policy?
• Which of the following is NOT a producer responsibility?
• Self-insurance groups are formed by smaller companies to provide workers' compensation, often described as 'shared risk groups.' What is their purpose?
• When maintaining complaint records, which details must be included?
• Which four elements must a plaintiff prove to establish negligence?
• Within how many days must a surplus lines agency notify the Department of the name and license number of each agent it hires?
• How must the FAIR Plan write policies?
• Flood coverage under CP 10 65 applies to property coverage when a flood limit is indicated where?
• Under a garagekeepers coverage, who has the right to control the defense and settlement of covered claims?
• Which statement best distinguishes peril from hazard?
• What does a per person liability limit specify?
• By December 31 each year, TDI computes reinsurance reserves for all risks that an authorized insurer is covering in Texas. Which lines are exempt from this requirement?
• Independent agents represent:
• Which item is described by a motor vehicle record (MVR)?
• In a boatowners policy, which component provides protection for physical damage to the hull, motors, and trailer?
• Fire resistive construction is characterized by exterior walls, floors, and roof made of what?
• Which section provides debris removal and reasonable repair costs after a covered peril?
• Burglary is defined as which of the following?
• Which item is an exclusion in DP-3?
• Which DP form provides open perils coverage for the dwelling and other structures?
• How is the loss ratio calculated?
• After how many consecutive days of vacancy does coverage for losses from vandalism, sprinkler leakage, building glass breakage, theft, and attempted theft typically become void?
• What does the reasonable expectations doctrine allow a court to do?
• The 80 Percent Rule is a form of what insurance concept?
• Under the policy, what constitutes engaging in a business?
• Which are the three categories of liability coverages provided in the BOP?
• What is the purpose of voluntarily depositing funds with TDI?
• When is the Personal Injury Protection (PIP) Endorsement added to a PAP?
• Which of the following is included in a liability insurance policy?
• Damages in civil cases are classified into which two categories?
• What does subrogation mean in the context of PAP?
• Theft is defined as which of the following?
• Uninsured watercraft coverage in a boatowners policy is designed to compensate for what?
• Which term describes a policy built as a matched set of components designed around one basic component, such as definitions and conditions, that coordinate with other documents?
• Under equal shares contribution, with Policy A providing $100,000 and Policy B providing $50,000, how much would each policy pay for a $75,000 loss?
• When is a valued contract typically used in property insurance?
• Which duty is performed by the Texas Insurance Commissioner?
• Most NFIP policies are issued by private insurers participating in which program?
• Adverse selection occurs when...
• Under what circumstances may the Texas Department of Insurance extend CE compliance time for a licensee?
• Experience rating modifies workers' compensation premiums based on which factor?
• Pollutant cleanup and removal coverage limit is up to how much?
• Underwriting helps prevent adverse selection by:
• Under TX Special Provisions HO 01 42, jewelry losses are settled at what basis?
• In an appraisal clause, if the insured and insurer disagree on value after a covered loss, how is the loss value determined?
• Sinkhole collapse coverage excludes damage resulting from which scenario?
• Under Coverage E, which item is included property?
• Which statement describes a managing underwriter in surplus lines?
• Risk sharing is typically demonstrated by:
• Which duty is required of the insured after a property loss occurred?
• Which item is NOT covered under BOP business personal property coverage?
• What is the limit for fire department service changes under the building and personal property coverage form?
• In an open perils policy, losses are covered from which of the following?
• Which statement correctly defines subrogation in insurance context?
• General average losses involve which sharing?
• Which homeowners form is designed for tenants and provides personal property on a named-perils basis?
• Self-insurers are businesses that are financially able to self fund certain risks by setting aside funds to pay claims. Which description best fits self-insurers?
• Why might an underwriter request a credit report?
• Proof of loss must be provided within how many days after the insurer requests it?
• In advertising, when is a comparison considered unfair?
• What is the role of the National Association of Insurance Commissioners (NAIC)?
• Which item is a peril of the sea (natural forces)?
• Unauthorized insurers are entities that
• FELA provides workers' compensation benefits to employees of which industry?
• Which statement best describes property damage?
• Which of the following is a basic form covered peril?
• Which of the following is NOT a primary regulatory activity of state insurance departments?
• Vacancy or unoccupancy provisions reduce or eliminate coverage after the premises have been vacant/unoccupied for approximately how many days?
• Flood coverage under the CP 10 65 endorsement defines flood as a general, partial, or complete submersion of normally dry land caused by which events?
• Premium discounts are described as which of the following?
• Emergency license without examination: when may it be issued?
• The Condominium Commercial Unit-Owners Coverage Form is designed for owners of what type of property and what does it cover?
• Which activity constitutes false financial statements in the insurance context?
• Within how many days must the insured provide sworn proof of loss to the insurer after a request?
• Which hazard relates to the legal or regulatory environment affecting an insurer?
• How does the policy treat watercraft liability?
• Medical Payments coverage pays reasonable medical expenses incurred within how many years of an accident?
• Which statement correctly contrasts the final steps in property claims versus liability claims?
• When does BOP's peak season coverage apply to increase the business personal property limit by 25%?
• Market conduct examinations determine whether an insurer has followed state laws about:
• Which statement describes membership in the TX Windstorm Insurance Association?
• In a PAP, what defines Your Covered Auto?
• Which statement is true about FAIR Plan participation?
• Renewal timing and fees: if renewal is filed on time, which statement is correct?
• Earned premium for coverage extending beyond expiration must be computed how?
• Which activity requires licensing as a surplus lines agent?
• Which of the following is an additional coverage under homeowners policy?
• What action is available to an insurer after paying a total loss to covered property?
• To obtain replacement cost coverage on the dwelling with no depreciation, the insured must carry a dwelling limit of at least what percent of the building's actual cash value?
• Which statement best describes the liability insurer’s duty to defend?
• Under HO3 exclusions, ordinance or law affects coverage by which of the following?
• Nonconcurrency refers to policy periods not aligning. What is a key risk of nonconcurrency?
• Duty of care can be established by which of the following?
• What is required for Joint Underwriting Associations to operate in Texas?
• Which endorsement narrows coverage for incidental business activities conducted at a residence?
• What is the primary purpose of a Commercial General Liability policy?
• Controlled business: what minimum percentage of the agent's total premium volume must come from persons other than the agent or their family to be considered non-controlling?
• What is required of insurers regarding complaint records?
• Proximate causation requires a relatively short chain of events leading to natural, probable, or foreseeable consequences.
• Replacement cost is described as the cost to replace damaged or destroyed property with new property at current prices, without deduction for depreciation.
• How does the inflation guard increase building coverage under BOP?
• What is the standard annual aggregate limit for interruption of computer operations under BOP?
• Under TRIA, which lines of coverage are covered for acts of terrorism?
• The common policy declarations contain information such as:
• When the Commissioner intends to penalize a licensee for violating the insurance code, the hearing may be scheduled not earlier than how many days after notice?
• In masonry noncombustible construction, exterior walls are masonry while floors and roof are made of what?
• PAP's liability coverage primarily does what?
• Flood-related property losses are not covered under residential and commercial property policies but are generally covered under which types of policies?
• What is the experience modifier?
• The exclusive agency system is characterized by:
• Which statement describes risk avoidance?
• Which statement best defines a permissive user under a Business Auto Policy?
• What is the purpose of Uninsured/Underinsured Motorist Coverage?
• Under the Condominium Association Coverage Form, which statement is true?
• Which coverages have no deductible under BOP?
• Flood damage is typically excluded from standard property policies; flood insurance is primarily available through which program?
• How does specific or scheduled coverage differ from blanket coverage?
• Courts determine whether insurance laws are constitutional and interpret policy provisions; their decisions establish how policies are interpreted. Which entity does this?
• What is typically required for a resident insurance license?
• How is the insurance premium determined?
• Under contributory negligence in workers' compensation, if the employee's negligence contributes to their injury, are they entitled to compensation?
• Which items are commonly covered on open peril coverage under inland marine personal articles floater?
• Which limitation applies to missing property under a BOP?
• A surplus lines broker is best described as someone who:
• Which practice is generally prohibited as a rebate in insurance transactions?
• What action does TDI take after receiving a written complaint?
• Under the Emergency Flood Insurance Program, which properties become eligible and at what rates?
• A surplus lines agent doing business as an individual may be licensed only in their name; how many surplus lines agent licenses may they hold?
• Which regulatory activity ensures that policy forms and rates are approved before use?
• Which is a benefit of Coverage D (Loss of Use)?
• Apparent authority arises when the insurer's actions or inactions lead third parties to believe the producer has authority. Which option best describes this?
• Actual total loss is defined as what?
• What is the time limit to sue the insurer after a loss, assuming policy terms are met?
• How do primary and excess insurance policies coordinate when multiple coverages apply to the same loss?
• In a split limits policy, which two limits are typically used?
• Under Coverage E, what happens if a claim is made or lawsuit for bodily injury or property damage caused by an insured occurrence?
• BOP building coverage on a replacement cost basis includes which of the following?
• If any insured intentionally conceals or misrepresents any material fact related to the homeowners policy, what happens?
• What are the two business income coverage forms described?
• In an ISO Businessowners Policy, which section contains common policy conditions?
• In property and casualty insurance, when is the initial premium payment not strictly required for the contract to be enforceable?
• Property and casualty policies generally exclude losses due to which hazard?
• To qualify for marine insurance coverage, property must be in transit or bear some relationship to transportation or communication. Which of the following is excluded from marine coverage?
• Which federal agency administers the NFIP?
• The Jones Act allows seamen to seek negligence remedies without having to overcome which defenses?
• Which statement about the expense ratio is true?
• Medical expenses coverage under BOP is payable for expenses incurred and reported within what timeframe?
• Which of the following best describes how rates are developed in property and casualty insurance when no established rating method exists?
• In partial losses, who bears the loss?
• Which construction type is susceptible to earth movement damage, leading to higher earthquake insurance premiums?
• Which category has explicit permission to be on the owner's premises?
• Under an open perils policy, the burden of proof to show a loss was caused by an excluded peril rests with whom when the insurer seeks to deny a claim?
• Which type of insurance does a personal lines agent primarily write?
• What is the FAIR Plan in Texas designed to do?
• Which statement best describes the purpose of reinsurance?
• Loss payments for fences, corrals, and related items under Coverage G are payable in proportion to what?
• Basic causes of loss for farm property include which peril to livestock?
• Which act requires insurers to inform applicants in advance that a credit report might be ordered?
• Which two categories define covered perils in property insurance?
• NFIP flood policy provides up to how much coverage for increased cost of compliance?
• Ocean marine hull insurance primarily protects against losses to what?
• General damages are monetary awards designed to compensate an injured person for their what?
• What is the key difference between the agreed value and stated amount forms?
• The Residential Condominium Building Association Policy (RCBAP) form is available only in NFIP regular programs and provides building coverage for what condition?
• Which of the following is an example of a speculative risk?
• Which vehicle qualifies as a nonowned auto under PAP?
• What does the watercraft endorsement typically provide?
• Which statement best describes morale hazard?
• Scheduled Personal Property TX HO 23 03 provides a separate schedule of insurance for what?
• If the loss is also covered by a service agreement or home warranty, when does the homeowners policy pay?
• What must a certificate of authority specify?
• False advertising in insurance refers to which of the following?
• Under a Business Auto Policy, what condition must be met for a permissive user to be covered?
• Exclusive agents, also known as captive agents, typically represent:
• Direct loss is best defined as which of the following?
• Which scenario constitutes boycott, coercion, or intimidation in the insurance field?
• Which topic is addressed under the BOP's common policy conditions?
• Is there a grace period after CE expiration in Texas?
• Which risk is typically excluded as an insurable risk?
• The liquidated demand clause applies to personal property.
• Which peril is included in the Special Causes of Loss form but not in Basic or Broad?
• What does a general aggregate limit apply to in a liability policy?
• Under BOP, which statement about computers and electronic data is accurate?
• Temporary coverage for loss to newly acquired buildings is up to what per building?
• If the Commissioner finds violations related to complaint handling, what actions may be taken?
• Civil authority coverage under Coverage D provides coverage when civil authorities prohibit using the insured's residence due to damage in the neighborhood. True or False?
• In advertising, which action is considered an unfair comparison?
• Which statement correctly describes when an arbitration agreement is valid and enforceable?
• A surplus lines agent's license is valid for how many years?
• In a no-fault auto insurance state, how are damages typically recovered for an injured insured?
• How do misrepresentation and representation differ in contract formation?
• What does a per occurrence liability limit specify?
• Masonry veneer is defined as a combustible frame and interior walls with what outside layer?
• Coverage I covers personal and advertising injury. Which of the following is an example of personal injury?
• Which restriction is part of the Home Day Care endorsement HO 04 97?
• Risk retention groups provide coverage for all types of liability risks except
• In an indemnity contract, how is the benefit generally determined?
• In a personal contract, who does the insurer intend to protect?
• What is the purpose of the underwriting process?
• Risk prevention is primarily about:
• Does BOP provide liquor liability coverage for insureds who host events where alcohol is provided?
• If the insured abandons damaged property, what is the insurer's duty?
• Garagekeepers coverage provides coverage for loss to customers' autos while in the insured's care, custody, or control, but only if the insured is legally liable.
• In policy definitions, what do the terms 'we', 'us', and 'our' refer to?
• Which item is included as Covered Building Property (Coverage A) under NFIP?
• Which of the following properties is eligible under NFIP General Property Form when seeking building and contents coverage?
• Independent agents who represent multiple insurers are often referred to as:
• Breach of the duty of care is a failure to exercise care or to act as a reasonable person would act.
• The nonrenewal provision requires the insurer to notify the named insured at least how many days before policy expiration if it intends to nonrenew?
• Which events are typically conditions of a conditional insurance contract?
• Which statement best reflects concurrent causation in open perils coverage?
• What does risk transfer mean in the context of insurance?
• Purchasing groups exist to
• Immunity from liability for providing information about a suspected fraudulent insurance act is lost if the person acted with
• Which homeowners form provides dwelling, other structures, and personal property on an open-perils basis?
• What is the standard limit for fire department service charges under BOP?
• Which coverage in the homeowners policy pays for additional living expenses if the home is uninhabitable due to a covered loss?
• E&O insurance protects producers from liability arising from professional services but does not shield willful misconduct. Which statement is true?
• Which federal act prohibits deceptive or unfair trade practices?
• What are the three categories of covered property under the building and personal property coverage form?
• Which of the following is excluded under water damage/water exclusion in HO3?
• If the policy is canceled or nonrenewed, who must be notified in writing?
• What is the primary purpose of the National Flood Insurance Program (NFIP)?
• What is a participating policy?
• What does the policy limit represent in a property insurance policy?
• Under an open perils framework, losses are covered unless they involve which type of peril?
• A hearing may be requested by a person affected by a cease and desist order within how many days of the order?
• The authority to conduct hearings, stop insurers and producers from unfair activity, or suspend licenses typically rests with:
• Under the 2nd group exclusions, which item is not covered?
• Liability insurance claims are paid only if the insured is legally responsible for damages to another party.
• Is it legal for licensed agents to share commissions with someone who is not licensed?
• If a property loss covered by a homeowners policy is also covered by another policy, how does the homeowners policy pay?
• Which statement correctly describes compensatory damages in a civil case?
• Which causes of loss form provides open perils coverage?
• Surplus lines may be provided if: full amount cannot be obtained from authorized insurers and is placed through a surplus lines agent; which option best reflects this?
• Under the motor vehicle liability second part, which vehicle may still have liability and medical payments coverage despite the first part exclusion?
• Which of the following is considered a motor vehicle under the policy definitions?
• What is the minimum number of days' notice that must be given to cancel a liability policy?
• Which statement best reflects a unilateral insurance contract?
• Why are contractors' equipment floaters typically written on an actual cash value basis?
• What is the primary purpose of a peak season endorsement?
• Inland marine insurance primarily provides coverage for which of the following?
• An insurer cannot cancel a liability insurance policy if it is a renewal or continuation policy or has been in effect for 60 days. Which statement is true?
• The adventure clause requires the insured to provide what?
• Under the Condominium Association Coverage Form, improvements and betterments, fixtures, and appliances are covered as building property if required by the association agreement.
• Which party does the mortgage clause in a homeowners policy protect?
• Concealment can void an insurance contract if concealed facts would have changed the insurer's decision.
• Who may apply for a surplus lines license?
• Under Coverage G, which property is excluded?
• When does the period of restoration begin for business income coverage?
• A package policy is a combination policy that provides which of the following?
• In which scenario would a peak season endorsement be most beneficial?
• What is the name given to the coinsurance requirement in the homeowners policy?
• Does the insurer cover any party that holds, stores, or moves property for a fee?
• Is vacant land included as part of the insured location?
• The notice of nonrenewal must state the reason for nonrenewal.
• Theft coverage under BOP is limited to $2,500 for certain items. Which item must be at least $100 in value to be covered?
• In an appraisal clause, who selects the appraisers and the umpire?
• Under Farm Property policy, Coverage C is valued on what basis?
• Which activity is not included in farming as defined in the farm liability policy?
• Under the pair or set clause, loss of an item that is part of a pair or set may be settled by:
• Excess lines insurance is coverage obtained from
• If premium payment is more than 30 days late, the insurer may cancel after how many days' notice?
• Debris removal coverage in BOP is limited to what percentage of direct damage loss plus deductible?
• Fraternal benefit societies provide insurance to members who share:
• What can happen if an insurer does not obey a cease and desist order for unfair claims settlement practices?
• Which workers' compensation benefit category provides survivor benefits to dependents after the death of the employee?
• A commercial inland marine policy typically includes which of the following components?
• What are the insurer's obligations after a covered loss?
• Which branch passes laws that control the content and structure of insurance policies sold in the state?
• A domestic insurer
• Which term describes the chance of loss to an insured person, property, or activity?
• Under a value reporting form (CP 13 10), which statement is true?
• The building ordinance or law exclusion typically excludes coverage for which of the following?
• Sue and labor expenses refer to costs result from attempts to save damaged property from further loss.
• Which exclusion category includes a flood exclusion that applies even if flood results from a covered peril?
• What condition must be met for replacement cost coverage to pay the full replacement value?
• A monoline policy is best described as a policy that:
• When a new auto is added, which coverages apply automatically to that auto under PAP?
• Which item is commonly covered under scheduled personal property endorsements?
• Who sets the flood insurance coverages and premium rates, and are they the same regardless of which insurer issues the policy?
• A commercial crime policy provides coverage for which named perils?
• What is the rule regarding promotional items given to customers?
• Under the building and personal property coverage form, which statement about fixtures is true?
• Which damages are tangible losses based on facts?
• In the homeowners policy terms, what does 'you', 'your', and 'insured' refer to?
• Lloyd's Association is best described as:
• An eligible surplus lines insurer must maintain capital and surplus of at least how much?
• In Texas, how many hours of ethics continuing education are required within the CE framework?
• MGA: Under which condition would a corporation not be required to be licensed as an MGA?
• What does the hired auto and nonowned auto liability endorsement cover?
• Which activity does not require a surplus lines license when no commissions are involved?
• Increased cost of construction coverage is limited to up to how much per damaged building?
• After the policy has been in effect for at least 60 days, which of the following is NOT a valid ground for cancellation by the insurer?
• A plaintiff must have suffered what to recover monetary damages?
• Which topic is included under Common Policy Conditions?
• Which statement about warranties is true?
• Which is an example of a direct loss?
• Which of the following could lead to denial or revocation of a license by the Commissioner?
• Which of the following is NOT one of the four elements of negligence?
• In crime perils, which is defined as theft of property from within a premises by a person who unlawfully enters the premises?
• When is loss or damage to animals covered under BOP?
• Which statement best describes the certificate of authority for an insurer in Texas?
• Which is a physical hazard example?
• Which provision provides reimbursement of an insured's lost earnings when the insured assists in investigating or defending a claim?
• What is the 'severability of insurance' concept as applied to Section II?
• Which of the following is NOT eligible for a standard BOP?
• Which describes 'residence premises' in the homeowners policy?