TEXAS PROPERTY AND CASUALTY
INSURANCE EXAM TESTBANK 400
QUESTIONS WITH VERIFIED ANSWERS
2024. A+ GUARANTEED
1. An Insurance company is the_____.: Principle
2. An insurance company issued a homeowners policy that included
ambiguous language regarding how a loss was settled. The insured
sued the insurance company and won. The judge stated that due to the
ambiguous language in the contract the decision must be made in favor
of the insured. The judge was basing this decision on which of the
following types of insurance contract?: Contract of adhesion
3. The _____ page in an insurance contract contains information about the
risk, the effective date of coverage, deductible, premium amounts,
coinsurance percentage, and location of the insured property.:
Declarations
4. The insured is looking for the amount of coverage in a property and
casualty policy. This information would be found in the ______.:
declarations
,5. The parts of a contract are competent parties, legal purpose, offer,
acceptance, and ________.: Consideration (CLOAC)
6. 3 types of authority are expressed (what you can do per the contract),
implied and _____.: apparent
7. A contract that must be accepted exactly as written, no changes is a
_____.: Contract of adhesion
8. Unequal exchanges between two parties is called _____.: an aleatory
contract
9. What prevents the re-insertion of a right originally waived?: estoppel
10. Split limits, aggregate limits and single limits are what types of
policies?-
: Liability
11. In a re-insurance transaction there is a ceding carrier that is the primary
insurer and _____ that is the re-insurer that assumes part of the risk.:
Assuming carrier
12. The transfer to the insurance company of the insured's right of recovery
against others is called ____.: Subrogation
13. A person or organization that has temporary possession of someone
else's personal property. (like a dry cleaner with people's clothes) is
called a ___.: bailee
,14. Losses that are paid on the basis of the cost to replace the property,
without an allowance for depreciation, are paid on _____.: a replacement
cost basis
15. Consuela's homeowners policy has an 80% coinsurance condition. Her
home's value is $125,000. What is the minimum amount of coverage she
must carry to be indemnified for losses up to the policy limits?:
$100,000
16. Linda's sofa, television set, and entertainment center were destroyed in
a fire. The total amount of the loss is $5,000; the actual cash value of the
items is $3,000. If this loss is valued on a replacement cost basis, how
much will Linda's insurance policy pay? Assume the loss is within the
policy limit.: $5,000
17. Renata's home is demolished in a fire that started when a neighbor
misdirected the fireworks he set off to celebrate the 4th of July.
Renata's insurance company pays her for the damage, then files suit
against the neighbor to recover the amount it paid for the loss. This is
an example of the application of what policy condition?: Subrogation
18. Two insurance policies apply to Monica's home. The limit for Policy A
is $100,000, and the limit for Policy 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 will Policy A pay?: $6,000.00
, 19. An insured fails to pay their homeowners insurance premium. The
mortgagee becomes aware of this fact and remits the premium to the
insurance company. Shortly thereafter the insured sets fire to their
home in an attempt to receive payment for the loss. Any loss payment
settlement would be made to the____.: mortgagee
20. An insured owns 4 stores. As inventory is sold, the insured transfers
new inventory from the other locations to the store making the sales.
Which type of policy would best fit this insured's needs?: blanket policy
21. Which of the following is an example of property that might be insured
on a valued basis?: rare painting
22. When a policy is written on a reporting basis, a premium is paid at the
beginning of the policy period that is based on an estimate of what the
final premium will be. This is called a (an) ____.: deposit premium
23. The coverages offered by an insurance policy are described in the ____.:
insuring agreement
24. What is the maximum that an insurer will pay in case of a loss?: the
limit of liability
25. The conditions section of an insurance contract sets forth the ____ of the
insured and the insurance company.: duties
26. A policy under which the insured and insurer agree on the property
value and list the value in the policy is known as ________.: an agreed
INSURANCE EXAM TESTBANK 400
QUESTIONS WITH VERIFIED ANSWERS
2024. A+ GUARANTEED
1. An Insurance company is the_____.: Principle
2. An insurance company issued a homeowners policy that included
ambiguous language regarding how a loss was settled. The insured
sued the insurance company and won. The judge stated that due to the
ambiguous language in the contract the decision must be made in favor
of the insured. The judge was basing this decision on which of the
following types of insurance contract?: Contract of adhesion
3. The _____ page in an insurance contract contains information about the
risk, the effective date of coverage, deductible, premium amounts,
coinsurance percentage, and location of the insured property.:
Declarations
4. The insured is looking for the amount of coverage in a property and
casualty policy. This information would be found in the ______.:
declarations
,5. The parts of a contract are competent parties, legal purpose, offer,
acceptance, and ________.: Consideration (CLOAC)
6. 3 types of authority are expressed (what you can do per the contract),
implied and _____.: apparent
7. A contract that must be accepted exactly as written, no changes is a
_____.: Contract of adhesion
8. Unequal exchanges between two parties is called _____.: an aleatory
contract
9. What prevents the re-insertion of a right originally waived?: estoppel
10. Split limits, aggregate limits and single limits are what types of
policies?-
: Liability
11. In a re-insurance transaction there is a ceding carrier that is the primary
insurer and _____ that is the re-insurer that assumes part of the risk.:
Assuming carrier
12. The transfer to the insurance company of the insured's right of recovery
against others is called ____.: Subrogation
13. A person or organization that has temporary possession of someone
else's personal property. (like a dry cleaner with people's clothes) is
called a ___.: bailee
,14. Losses that are paid on the basis of the cost to replace the property,
without an allowance for depreciation, are paid on _____.: a replacement
cost basis
15. Consuela's homeowners policy has an 80% coinsurance condition. Her
home's value is $125,000. What is the minimum amount of coverage she
must carry to be indemnified for losses up to the policy limits?:
$100,000
16. Linda's sofa, television set, and entertainment center were destroyed in
a fire. The total amount of the loss is $5,000; the actual cash value of the
items is $3,000. If this loss is valued on a replacement cost basis, how
much will Linda's insurance policy pay? Assume the loss is within the
policy limit.: $5,000
17. Renata's home is demolished in a fire that started when a neighbor
misdirected the fireworks he set off to celebrate the 4th of July.
Renata's insurance company pays her for the damage, then files suit
against the neighbor to recover the amount it paid for the loss. This is
an example of the application of what policy condition?: Subrogation
18. Two insurance policies apply to Monica's home. The limit for Policy A
is $100,000, and the limit for Policy 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 will Policy A pay?: $6,000.00
, 19. An insured fails to pay their homeowners insurance premium. The
mortgagee becomes aware of this fact and remits the premium to the
insurance company. Shortly thereafter the insured sets fire to their
home in an attempt to receive payment for the loss. Any loss payment
settlement would be made to the____.: mortgagee
20. An insured owns 4 stores. As inventory is sold, the insured transfers
new inventory from the other locations to the store making the sales.
Which type of policy would best fit this insured's needs?: blanket policy
21. Which of the following is an example of property that might be insured
on a valued basis?: rare painting
22. When a policy is written on a reporting basis, a premium is paid at the
beginning of the policy period that is based on an estimate of what the
final premium will be. This is called a (an) ____.: deposit premium
23. The coverages offered by an insurance policy are described in the ____.:
insuring agreement
24. What is the maximum that an insurer will pay in case of a loss?: the
limit of liability
25. The conditions section of an insurance contract sets forth the ____ of the
insured and the insurance company.: duties
26. A policy under which the insured and insurer agree on the property
value and list the value in the policy is known as ________.: an agreed
