Texas Property and Casualty License Practice Exam

What is meant by the term occurrence?

1. An unexpected accident

2. An event that happens repeatedly

3. An event that happens over time

4. Any significant incident leading to liability

The correct answer is: An event that happens over time

The term "occurrence" in insurance terminology refers to an event that results in a loss or damage and which leads to a liability claim. This concept encompasses the idea that certain types of events can unfold over a period of time rather than happening as singular incidents. In the context of property and casualty insurance, occurrences are significant because they help define the nature of the coverage provided. For example, certain policies may cover damage that arises continuously from a specific cause, rather than limiting coverage to isolated incidents. Other terms, such as "unexpected accident," may describe specific types of occurrences, but they do not capture the broader definition of all events that can have liability implications over time. Similarly, while "an event that happens repeatedly" could be a type of occurrence, it is too specific and does not reflect the comprehensive definition needed in this context. Therefore, the emphasis on an event that happens over time aligns with a fuller understanding of what is meant by "occurrence" in the insurance landscape.