Section 1A

Question 0

Texas Property and Casualty Insurance Guaranty Association

All authorized Property and Casualty insurers

Answer 0

Must participate in order to maintain their Certificate of Authority

Question 1

Texas Property and Casualty Insurance Guaranty Association protects customers

Answer 1

In the event of insurer insolvency (bankruptcy)

Question 2

Texas Property and Casualty Insurance Guaranty Association covers

Answer 2

Unpaid claims of insolvent insurers up to a maximum of $300,000

Question 3

Texas Property and Casualty Insurance Guaranty Association

The Fund exercises its powers through a Board of Commissioners who will

Answer 3

Assess each member company as necessary to pay the obligations of the Fund.

Question 4

Cancellation and Non-Renewal Requirements

Dwelling Fire and Homeowners: After a policy has been in effect for

Answer 4

60 days or upon renewal, no notice of cancellation is effective unless it is based on one or more of the following reasons:

Non-Payment of premium
Substantial Change in the Risk
Failure of the Insured to take steps to eliminate conditions that would increase the probability of a future loss

Question 5

Cancellation and Non-Renewal Requirements

In the event of a non-renewal based upon the condition of the premises, the insured must be given

Answer 5

30 days’ notice to remedy the identified conditions.

Question 6

Cancellation and Non-Renewal Requirements

All notices of cancellation or non-renewal must be in writing, must be mailed to the

Answer 6

Named insured at the address shown in the policy and must state the specific reason for at least 30days in advance of the end of the policy period

Question 7

Cancellation and Non-Renewal Requirements

Proof of mailing of a notice to the named insured at the address shown in the policy is sufficient proof or required notice,

Answer 7

Whether they received it or not

Question 8

Commercial Policies:

After a commercial policy has been in effect for at least 60 days or upon renewal, it may be

Answer 8

canceled for only the following:

Non-payment of premium or fraud
The insured’s conviction of a crime
A substantial change in the risk
A breach of contractual duties

Question 9

Commercial Policies:

The first named must receive written notice of cancellation by certified mail at least

Answer 9

10 days in advance if the cancellation is due to non-payment of premium or 60 days in advance for any other reason.

Question 10

For commercial renewal policies, the insurer must provide at least

Answer 10

60 days’ advance written notice to the first named insured if the renewal is subject to

A premium increase
Reduction in limits of insurance
Substantial reduction in coverage provided

Question 11

Personal Auto Insurance CNX and Non-Renewal Requirements:

An auto insurer may not cancel or refuse to renew an auto policy

Answer 11

Solely on the grounds of the insured’s age, race, color, religion,sex or national origin or ancestry

Question 12

For renewal policies that have been in effect for more than 60 days, the insurer

Answer 12

May only cancel or non-renew for the following reasons:

Nonpayment
The insured or HH member has had their license suspended or revoked
Has become permanently disabled
Etc…

Question 13

However, if a driver (other than the named insured) has violated one of the above conditions, the named insured

Answer 13

May avoid cancellation or non-renewal by excluding this driver in writing from coverage (an exclusion endorsement)

Question 14

The insured must receive at least 10 days’ written notice of cancellation and/or at least 30 days written notice of non-renewal. The notice must include the following:

Answer 14

Specific facts for the reasons for cancellation or non-renewal
Notice of insured’s right to contest the insured’s decision
A refund of any unearned premium

Question 15

Texas Motor Vehicle Financial Responsibility Law: Every person operating a motor vehicle on any highway in this state shall possess

Answer 15

Evidence of current financial responsibility.

Ex: 
Auto liability policy
Binder
Surety bond or certificate of Deposit
Motor vehicle insurance ID card

Question 16

Vehicles

Answer 16

Exempt from this requirement include farm tractors, farm implements temporarily on the highway , trailers not used for commercial purposes and any vehicles owned by the US Govt

Question 17

A motor veh liability policy issued in this state shall comply with the Financial Responsibility Law if it contains the

Answer 17

Minimum required limits of split limits of $30,000 for BI, $60,000 for BI per occurrence, and $25,000 for property damage to others in any one accident, or a CSL of at least $85,000 for any one accident

Question 18

In lieu of the above, proof of financial responsibility may be evidenced by depositing

Answer 18

Certificates of Deposit in the amount of $85,000, a surety bond of $85,000 or cash in the amount of $85,000

Question 19

If two or more policies affording valid auto liability insurance apply to the same motor vehicle involved in an accident, it shall be presumed that the insurance afforded by the policy in which such vehicle is described (the owner’s policy) shall be

Answer 19

Primary and the insurance afforded by any other policy (the driver’s policy) shall be excess

Question 20

TAIPA (Texas Automobile Insurance Plan)

The Commissioner will implement a reasonable plan for the distribution of applicants for motor vehicle liability policies

Answer 20

Who are in good faith entitled to but are unable to procure policies through ordinary methods.

Question 21

All insurers authorized to issue motor vehicle liability policies

Answer 21

Must participate in the Plan as a condition of their Certificate of Authority.

Question 22

TAIPA aka the

Answer 22

Assigned Risk Pool, all auto insurers must include in their notice of cancellation or non-renewal notices language that advises insured’s that they may be eligible for coverage through the Plan

Question 23

Uninsured/Underinsured Motorists Coverage: An insured may choose to have UM/UIM coverages included in an auto liability policy.

Minimum limits are

Answer 23

$30,000 per person/$60,000 per occurrence for Bodily Injury liability and $25,000 per occurrence for Property Damage liability.

Question 24

Although coverage is optional, the insurer must offer such coverage to all applicants,

Answer 24

Who may reject it in writing

Question 25

Uninsured Motor Vehicles: For the purpose of this coverage, are defined as:

Answer 25

Hit and Run vehicles, provided a claim can be proven

Question 26

Underinsured Motorist Coverage: To the extent that the total damages exceed the total liability limits, the UIM coverage is

Answer 26

Applicable to the difference

Question 27

UM and UIM coverages are

Answer 27

Separate and distinct and apply to different accident situations.

Question 28

Insurers who make payments for damages to insured’s under UM

Answer 28

may subrogate and sue for reimbursement against the UM responsible.

Question 29

Although both coverages must be offered at policy inception, if rejected in writing by the insured,

Answer 29

The coverages need not be re-offered upon renewal.

Question 30

Texas has a

Answer 30

Compulsory Workers’ Compensation law which requires employers to comply.

Question 31

Although some states require coverage to be purchased only from the State Fund (monopolistic),

Answer 31

Texas gives employers a choice of purchasing the required coverage from the State Compensation Fund, a private insurer or self-insuring (competitive)

Question 32

Worker’s Compensation

Exclusive Remedy: The right to recover for injury or death sustained by an employee is the

Answer 32

Exclusive remedy against the employer and their insurer.

Question 33

Worker’s Compensation

Lawsuits may not be filed by injured employees

Answer 33

Unless the injury was caused by the willful misconduct of the employer indicating a willful disregard for the safety of employees

Question 34

Worker’s Compensation

Covered Employment: Employers subject to the law include the state, counties, cities and school districts and

Answer 34

Every person who regularly employs any workers, except for domestic servants

Question 35

Worker’s Compensation

Covered Injuries: Personal Injury means any of the following:

Answer 35

• injury by accident arising out of the course of employment
• injury caused by the willful act of a third person
• an occupational disease which due to conditions of a particular occupation, but not ordinary diseases to which e general public is exposed

Question 36

Worker’s Compensation

No employee is entitled to receive compensation for disability from occupational disease

Answer 36

If the disability was caused by the willful misconduct

Question 37

Worker’s Compensation

Occupational disease is covered

Answer 37

If there is a direct connection to the work performed

Question 38

Worker’s Compensation

Every eligible injured employee and the dependents of an employee who is killed by an accident arising out of the course of their employment is entitled to compensation for

Answer 38

Medical expenses, nurse and hospital services and medicines and funeral expenses

Question 39

Worker’s Compensation

There is no coverage if

Answer 39

The injury was purposely self-inflicted or is due to the employee’s use of alcohol or any controlled substance which was a substantial cause of the employee’s injury or death

Question 40

Worker’s Compensation

Medical, surgical and hospital benefits are covered

Answer 40

Without limits.

Question 41

Worker’s Compensation

Disability Income Benefits: Compensation will not be paid for the first seven days after the injury

Answer 41

(Seven day waiting period)

Question 42

Worker’s Compensation

If the incapacity extends beyond seven days,

Answer 42

Compensation will begin on the eighth day

Question 43

Worker’s Compensation

A self-insurer means an individual employer or a pool that has been

Answer 43

Authorized by the Texas Workers Compensation Commission to self-insure

Question 44

Worker’s Compensation

Self-insurers must

Answer 44

Obtain a Surety Bond and specific excess insurance to protect against catastrophic losses

Question 45

Terrorism Risk Insurance Extension Act of 2005

The act is designed to

Answer 45

Safeguard commercial insurers against potential bankruptcy.

Question 46

Terrorism Risk Insurance Extension Act of 2005

The Act does not apply to

Answer 46

Personal lines, crop, livestock,mortgage,financial guaranty, medical malpractice, flood, life, and health insurance, commercial auto insurance, burglary and theft insurance, surety insurance,professional liability insurance and farm owners multiple peril insurance

Question 47

Terrorism Risk Insurance Extension Act of 2005

The terrorism act must occur

Answer 47

Within the US.

Question 48

Terrorism Risk Insurance Extension Act of 2005

TheAct does not apply to losses from acts of terrorism that, in aggregate, do not exceed

Answer 48

$25 million

Question 49

The ‘terrorism act’ must be perpetrated on behalf of a foreign person/interest. Domestic

Answer 49

Terrorism is excluded.

Question 50

Liquidated Demand: is is the Texas version of what is known as a “valued policy law”

Answer 50

Which is designed to prevent insurance companies from intentionally over insuring real property, meaning a dwelling or a home.

Question 51

Liquidated Demand: This law does not apply to

Answer 51

Contents, which are considered to be personal property.

Question 52

Liquidated Demand: the full policy limit must be paid even if

Answer 52

The limit exceeds the value of the dwelling or even its replacement cost

Question 53

Residential and Community Property: It overrides the language in a property policy that states that a spouse that is not

Answer 53

Named on the declarations page is not a named insured unless they reside with the party listed on the Declarations.