USAA LICENSING EXAM QUESTIONS AND ANSWERS
(GRADED A+) LATEST UPDATE 2025
Risk - ANSWER -Chance of loss; uncertainty of loss
What are the two types of risk? - ANSWER -Speculative and Pure
Speculative Risk - ANSWER -Involves the simultaneous chance of gain or loss: is not
insurable
Pure Risk ...
Risk - ANSWER -Chance of loss; uncertainty of loss
What are the two types of risk? - ANSWER -Speculative and Pure
Speculative Risk - ANSWER -Involves the simultaneous chance of gain or loss: is not
insurable
Pure Risk - ANSWER -a risk that presents the chance of loss but no opportunity for
gain (insurable)
What are two examples of speculative risk? - ANSWER -Gambling
Investing
What is an example of your risk? - ANSWER -Car accident
Physical hazards include - ANSWER -Visible condition that increases the chance of
loss
Morale Hazard - ANSWER -Attitude of carelessness or indifference to loss
Insurer - ANSWER -The insurance company (a.k.a. second party to the contract)
Named Insured - ANSWER -A party named on the declarations who is purchasing the
insurance policy (a.k.a. first party to the contract)
Insured - ANSWER -Who the insurer promises to protect in addition to the named
insured
Limit of Liability - ANSWER -The maximum amount that can be paid for a covered loss
Consideration - ANSWER -An exchange of value between parties to a contract
Waiver - ANSWER -The voluntary relinquishment of a known right
What is Estopple? - ANSWER -When an agent tells an insured/makes the statement
there is coverage for a loss when there is no such coverage, then the insurer is
prevented from denying the claim as a result of what precedent?
Concealment - ANSWER -Insured or prospect deliberately withholding material
information from the insurer, this voids coverage
, Material Misrepresentation - ANSWER -Insured or prospect giving incorrect material
information to the insurer, this voids coverage
Warranty - ANSWER -A written condition in the policy that must be true at the time of
the loss
Texas Department of Insurance - ANSWER -In Texas, the insurance industry is
regulated by the
Commissioner - ANSWER -The (_______) is appointed by the governor and heads the
Texas Department of Insurance
Adjuster - ANSWER -According to the Texas Insurance Code, any person who
investigates or adjusts losses, or any person who supervises the handling of claims
must be licensed as an (_______________)
A Staff Adjuster - ANSWER -A (_____) is on the payroll of an insurance company and
is paid a salary or by the hour
Independent Adjuster - ANSWER -A (___) handles claims for one or more insurance
companies and receives a fee based on time and expense.
Public Adjuster - ANSWER -A (__) works on behalf of the insured in negotiating a claim
settlement. In Texas a (______) requires another separate license called a "public
adjusters license".
Insurance Agent - ANSWER -Persons marketing (Selling) insurance products are
called (___)
Alien Insurer - ANSWER -An insurer organized and domiciled outside the United States
is called an (_____)
Domestic Insurer - ANSWER -An insurer organized, admitted, and writing insurance in
Texas is called a (______)
A Foreign Insurer - ANSWER -An insurer domiciled outside the state where she writes
business is called a (____)
Unfair Claim Settlement - ANSWER -An adjuster intentionally lowballs the claim
settlement by offering less than the amount owed to the insured
Unfair Claim Settlement Practices Act - ANSWER -An Agent collects a premium for a
policy, but does not send it to the company and allows a policy to be canceled
Unfair Claims Settlement Practices Act - ANSWER -The insurance company fails to
adopt reasonable standards for processing claims
, Unfair Claim Settlement - ANSWER -If an adjuster were to deny a claim without
conducting a reasonable investigation. This would be an example of what type of claim
settlement violation?
Supplemental Coverages - ANSWER -The insurance company defends the insured for
a suit arising out of a covered claim
An unfair claims settlement practice. - ANSWER -If an adjuster were to deny a claim
without providing the policyholder with a reasonable explanation for the denial, this
would be an example of what type of claims settlement practice?
An unfair claims settlement practice - ANSWER -If the adjuster tells the insured that he
has no coverage under a policy when the coverage really exists, this would be an
example of what type of claims settlement practice?
15 days - ANSWER -How many days does an adjust have to acknowledge the claim
15 Business days - ANSWER -How many days does an adjust have to accept or reject
the claim after he receives complete information?
5 calendar days - ANSWER -How many days does an adjuster have to send the check
after he agrees to pay the claim?
What hazards does Standard Fire Protection cover? - ANSWER -(FLI)Fire, Lightning,
Internal Explosions
What hazards does Name Peril "Basic" Cover? - ANSWER -(FLI)+
W-Wind
C- Civil Commotion
S- Smoke
H- Hail
A- Aircraft
V- Vehicle not owned by the insured
V- Volcano activity
E- Explosion
R- Riot
M- Malicious Mischief
What hazards are covered under "Named Peril Broad" coverage? - ANSWER -
(FLI+WCSHAVVERM) &
B- Burglary Damage
I- Ice/Sleet/Snow
G- Glass Coverage
A- Accidental Discharge/Overflow
F- Falling Objects
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