Texas Property and Casualty License Exam: What's on the Test and How to Pass It

The Texas Property and Casualty insurance license exam is required by the Texas Department of Insurance (TDI) before you can legally sell property or casualty insurance products in Texas. This guide covers exactly what the exam tests, how it is structured, and the most effective way to prepare for it.

What the License Authorizes

A Texas Property and Casualty (P&C) license authorizes you to sell, solicit, and negotiate property and casualty insurance products — including homeowners insurance, auto insurance, commercial property, general liability, and workers' compensation. It is one of the most common insurance licenses in Texas because it covers the broadest range of everyday insurance products that consumers and businesses buy.

Exam Format

The 20 unscored pretest questions are randomly distributed throughout the exam and are indistinguishable from scored questions. You will not know which questions count. Answer every question as if it is scored.

Pre-Licensing Education: What Texas Actually Requires

This is commonly misunderstood. Texas does not require pre-licensing education to sit for the P&C exam — with one exception. If you want a temporary 90-day license (which allows you to sell insurance while waiting to pass the state exam), you must complete a TDI-approved pre-licensing course first. If you are going straight to the permanent license, you can study independently and sit for the Pearson VUE exam without completing a formal course.

That said, most candidates use a pre-licensing course anyway because the exam covers substantial material and the pass rate for first-time candidates is only around 60%. A structured course is the fastest path to passing — the pre-licensing requirement existing for temporary licenses is a signal that TDI considers the course genuinely useful preparation.

What the Exam Covers

General Insurance Concepts (approximately 15%)

The foundational principles that apply across all lines of insurance — insurable interest, indemnity, subrogation, utmost good faith, and the basic structure of insurance contracts. These concepts underpin every specific coverage type you will study. Understanding them deeply makes the rest of the exam content easier to learn because most specific rules flow from these principles.

Property Insurance (approximately 30%)

This is the largest content area. It covers homeowners policies (HO-3 and HO-5 are most tested), dwelling policies, commercial property coverage, inland marine, and flood insurance. Key topics include the difference between named perils and open perils coverage, actual cash value versus replacement cost, coinsurance requirements, and the standard exclusions that appear across property policies. Texas has a severe weather environment — hurricanes, hail, tornadoes — and the exam reflects Texas-specific considerations around windstorm coverage and the Texas Windstorm Insurance Association (TWIA).

Casualty Insurance (approximately 30%)

Personal auto insurance is the most heavily tested casualty topic — Texas personal auto policy structure, liability limits, uninsured/underinsured motorist coverage, personal injury protection (PIP), and the Texas mandatory minimum coverage requirements. Commercial general liability (CGL), workers' compensation, and umbrella policies also appear. Know the difference between occurrence-based and claims-made policies.

Texas Laws and Regulations (approximately 25%)

Texas-specific insurance law is a substantial portion of the exam and one that candidates who used only national study materials often underperform on. Key areas include: the Texas Insurance Code, TDI licensing requirements, producer duties and prohibited practices, policy delivery and cancellation requirements, the Texas FAIR Plan, and consumer protection rules. The unfair claims settlement practices rules and the Texas Prompt Payment of Claims Act appear regularly.

Hardest Topics on the Exam

Three areas generate the most missed questions. First, the coinsurance clause in commercial property — calculating the penalty for underinsurance requires a specific formula that many candidates apply incorrectly under time pressure. The formula is: (amount of insurance carried ÷ amount required) × loss = claim payment. Practice this with multiple scenarios until it is automatic. Second, Texas-specific cancellation and nonrenewal rules — the notice periods and permissible reasons for cancellation differ by policy type and policy age, and the exam tests these distinctions precisely. Third, the Texas workers' compensation system — unique nationally because Texas does not require most private employers to carry workers' comp, making the Texas rules materially different from other states.

How to Study

Focus on Texas Law First

With 25% of the exam dedicated to Texas-specific content, candidates who study only national insurance concepts are leaving points on the table. TDI-specific rules, the Texas Insurance Code provisions, cancellation and nonrenewal requirements, and the Texas FAIR Plan are not covered adequately in generic national materials. Dedicate specific study sessions to the Texas content.

Practice the Coinsurance Calculation

The coinsurance penalty calculation appears on almost every administration of this exam. Write out the formula and practice with five or six different scenarios — varying the amount of insurance carried, the required amount, and the loss amount. Make sure you can identify what triggers the coinsurance clause before you sit for the exam.

Know Texas Auto Coverage Requirements

Texas minimum liability limits (30/60/25 as of the most recent update), uninsured motorist coverage rules, and PIP requirements are tested specifically. These differ from many other states and from generic national study materials. Know the Texas-specific numbers.

Use Full-Length Practice Exams in the Final Week

Shift from studying new content to timed full-length practice exams in the week before your exam. Identify which content areas you are missing and review those specifically. Candidates who score consistently above 75% on timed practice exams pass the actual exam at a high rate.

Paid Pre-Licensing Courses and Exam Prep

While Texas does not require pre-licensing education for the permanent P&C license, most candidates who use a structured course pass significantly faster. These are the most commonly used providers for Texas P&C preparation.

ExamFX

One of the most widely used insurance pre-licensing providers nationally and heavily used in Texas. ExamFX includes on-demand video lessons, a readiness exam that tells you statistically when you are ready to sit for the actual test, and a pass guarantee — if you score 80% or higher on the readiness exam and then fail the state exam, you get a refund. The Exam Prep Package runs approximately $99.95 and includes 60 days of access. The readiness indicator is genuinely useful for P&C candidates since the exam covers substantial breadth and it is easy to overestimate readiness.

Kaplan Financial Education

Kaplan is the most comprehensive option and carries a reported 93% pass rate among users. They offer on-demand self-study, live online, and in-person options — Texas is one of the states where Kaplan offers in-person classes. The in-person format runs multiple days and is the most thorough preparation available if you prefer classroom instruction. Self-paced online pricing starts around $129. Kaplan's Prepare, Practice, Perform methodology is well-suited to P&C because the breadth of coverage types benefits from structured sequencing.

Xcel Solutions

Xcel uses a three-part system: a full pre-licensing course, a prep review course that scales down content to the highest-weighted exam topics, and three exam simulators with unlimited retakes. The simulators are weighted to match the Texas state exam outline, which is particularly useful for P&C where understanding the topic weighting helps you prioritize study time. Pricing is competitive — typically $25-50 for self-paced — and Xcel is consistently recommended by Texas candidates in insurance forums as the best budget option. Access is split: 30 days for the pre-licensing course, then 30 days for the prep review and simulators.

America's Professor

A video-lecture-based provider specifically available in Texas. America's Professor provides streaming video lectures plus a hardcopy textbook mailed to you — a good fit for candidates who learn from watching instruction rather than reading. The Texas P&C course includes 100 days of streaming access plus the physical textbook. Also worth noting: America's Professor specifically states their course can be used as prep for the Texas P&C Adjuster exam as well, making it a dual-purpose resource for candidates considering that path.

Aceable Insurance

Aceable is Texas-approved and designed specifically for mobile-first learners. If you want to study primarily from a phone or tablet, Aceable's interface is better suited to that than most competitors. Includes practice questions and a pass guarantee. A good choice for candidates with commute time or fragmented study schedules.

Study Books for Independent Preparation

For candidates who prefer self-study without a course, Texas-specific P&C exam prep books are available on Amazon. The critical requirement: the book must include a Texas state law supplement covering the 25% of the exam dedicated to Texas-specific content. Generic national P&C books do not cover the Texas Insurance Code provisions, Texas cancellation rules, TWIA, or the Texas Prompt Payment of Claims Act. Search for titles explicitly labeled for Texas that include at least 1,000 practice questions with answer explanations — the explanation quality matters more than question quantity for learning the material rather than just memorizing answers.

After You Pass