Evergreen Insurance Prep

Texas Property & Casualty Insurance License, Practice Exams

Texas General Lines - Property & Casualty producer licensing. National P&C insurance knowledge plus Texas insurance law (auto, property and homeowners, workers' compensation), authored from public-domain statutes.
Content last updated 30 June 2026

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Each module is scored separately here so you know exactly where you stand. To pass the real Texas exam you need a scaled score of 70.

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The free sample gives you about 20 questions per module. The full bank contains every question — general insurance plus state law — with written, statute-cited explanations. $49, one time, lifetime access on up to 3 devices — every state and line we add later included.

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Frequently asked questions

How is the Texas producer licensing exam structured?

Texas issues a General Lines - Property & Casualty license. The Pearson VUE exam has 150 scored questions (national P&C insurance plus Texas law), runs 150 minutes, and requires a scaled score of 70 to pass. This bank covers the national property & casualty material plus Texas law - auto, property and homeowners, and workers' compensation.

What score do I need to pass?

You need a scaled score of 70. Practice each module to that level and run the full exam simulation before your test date.

Are these real exam questions?

No vendor publishes the live exam. Every question here is original, written to the official content outline and grounded in public-domain sources — including the Texas Insurance Code, Transportation Code and Labor Code for the state-law questions, with the statute section cited in each explanation.

How many practice questions are included?

The full Texas bank contains 987 questions (general insurance plus Texas law), with written, source-cited explanations. The free sample gives you about 20 questions per module.

What does access cost?

$49, one time, for lifetime access — and it includes every state and line we add later, at no extra charge. No subscription.

Can I use it on more than one device?

Yes. One purchase works on up to 3 of your devices, for example your laptop, phone and tablet, so you can practise wherever you are. Your progress is saved on each device.

Do I need to create an account?

No. The practice tests run in your browser with no signup. Your score history is saved on your own device.

Sample Texas Property & Casualty Insurance License practice questions

A selection of free questions with answers and explanations. Use the interactive modules above for timed, scored drills.

A first-time offender is convicted of operating a motor vehicle without the required liability insurance. What is the statutory fine range (absent an inability-to-pay reduction)?

  1. $500 to $2,000
  2. $100 to $200
  3. $350 to $1,000
  4. $175 to $350 ✓

Why: 601.191(b) makes a first offense a misdemeanor punishable by a fine of not less than $175 or more than $350.

Coverage E (Personal Liability) typically does NOT cover:

  1. Bodily injury arising out of the insured's business activities ✓
  2. Property damage the insured negligently causes to a neighbor's property
  3. Liability for an accidental injury at a child's birthday party
  4. Bodily injury to a guest from a fall on the premises

Why: Business pursuits are generally excluded from Coverage E unless a business pursuits endorsement is added; ordinary personal liability situations are covered.

Tenant's improvements and betterments installed by a lessee are usually insured under:

  1. Coverage B — Business Personal Property of the tenant ✓
  2. Coverage C — Personal property of others
  3. They are never insurable
  4. Coverage A — Building, by the tenant

Why: Improvements and betterments made by a tenant (that cannot be legally removed) are covered as the tenant's business personal property under Coverage B.

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A policy designated as 'excess' over other coverage will:

  1. Never pay
  2. Pay pro rata with the primary
  3. Pay first, before any other policy
  4. Pay only after the primary policy's limits are exhausted ✓

Why: Excess coverage applies only after the underlying (primary) insurance limits have been used up.

Under § 542.056, the deadline for a Texas insurer to accept or reject a claim may be extended in cases such as:

  1. At the producer's request
  2. Whenever the claim exceeds $1,000
  3. A weather-related catastrophe or ongoing investigation ✓
  4. Any time the insurer is simply busy under the policy's terms

Why: The 15-business-day accept/reject deadline can be extended in defined circumstances (e.g., catastrophe or necessary investigation).

A loss in which the property is completely destroyed or damaged beyond economical repair is a:

  1. Partial loss
  2. Consequential loss
  3. Total loss ✓
  4. Salvage loss

Why: A total loss occurs when property is entirely destroyed or so damaged that repair is not economically feasible.

When an insurer transfers part of its risk on a policy to another insurer, this practice is called:

  1. Reinsurance ✓
  2. Coinsurance
  3. Retrocession to the insured
  4. Subrogation

Why: Reinsurance is the transfer of risk from the original ceding insurer to a reinsurer, allowing the insurer to spread large or numerous risks.

A Texas insurer that violates the prompt-payment deadlines is liable for the claim plus:

  1. A flat $500 fine only
  2. 18% per annum and reasonable attorney's fees ✓
  3. Nothing, if it eventually pays
  4. Triple the policy's face amount in most situations

Why: Violation makes the insurer liable for the claim amount plus 18% annual interest and reasonable attorney's fees.

Employment Practices Liability Insurance (EPLI) covers claims such as:

  1. Product defects
  2. Damage to rented premises
  3. Wrongful termination, discrimination, harassment, and retaliation by employees ✓
  4. Bodily injury to a customer

Why: EPLI responds to employment-related claims like discrimination, harassment, wrongful termination, and retaliation.

Under PAP Part A, which of the following is an "insured" while using a non-owned auto?

  1. The named insured and family members for any auto, and others only for the covered auto ✓
  2. Any person operating the named insured's vehicle for a fee
  3. Only the registered owner of the non-owned auto
  4. Anyone in the world driving any vehicle

Why: For Part A, the named insured and family members are insureds for the ownership/use of any auto, while other persons are insureds only for use of the named insured's covered auto.

Under § 541.060, an insurer's duty to attempt a prompt, fair, and equitable settlement of a claim arises once:

  1. Thirty days have passed since the claim
  2. The insurer's liability has become reasonably clear ✓
  3. The claimant retains an attorney
  4. A lawsuit is filed

Why: Section 541.060 ties the good-faith prompt-settlement duty to the point at which 'the insurer's liability has become reasonably clear.'

Texas insurance advertising must:

  1. Omit the insurer's name for privacy in most situations
  2. Only appear on television
  3. Be truthful and not misleading about policy benefits ✓
  4. Guarantee approval to every reader

Why: Advertising that is untrue, deceptive, or misleading about benefits or terms is prohibited under Chapter 541.

An insurer cancels a personal auto policy because the named insured's spouse, who resides in the household and drives a covered car, had a driver's license revoked. Is this permitted?

  1. Only if the spouse caused an accident
  2. No, license status is never a cancellation ground
  3. Only for the named insured's own license
  4. Yes, 551.104(d) allows cancellation when a household operator's license or registration is suspended or revoked ✓

Why: 551.104(d) permits cancellation of a personal auto policy if the license/registration of the named insured or a household/customary operator is suspended or revoked.

An insurer that violates the Texas prompt-payment-of-claims deadlines owes the claimant, in addition to the amount of the claim:

  1. 18% per year on the claim amount plus reasonable attorney's fees ✓
  2. Automatic treble (triple) damages in every late-payment case
  3. No additional amount, provided the insurer eventually pays
  4. A fixed administrative fine of five hundred dollars per claim

Why: Section 542.060 imposes, for violating the prompt-pay deadlines, a penalty of 18% per annum of the claim amount plus reasonable attorney's fees.

A Farm Coverage Form generally combines:

  1. Coverage for the dwelling, farm personal property, and farm structures ✓
  2. Workers compensation
  3. Only liability coverage
  4. Ocean marine and auto

Why: The Farm Coverage Form can combine coverage for the farm dwelling, household personal property, farm personal property (including livestock and machinery), and farm buildings/structures.

A mutual insurer is owned by its:

  1. Policyholders ✓
  2. Reinsurers
  3. Producers
  4. Stockholders

Why: A mutual insurer is owned by its policyholders, who may receive policy dividends from divisible surplus.

Unlike Part One, Part Two (Employers Liability) of the policy does include limits of liability. The three Part Two limits typically apply to:

  1. Medical, indemnity, and death benefits
  2. Temporary, permanent, and survivor benefits
  3. Per claim, per occurrence, and aggregate medical
  4. Bodily injury by accident, bodily injury by disease per employee, and bodily injury by disease policy limit ✓

Why: Part Two shows three limits: bodily injury by accident (each accident), bodily injury by disease (policy limit), and bodily injury by disease (each employee).

Under the PAP, who qualifies as an insured under Part B — Medical Payments?

  1. Any person injured in the accident
  2. The named insured and family members (in any auto or as pedestrians) and other occupants of the covered auto ✓
  3. Only licensed drivers
  4. Only the named insured

Why: Part B insureds are the named insured and family members while occupying or struck as pedestrians, plus any other person occupying the covered auto.

When applying for an original Texas agent license, an applicant must have a bona fide intention to engage in business in which, in any calendar year, what portion of total premium volume comes from outside the applicant's own controlled business?

  1. At least 50 percent of the total volume of premiums must be derived from persons and property other than the applicant's controlled business
  2. At least 10 percent of the total volume of premiums must be derived from persons and property other than the applicant's controlled business
  3. At least 25 percent of the total volume of premiums must be derived from persons other than the applicant and from property other than that the applicant controls ✓
  4. No more than 25 percent of the applicant's total annual premium volume may be derived from the applicant's own family relationships, owned or mortgaged property, sales, or employment relationships

Why: An original-license applicant must intend that at least 25 percent of annual premium volume comes from persons and property other than the applicant's controlled business.

Under Section 4001.157, a temporary license holder is prohibited from obtaining a commission on a sale made to:

  1. An applicant for group health insurance
  2. Any resident of Texas
  3. A person who has a family, employment, or business relationship with the temporary license holder ✓
  4. A customer referred by another licensed agent unless an exception clearly applies for the coverage that is in force

Why: Tex. Ins. Code § 4001.157(a) prohibits a temporary license holder from obtaining a commission on a sale to a person who has a family, employment, or business relationship with the temporary license holder, and (b) bars commissions on sales covering the holder, relatives, or recent employers/employees.

An insurer pulls a credit-based report on an applicant to underwrite an auto policy. Under the FCRA this is permitted because the insurer has:

  1. Written consent of three neighbors
  2. A permissible purpose (underwriting the consumer's insurance) ✓
  3. A federal subpoena
  4. A court order only

Why: The FCRA allows access to consumer reports for a permissible purpose, which includes underwriting insurance involving the consumer.

A Texas insurer requests additional documentation on a claim. It must request the items it reasonably requires:

  1. At the next renewal
  2. Only after paying part of the claim
  3. Within 15 days of receiving notice of the claim ✓
  4. Within 60 days of the loss

Why: Within 15 days of notice, the insurer must acknowledge, begin investigating, and request the items it reasonably needs.

The primary purpose of the Texas Insurance Code and TDI regulation is to:

  1. Maximize insurer profits
  2. Set producers' commission levels
  3. Protect insurance consumers and ensure insurer solvency ✓
  4. Eliminate competition among insurers under the policy's terms

Why: Insurance regulation in Texas aims to protect the public and ensure insurers remain solvent and treat consumers fairly.

Which of the following is typically NOT covered as personal property under Coverage C of a Homeowners policy?

  1. Small appliances
  2. Furniture
  3. Motorized vehicles licensed for road use ✓
  4. Clothing

Why: Motor vehicles licensed for road use are excluded from Coverage C; they are insured under auto policies. Household items like furniture and clothing are covered.

A dockworker loading and unloading ships, injured while working on the pier and over navigable waters, is most likely covered by:

  1. The Jones Act
  2. FELA
  3. Black Lung Benefits Act
  4. The Longshore and Harbor Workers' Compensation Act (LHWCA) ✓

Why: The LHWCA provides no-fault workers' compensation benefits to longshore, harbor, and maritime workers (such as those loading/unloading vessels) who are not seamen.

Under the Auto Dealers/garage program, liability for the dealer's products (e.g., a defective repair) and operations is addressed because the dealer's exposure is broader than:

  1. Workers compensation
  2. Ordinary private passenger auto liability ✓
  3. A homeowners policy
  4. An umbrella policy

Why: Auto dealers face premises, operations, and products/completed-operations exposures beyond simple auto liability, which the dealers coverage form is built to address.

Which is an example of a direct loss?

  1. Fire damage to the structure of a building ✓
  2. Loss of rental income after a fire
  3. Extra expense to operate at a temporary location
  4. Spoiled food after a power outage

Why: Direct loss is immediate physical damage to property; the fire damage to the structure is direct, while income/expense impacts are indirect.

Why does Part One (Workers Compensation) of the standard policy contain no dollar limit of liability?

  1. Because benefits are capped by the policy's aggregate limit
  2. Because the benefit amounts are set by the state's WC statute ✓
  3. Because the insurer can choose how much to pay
  4. Because Part One only covers medical bills

Why: Part One has no policy limit because the insurer agrees to pay whatever benefits the state statute requires; the statute, not the policy, controls the amount.

Which federal law would a producer most likely consult to determine whether a previously convicted individual may lawfully work in the insurance business?

  1. The CAN-SPAM Act
  2. The Fair Credit Reporting Act
  3. 18 U.S.C. §§ 1033 and 1034 ✓
  4. The Terrorism Risk Insurance Act

Why: 18 U.S.C. 1033 and 1034 govern whether persons convicted of crimes involving dishonesty may engage in the business of insurance and the penalties for violations.

An employer with worse-than-average claims experience for its class would most likely have an experience modification factor that is:

  1. Equal to 1.00, with no change
  2. Set to zero
  3. Below 1.00, producing a credit
  4. Above 1.00, producing a debit ✓

Why: A debit mod above 1.00 reflects worse-than-average loss experience and increases the employer's premium relative to the class average.