Property and Casualty Insurance Terms Practice Questions
Section II, V of the general-knowledge outline · Texas General Lines Property and Casualty: 30 scored questions
Ten questions on insurance terms and related concepts, untimed, with a worked answer after each one.
Or take the full Property and Casualty mock examHail destroys a roof that would cost $18,000 to replace. The roof had an expected life of 25 years and was 10 years old. Ignoring any deductible, what is the actual cash value of the loss?
Insurance terms and related concepts on the exam
Outline sections II and V are 30 of the 100 general-knowledge questions together: the vocabulary of property and casualty insurance, and the arithmetic of coinsurance and loss valuation.
- Outline
- Section II, V: Risk, hazards, perils, loss valuation, coinsurance, indemnity, negligence and liability, damages, binders, warranties, representations and concealment
- Share of the exam
- Property and Casualty general knowledge: 30 of 100 scored questionsTexas General Lines Property and Casualty: 30 of 130 scored questions
- Our drill
- 10 questions from 85 on this section, untimed, a worked answer after each; one free attempt, unlimited with a pass
What to know
- Only pure risk (a chance of loss with no chance of gain) is insurable; speculative risk, like gambling or investing, is not. The law of large numbers lets insurers predict losses across many similar exposures.
- A peril causes a loss (fire, windstorm, theft). A hazard increases the chance of loss: physical (a frayed wire), moral (dishonesty) or morale (carelessness because one is insured).
- Actual cash value is replacement cost minus depreciation. Replacement cost pays to replace with like kind and quality without deducting depreciation. Stated or agreed value fixes the amount when the policy is written.
- Coinsurance: if the insured carries less than the required percentage of the property’s value, the insurer pays (insurance carried ÷ insurance required) × loss, minus the deductible, up to the limit.
- Negligence has four elements: a legal duty, a breach of that duty, damages and proximate cause. Strict or absolute liability applies without negligence, for example to abnormally dangerous activities; vicarious liability makes one person liable for another’s acts.
- A warranty is a statement guaranteed to be true; a representation is true to the best of the applicant’s knowledge; concealment is withholding a material fact. A binder is temporary evidence of coverage until the policy is issued.
Test yourself on insurance terms and related concepts
Ten questions on insurance terms and related concepts, untimed, with a worked answer after each one.
Or take the full Property and Casualty mock examCommon questions
How many insurance terms and related concepts questions are on the exam?
Sections II and V are 30 of the 100 scored general-knowledge questions on the Texas General Lines Property and Casualty exam (15 each).
Are these real exam questions?
No. No state or testing vendor does not release exam questions. These are original practice questions written to the published content outline, with a worked explanation and the source behind every answer.
More property and casualty sections
Outline and facts checked November 2026: Texas Insurance Content Outlines (effective September 1, 2026) · Texas Insurance Licensing Candidate Handbook.
Original independent practice questions written to the published Pearson VUE content outline. Not affiliated with or endorsed by Pearson VUE, the Texas Department of Insurance or any state insurance department.