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Exam Review

Key Facts: TX Property & Casualty Exam

145 Q

Exam Questions

TDI/Pearson VUE

110 + 35

National + State Split

TDI exam outline

70 scaled

Passing Score

Pearson VUE handbook

30/60/25

TX Auto Minimums

Texas Insurance Code

No req.

Pre-License Education

Self-study allowed

$49

Exam Fee

Pearson VUE

The Texas General Lines P&C exam has 145 questions (110 general + 35 state, including 15 unscored pretest items), a passing standard of a scaled score of 70, and no mandatory pre-license education. Most private employers may choose whether to carry workers' comp. TWIA provides wind/hail coverage in 14 coastal counties and parts of Harris County east of Highway 146. Texas uses modified comparative negligence (51% bar).

Sample TX Property & Casualty Practice Questions

Try these sample questions to review concepts for the TX Property & Casualty exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 397+ question experience with AI tutoring.

1The principle of indemnity in property and casualty insurance is best described as:
A.Restoring the insured to the same financial position they were in before the loss, with no gain
B.Paying the insured more than the actual loss to discourage future claims
C.Reimbursing the insured for replacement cost regardless of depreciation
D.Providing coverage only for losses caused intentionally by the insured
Explanation: Indemnity means the insured is made whole, restored to the pre-loss financial position, but not allowed to profit from a loss. Tools that support indemnity include actual cash value valuation, deductibles, coinsurance, and subrogation.
2Insurable interest in a property insurance policy must exist:
A.Only at the time the policy is purchased
B.At the time of loss
C.Only after a claim is filed
D.At no particular time as long as premiums are paid
Explanation: For property insurance, insurable interest must exist at the time of loss (unlike life insurance, where it need only exist at policy inception). Without insurable interest at the time of loss, the insured suffers no financial harm and cannot collect.
3Which legal doctrine allows an insurer that has paid a claim to recover the amount paid from a negligent third party who caused the loss?
A.Subrogation
B.Coinsurance
C.Estoppel
D.Abandonment
Explanation: Subrogation lets the insurer step into the insured's legal rights and pursue recovery from the at-fault third party after paying the insured. This prevents the insured from collecting twice and supports indemnity.
4An insured intentionally over-insures a building hoping to profit from a fire. This is most directly prevented by which insurance principle?
A.Indemnity
B.Utmost good faith
C.Adhesion
D.Subrogation
Explanation: The principle of indemnity limits recovery to the actual loss, preventing the insured from profiting. Even with a high policy limit, property is typically settled on an ACV or replacement-cost basis up to the actual loss amount, not the inflated limit.
5An insurance policy is described as a contract of adhesion. This means:
A.The contract is drafted by the insurer and offered to the insured on a take-it-or-leave-it basis
B.Both parties negotiate every term equally
C.The insured drafts the policy language
D.The contract requires both parties to contribute equally to losses
Explanation: Because the insurer writes the policy and the applicant cannot negotiate its terms, the policy is a contract of adhesion. Consequently, ambiguities are generally construed against the insurer (the drafter) and in favor of the insured.
6Which of the following is an example of the insurance principle of utmost good faith (uberrimae fidei)?
A.The applicant must honestly disclose all material facts on the application
B.The insurer must pay all claims regardless of the policy terms
C.The insured may cancel the policy at any time without notice
D.The agent guarantees that premiums will never increase
Explanation: Insurance contracts require utmost good faith from both parties. The applicant must disclose material facts truthfully (no concealment or misrepresentation), and the insurer must deal fairly. A material misrepresentation can void the policy.
7An insurance contract is considered 'aleatory.' What does this mean?
A.The dollar amounts exchanged by the parties may be unequal depending on whether a loss occurs
B.Both parties must exchange equal consideration
C.Only the insurer is bound by the contract terms
D.The contract must be in writing to be enforceable
Explanation: An aleatory contract is one in which the values exchanged are unequal and depend on an uncertain event. The insured may pay small premiums and collect a large claim, or pay premiums and never have a loss.
8A representation on an insurance application differs from a warranty in that a representation:
A.Is a statement believed to be true to the best of the applicant's knowledge
B.Is guaranteed to be absolutely and literally true
C.Is part of the printed policy form
D.Cannot affect the validity of the policy
Explanation: A representation is a statement the applicant believes true; only a material misrepresentation can void coverage. A warranty is guaranteed to be literally true and, in strict terms, even a minor breach could void the policy. Most personal-lines statements are treated as representations.
9The intentional concealment of a material fact by an applicant can allow the insurer to:
A.Void the policy
B.Increase the policy limit automatically
C.Waive the deductible
D.Extend the policy term
Explanation: Concealment is the intentional withholding of a material fact the insurer would have wanted to know. If material and intentional, it gives the insurer grounds to void (rescind) the policy.
10An insurer accepts a late premium payment without reservation, then later tries to deny a claim on the basis that the policy had lapsed. The insurer is most likely prevented from doing so by:
A.Estoppel
B.Subrogation
C.Coinsurance
D.Abandonment
Explanation: By accepting the late premium without objection, the insurer waived the lapse and is now estopped (prevented) from denying coverage on that basis. Waiver is the voluntary giving up of a known right; estoppel prevents asserting a right after the other party relied on conduct.

About the TX Property & Casualty Exam

The Texas property and casualty insurance exam covers TDI licensing requirements, Texas Insurance Code, homeowners and dwelling fire policies, commercial property, general liability, Texas auto insurance (comparative negligence), workers compensation (non-mandatory), TWIA (Texas Windstorm Insurance Association), TAIPA (Texas Automobile Insurance Plan Association), and surplus lines regulation.

Exam sponsor: Texas Department of Insurance (TDI) / Pearson VUE. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Questions

145 questions

Time Limit

2 hours 30 minutes

Passing Score

Scaled score of 70

Exam / Certification Fees

$49

Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

22/130

General I: Types of Policies

Homeowners HO-2 to HO-8, dwelling policies, commercial lines, inland marine, the NFIP

15/130

General II: Insurance Terms and Related Concepts

Insurable interest, risk, hazard, peril, loss and loss valuation

13/130

General III: Policy Provisions and Contract Law

Declarations, conditions, exclusions, proof of loss, contract elements, TRIA

23/130

General IV: Types of Policies, Bonds, and Related Terms

CGL, personal and business auto, workers compensation, crime, bonds, professional liability, umbrella, BOP

15/130

General V: Insurance Terms and Related Concepts

Negligence, liability, occurrence, binders, damages, certificates of insurance

12/130

General VI: Policy Provisions

Duties after a loss, cancellation and nonrenewal, supplementary payments, loss settlement

18/130

Texas I: Statutes and Rules Common to P&C Insurance

Commissioner of Insurance, insurance definitions, licensing requirements, marketing practices, agent duties

12/130

Texas II: Statutes and Rules Pertinent to P&C Insurance

Surplus lines, rates and forms, auto insurance, workers compensation, the guaranty association

Preparing for the TX Property & Casualty Exam

What You Need to Know

  • Passing score: Scaled score of 70
  • Exam length: 145 questions
  • Time limit: 2 hours 30 minutes
  • Exam / certification fees: $49 Official sources

Using Our Practice Resources

  • Work through all 397 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

TX Property & Casualty: Suggested Study Strategy

1Know Texas auto minimums: 30/60/25 plus modified comparative negligence (51% bar rule)
2Master TWIA coverage: 14 coastal counties plus parts of Harris County east of Highway 146, wind/hail only, Certificate of Compliance (WPI-8) required with limited exceptions
3Remember workers comp is non-mandatory in TX — non-subscribers lose common law defenses
4Study the homeowners forms on the outline: HO-2, HO-3, HO-4, HO-5, HO-6 and HO-8
5Learn TX guaranty association: $300,000 per covered claim, workers' comp claims paid in full, funded by assessments

Frequently Asked Questions

How many questions are on the Texas property and casualty insurance exam?

The TX P&C exam has 145 total questions: 110 general (100 scored, 10 pretest) and 35 state-specific (30 scored, 5 pretest), with 150 minutes total. The passing standard is a scaled score of 70, which is not a percentage correct. Pearson VUE delivers the exam at physical test centers.

Does Texas require pre-license education for P&C insurance?

No. Texas does not mandate pre-license education for the permanent P&C license. You can self-study and register directly for the exam. After licensing, 24 hours of CE are required every 2 years, including 3 hours of ethics.

What is TWIA and why is it important in Texas?

The Texas Windstorm Insurance Association (TWIA) is a residual market that provides wind and hail coverage for property in 14 designated coastal counties and parts of Harris County east of Highway 146 when the coverage isn't available in the voluntary market. New coverage takes one declination from an authorized insurer.

Why is workers compensation different in Texas?

Texas doesn't require most private employers to have workers' compensation insurance. Employers who opt out ('non-subscribers') lose the contributory negligence, assumed risk and fellow-employee negligence defenses in employee injury lawsuits.

What are Texas auto insurance minimums?

Texas requires minimum auto liability coverage of 30/60/25: $30,000 per person/$60,000 per accident bodily injury and $25,000 property damage. Texas follows modified comparative negligence with a 51% bar — if you're 51% or more at fault, you recover nothing.