Texas Property & Casualty License Questions and Answers Already Passed

Texas Property & Casualty License Questions and Answers Already Passed Property vs Casualty: What is considered property? ✔✔Structure & Personal Property Property vs Casualty: What is considered casualty? ✔✔Non-property losses. Legal liability to others. 3rd Party Risk ✔✔uncertainty of financial loss Pure Risk ✔✔Chance of Loss Speculative Risk ✔✔Chance of Loss or Gain (Gamble) Insurance (covers which type of risk?) ✔✔Pure Risk Only How does the law of large numbers apply in insurance? ✔✔Actuaries use the law of large numbers to estimate claims What is the law of large numbers? ✔✔as the number of a similar loss exposure increases, the more accurate claims can be predicted from the group. What is a peril? ✔✔cause of loss What is a hazard? ✔✔things that increase the chance of a peril happening Three types of hazards ✔✔Physical: visible characteristic (dead tree) Moral: Dishonest tendencies Morale: Attitude of carelessness Proximate Cause ✔✔First cause in an unbroken chain of events Elements of a legal contract (CALC) ✔✔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? ✔✔Information believed to be true. What is misrepresentation? ✔✔Information that is not true. False information. What is material misrepresentation? ✔✔Information that is not true but would have caused the insurer not to issue the policy. (4 prev spd tix) What is fraud? ✔✔An all out effort by one party to deceive and cheat the other. What is warranty? ✔✔Guarantee that an insured will or will not do something What are the four major parts to an insurance policy structure? (DICE) ✔✔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) ✔✔Policy Number Parties