Texas Property and Casualty Insurance Quiz

Jackson is shopping for automobile insurance in Texas. He wants to make sure he has all the required coverages. Which of the following is NOT a required coverage in Texas automobile insurance policies?

• Liability coverage

• Uninsured/underinsured motorist coverage

• Comprehensive coverage

• Personal injury protection (PIP)

Answer explanation

In Texas, liability coverage, uninsured/underinsured motorist coverage, and personal injury protection (PIP) are required. Comprehensive coverage is optional, making it the correct choice as it is NOT required.

Arjun is getting ready to drive his car in Texas. What must he have to meet the financial responsibility requirements?

• A valid driver's license

• Proof of insurance or other financial responsibility

• A vehicle inspection certificate

• A clean driving record

Answer explanation

To meet Texas financial responsibility requirements, Arjun must have proof of insurance or other financial responsibility. This is essential for legally driving a vehicle in the state.

Michael is purchasing automobile insurance in Texas. He wants to make sure he meets the state's minimum requirements. What is the minimum liability coverage required for bodily injury per person that Michael must have?

• $30,000

• $40,000

• $20,000

• $10,000

Answer explanation

In Texas, the minimum liability coverage required for bodily injury per person is $30,000. This ensures that Michael meets the state's legal requirements for automobile insurance.

Mia owns a home in Texas but has been unable to find an insurance company willing to provide her with basic property insurance due to the location and condition of her house. She hears about an organization that helps people in her situation. What is the purpose of the Texas FAIR Plan Association?

• To provide windstorm insurance in coastal areas

• To provide automobile insurance to high-risk drivers

• To offer basic property insurance to those unable to obtain it in the standard market

• To regulate insurance rates

Answer explanation

The Texas FAIR Plan Association is designed to provide basic property insurance to individuals like Mia, who cannot obtain coverage in the standard market due to their home's location or condition.

Rohan owns a house and has a homeowner's insurance policy. Under what condition could his policy be canceled?

• If the insured property is found to be vacant for more than 60 consecutive days

• If Rohan changes jobs

• If Rohan paints his house a different color

• If Rohan buys a new car

Answer explanation

A homeowner's insurance policy can be canceled if the insured property is vacant for more than 60 consecutive days, as this increases risk for the insurer. The other options do not typically affect policy status.

Jackson recently bought a house in a coastal area of Texas and is looking for insurance options. Who is eligible to purchase insurance through the Texas Windstorm Insurance Association (TWIA)?

• Homeowners with no history of claims

• Any homeowner in Texas

• Homeowners in certain coastal areas of Texas

• Only homeowners in urban areas

Answer explanation

The Texas Windstorm Insurance Association (TWIA) provides insurance specifically for homeowners in certain coastal areas of Texas, making this the correct choice. Other options do not accurately reflect TWIA's eligibility criteria.

Emma received a notice from her insurance company stating that her automobile policy would be canceled for nonpayment. How much notice must the insurance company provide Emma before canceling her policy?

• 10 days

• 20 days

• 60 days

• 30 days

Answer explanation

The insurance company must provide a 30-day notice before canceling Emma's policy for nonpayment, as required by most state regulations. Therefore, the correct answer is 30 days.

Grace is starting a new insurance company in Texas and wants to introduce new insurance rates and forms. Which entity must approve these rates and forms before Grace can use them?

• Texas Department of Insurance

• Texas State Legislature

• Texas Department of Public Safety

• Texas Insurance Association

Answer explanation

The Texas Department of Insurance is the regulatory body responsible for approving insurance rates and forms in Texas. Grace must obtain their approval before implementing her new insurance offerings.

Noah is studying for his insurance exam and comes across the definition of 'insurer' in TAC § 5.5002. He wants to know which types of companies are included in this definition. Which of the following is correct?

• Only stock fire insurance companies

• Only mutual fire insurance companies

• Only Lloyd's plans

• Stock fire, mutual fire, and Lloyd's plans

Answer explanation

The definition of 'insurer' in TAC § 5.5002 includes stock fire insurance companies, mutual fire insurance companies, and Lloyd's plans. Therefore, the correct answer is stock fire, mutual fire, and Lloyd's plans.

Aria recently filed an insurance claim after her home was damaged in a storm. She wants to understand how the amount she will receive from her insurance company will be determined. What do the loss settlement provisions in the Texas Insurance Code outline?

• The methods for determining the amount of loss in insurance claims

• The process for renewing insurance policies

• The requirements for obtaining insurance

• The penalties for insurance fraud

Answer explanation

The loss settlement provisions in the Texas Insurance Code outline the methods for determining the amount of loss in insurance claims, which is crucial for Aria to understand her potential compensation.