Texas All Lines Adjuster License Exam — All Questions
100 questions
Under the standard fire policy, which condition suspends coverage while it lasts?
- a.Paying the premium late by one day
- b.Renting a storage unit
- c.Adding a smoke detector
- d.An increased hazard the insured controls✓
The standard fire policy suspends liability while the hazard is increased by any means within the control or knowledge of the insured. Coverage resumes when the condition ends.New York Insurance Law § 3404, Fire insurance contract; standard policy provisions; permissible variations (standard fire policy text)
A fire policy requires the insured to 'forthwith separate the damaged and undamaged personal property.' What is this requirement part of?
- a.The cancellation clause
- b.The insuring agreement
- c.The appraisal clause
- d.Post-loss duties✓
The standard fire policy's requirements-in-case-loss-occurs condition lists notice, protection, separating damaged and undamaged property, and an inventory.New York Insurance Law § 3404, Fire insurance contract; standard policy provisions; permissible variations (standard fire policy text)
Which peril is insured by the basic standard fire policy?
- a.Theft
- b.Flood
- c.Lightning✓
- d.Earthquake
The standard fire policy insures against direct loss by fire, lightning and removal from premises endangered by those perils; it excludes theft.New York Insurance Law § 3404, Fire insurance contract; standard policy provisions; permissible variations (standard fire policy text)
Under the standard fire policy, how long does the insured have to bring suit, as New York's statutory text now reads?
- a.Five years after the loss
- b.Any time before renewal
- c.30 days after the loss
- d.24 months after the loss✓
New York Insurance Law §3404's standard fire policy bars suit unless commenced within twenty-four months after inception of the loss. Thirty days or 'before renewal' would be far shorter, and in Texas any contractual suit period shorter than two years is void under Civil Practice and Remedies Code §16.070. Other forms may set different periods.New York Insurance Law § 3404, Fire insurance contract; standard policy provisions; permissible variations (standard fire policy text)
Under the standard fire policy, the insurer cancels a policy. How is unearned premium returned?
- a.Not at all
- b.Pro rata✓
- c.Short rate
- d.At half the paid premium
The company may cancel on five days' written notice with the excess of paid premium above the pro rata premium for the expired time; short rates apply when the insured cancels.New York Insurance Law § 3404, Fire insurance contract; standard policy provisions; permissible variations (standard fire policy text)
Which homeowners coverage pays for a detached fence damaged by a covered peril?
- a.Additional living expenses
- b.Medical payments
- c.Other structures✓
- d.Dwelling
TDI describes other structures coverage as paying to repair structures not attached to the house, including detached garages, sheds and fences.Home insurance guide
Which homeowners form is designed for a condominium unit owner?
- a.HO-3
- b.HO-6✓
- c.HO-4
- d.HO-2
HO-6 is the condominium unit-owners form covering personal property and items not originally installed in the unit. HO-4 is for tenants.Consumer's Guide to Homeowners Insurance (PI-015, R 07/2026)
Which homeowners form provides open-peril coverage on both dwelling and personal property?
- a.HO-6
- b.HO-4
- c.HO-2
- d.HO-5✓
The HO-5 comprehensive form has an even shorter list of exclusions than HO-3 and covers contents on an open-peril basis as well. HO-2 is named-peril.Consumer's Guide to Homeowners Insurance (PI-015, R 07/2026)
Which peril is typically NOT covered by a Texas homeowners policy, according to TDI?
- a.Fire and lightning
- b.Explosion
- c.Theft
- d.Flooding✓
TDI's home insurance guide lists flooding among the causes most policies don't cover; separate flood insurance is needed.Home insurance guide
How long is the usual waiting period before a new flood policy takes effect, according to TDI?
- a.7 days
- b.60 days
- c.30 days✓
- d.No waiting period
TDI tells consumers that most flood policies have a 30-day waiting period before kicking in, so coverage should be bought before a storm approaches.Home insurance guide
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A homeowners policy's liability coverage pays for which of these?
- a.The insured's own medical bills
- b.The insured's car
- c.Damage to the insured's own house
- d.Defense of a covered suit✓
Homeowners liability coverage pays both the cost of defending the insured and damages the court rules the insured must pay; it does not cover the insured's own property or car.Consumer's Guide to Homeowners Insurance (PI-015, R 07/2026)
A dog owned by the insured bites a visitor. Which homeowners coverage typically responds to the visitor's claim?
- a.Dwelling
- b.Personal property
- c.Personal liability✓
- d.Other structures
Homeowners liability coverage covers injury or damage the insured's pet does to others or their possessions.Consumer's Guide to Homeowners Insurance (PI-015, R 07/2026)
Why is a mobile home typically settled on an actual cash value basis?
- a.They are always total losses
- b.Its policies are written on ACV✓
- c.Texas law bans replacement cost
- d.Mobile homes cannot be replaced
The Wisconsin regulator notes that mobile home policies are written on an actual cash value basis, taking depreciation into account, with only a few insurers offering replacement cost.Consumer's Guide to Homeowners Insurance (PI-015, R 07/2026)
Which coverage in a Texas auto policy pays medical bills and lost income regardless of fault?
- a.Liability coverage
- b.PIP✓
- c.Collision coverage
- d.Towing and labor
PIP benefits are payable without regard to the fault or nonfault of the named insured or recipient, and TDI notes PIP also pays lost-income benefits.Texas Insurance Code Chapter 1952, Policy Provisions and Forms for Automobile Insurance; Auto Insurance Glossary
A Texas policyholder wants to decline uninsured/underinsured motorists coverage. How must this be done?
- a.By not paying for it
- b.Orally to the agent
- c.In writing✓
- d.It cannot be declined
Insurance Code §1952.101 says UM/UIM coverage does not apply if any insured named in the policy rejects it in writing.Texas Insurance Code Chapter 1952, Policy Provisions and Forms for Automobile Insurance
An at-fault driver's insurer becomes insolvent before paying. How does Texas law treat that driver's vehicle for UM purposes?
- a.As an uninsured vehicle✓
- b.As an excluded vehicle
- c.As an insured vehicle
- d.As a hit-and-run vehicle
Section 1952.102 treats an insured vehicle as uninsured when its liability insurer is unable to pay because of insolvency.Texas Insurance Code Chapter 1952, Policy Provisions and Forms for Automobile Insurance
Which auto coverage pays for a stolen car?
- a.Comprehensive✓
- b.Medical payments
- c.Collision
- d.Liability
TDI defines comprehensive coverage as paying for damage to or loss of the car from causes other than accidents, including theft.Auto Insurance Glossary
A driver who does not own a car wants liability coverage when borrowing cars. What does TDI describe for this need?
- a.A garage policy
- b.A collision-only policy
- c.A non-owners policy✓
- d.A gap policy
TDI's glossary describes a non-owners policy as offering liability, uninsured motorist and medical payments coverage to a named insured who does not own a vehicle.Auto Insurance Glossary
Under the Texas Personal Auto Policy form, a 'family member' must meet which test?
- a.A licensed driver
- b.Over age 18
- c.Resident of the household and related✓
- d.Named on the declarations
The form defines family member as a person who is a resident of your household and related to you by blood, marriage or adoption.Texas Personal Auto Policy (effective January 1, 2020)
Under the Texas Personal Auto Policy form, what does 'occupying' mean?
- a.Being within 100 feet of it
- b.In, upon, getting in, on, out or off✓
- c.Owning the vehicle
- d.Only seated in the driver's seat
The form defines occupying as in, upon, getting in, on, out or off, so a passenger stepping out of the car is still occupying it.Texas Personal Auto Policy (effective January 1, 2020)
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What do Business Auto Policies commonly use as their limit of liability, according to the California guide?
- a.A combined single limit✓
- b.A per-passenger limit
- c.Split limits only
- d.No limit at all
The California guide says that unlike personal auto policies with split limits, BAPs commonly use a combined single limit.Commercial Insurance Guide
A commercial property policy covers 'your business's care, custody and control' property. What is this coverage called?
- a.Business income
- b.Improvements and betterments
- c.Builders' risk
- d.Personal property of others✓
The California guide defines personal property of others as property in the business's care, custody and control.Commercial Insurance Guide
Which commercial causes-of-loss form provides the least coverage?
- a.Open-peril form
- b.Broad form
- c.Special form
- d.Basic form✓
TDI states that basic form policies provide the least coverage and special form policies the most.Commercial property insurance guide
What does a Commercial Package Policy combine?
- a.Only property and auto
- b.Life and health coverage
- c.Several coverage parts✓
- d.Personal and business auto
The California guide describes a CPP as combining two or more commercial coverage parts such as commercial property, general liability and commercial auto.Commercial Insurance Guide
Which exposure does a Businessowners Policy include that a monoline property policy does not?
- a.Workers' compensation
- b.General liability✓
- c.Commercial auto
- d.Professional liability
A BOP covers property, general liability and business interruption in one policy for small businesses; a monoline policy is a single coverage part.Commercial Insurance Guide
Boiler and machinery insurance is also marketed under which name?
- a.Inland marine
- b.Builders' risk
- c.Equipment or systems breakdown✓
- d.Business owners coverage
The California guide says boiler and machinery insurance is marketed as systems protector, systems breakdown and machinery breakdown insurance.Commercial Insurance Guide
A thief breaks into a closed jewelry store overnight and steals watches. Which crime policy peril fits best?
- a.Burglary✓
- b.Forgery
- c.Employee theft
- d.Robbery
Texas burglary is entering a building not then open to the public with intent to commit theft; robbery requires a threat or injury to a person.Texas Penal Code Chapter 30, Burglary and Criminal Trespass; Texas Penal Code Chapter 29, Robbery
Which statement about crime insurance is correct, according to the California guide?
- a.It covers only employee theft
- b.It covers only cyber loss
- c.It is a casualty line
- d.It is considered a property line✓
The California guide says crime insurance is considered a property insurance line and can cover robbery, burglary, larceny, forgery and embezzlement.Commercial Insurance Guide
Which of these is an inland marine coverage in TDI's list?
- a.Hull insurance
- b.Commercial general liability
- c.Workers' compensation
- d.Contractor equipment✓
TDI's commercial property guide lists accounts receivable, computers, contractor equipment, fine art, property in transit, valuable papers and property held for others as inland marine coverages.Commercial property insurance guide
Which insurance covers a ship's hull?
- a.Ocean marine✓
- b.Businessowners
- c.Commercial property
- d.Inland marine
Texas's statutory definition of marine insurance includes loss or damage to a hull, vessel or craft of any kind; inland marine does not cover boating transportation.Texas Insurance Code Chapter 1807, Marine Insurance; Commercial Insurance Guide
A ship's collision liability clause traditionally covered what share of collision liability, according to the Fifth Circuit?
- a.One-fourth
- b.Three-fourths✓
- c.One-half
- d.All of it
The court referred to liability insured under the 3/4 Running Down Clause of the hull policy.Crown Zellerbach Corp. v. Ingram Industries, Inc., 745 F.2d 995 (5th Cir. 1984)
What triggers a business income claim under a typical business interruption form?
- a.A general economic downturn
- b.Covered physical damage✓
- c.Any drop in sales
- d.A new competitor
TDI explains that business interruption insurance generally covers losses when a company cannot do business due to direct physical loss of or damage to its property by a covered peril.Business interruption & other business insurance
Which coverage pays the cost of renting temporary space so a damaged business can keep operating?
- a.Business personal property
- b.Loss of rents
- c.Extra expense✓
- d.Accounts receivable
TDI says extra expense coverage pays additional costs to return a business to normal after it is damaged.Commercial property insurance guide
A landlord loses rental income after a covered fire makes the building unfit for tenants. Which time element coverage fits?
- a.Loss of rents✓
- b.Contingent business income
- c.Extra expense
- d.Valuable papers
The California guide says loss of rents and rental value cover loss of rental income to the property owner when damage renders the building unfit for occupancy.Commercial Insurance Guide
Which ordinance or law coverage pays the increased cost of rebuilding to current code?
- a.Coverage B
- b.Coverage C✓
- c.Coverage A
- d.Coverage D
The California guide describes Coverage A as loss to the undamaged portion, Coverage B as demolition cost and Coverage C as increased cost of repairs or reconstruction.Commercial Insurance Guide
A commercial umbrella responds to which layer of a liability loss?
- a.Only property damage to the insured
- b.The first dollar of every claim
- c.Above the underlying policy's limits✓
- d.Only claims under $10,000
The California guide says a commercial umbrella covers the amount of loss above the limits of a basic liability policy.Commercial Insurance Guide
Which type of bond guarantees that a contractor completes the work according to the contract?
- a.A fidelity bond
- b.A performance bond✓
- c.A payment bond
- d.A bail bond
Under Texas Government Code chapter 2253, a performance bond is conditioned on the faithful performance of the work in accordance with the plans, specifications and contract documents.Texas Government Code Chapter 2253, Public Work Performance and Payment Bonds
A Texas public works contract (not a municipality) is worth $40,000. Which bond must the governmental entity require?
- a.Both bonds
- b.A payment bond only✓
- c.A performance bond only
- d.No bond
Chapter 2253 requires a performance bond for contracts over $100,000 and a payment bond for contracts over $25,000 for a non-municipal governmental entity.Texas Government Code Chapter 2253, Public Work Performance and Payment Bonds
How is professional liability (E&O) insurance usually triggered?
- a.On a claims-made basis✓
- b.On a valued basis
- c.On an occurrence basis
- d.On a pro rata basis
The California guide defines claims-made coverage as applying to claims filed during the policy period, subject to a retroactive date, which is the usual trigger for professional liability.Commercial Insurance Guide
Which exclusion in a CGL policy sends aircraft exposures to a separate aviation policy?
- a.The aircraft exclusion✓
- b.The pollution exclusion
- c.The war exclusion
- d.The liquor exclusion
The California guide lists aircraft among the CGL's major exclusions, along with automobile and watercraft, which is why aviation liability is written separately.Commercial Insurance Guide
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