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TEXAS PROPERTY AND CASUALTY LICENSE REVIEWED EXAM
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TEXAS PROPERTY AND CASUALTY LICENSE REVIEWED EXAM
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TEXAS PROPERTY AND CASUALTYLICENSE REVIEWED EXAM
Property vs Casualty: What is considered property? ANSWER
Structure & Personal Property
Property vs Casualty: What is considered casualty? ANSWER
Non-property losses. Legal liability to others. 3rd Party
Risk ANSWER uncertainty of financial loss
Pure Risk ANSWER Chance of Loss
Speculative Risk ANSWER Chance of Loss or Gain (Gamble)
Insurance (covers which type of risk?) ANSWER Pure Risk
Only
How does the law of large numbers apply in insurance?
ANSWER Actuaries use the law of large numbers to estimate
claims
What is the law of large numbers? ANSWER as the number of
a similar loss exposure increases, the more accurate claims
can be predicted from the group.
What is a peril? ANSWER cause of loss
What is a hazard? ANSWER things that increase the chance of
a peril happening
Three types of hazards ANSWER Physical: visible
characteristic (dead tree)
, Moral: Dishonest tendencies
Morale: Attitude of carelessness
Proximate Cause ANSWER First cause in an unbroken chain of
events
Elements of a legal contract (CALC) ANSWER C - Competent
parties (18/Right frame of mind)
A - Agreement (Both parties agree)
L - Legal Purpose (The risk is LEGAL)
C - Consideration (It has to be fair)
What is representation? ANSWER Information believed to be
true.
What is misrepresentation? ANSWER Information that is not
true. False information.
What is material misrepresentation? ANSWER Information that
is not true but would have caused the insurer not to issue the
policy. (4 prev spd tix)
What is fraud? ANSWER An all out effort by one party to
deceive and cheat the other.
What is warranty? ANSWER Guarantee that an insured will or
will not do something
What are the four major parts to an insurance policy structure?
(DICE) ANSWER D - Declarations Page (First Page)
I - Insuring Agreement (Insurers promise to pay)
C - Conditions (Rules)
E - Exclusions (Not covered)
What information is on the declarations page? (Remember 6
Ps) ANSWER Policy Number
Parties
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