Texas Personal Lines Insurance Practice Exam 2026 - Free Personal Lines Insurance Practice Questions and Study Guide

Attempting to settle a claim where liability is clear is recognized as an unfair or deceptive act in the context of insurance sales. In insurance practices, if there is a clear indication of liability, the insurer is expected to handle the claim with integrity and fairness. Settling claims in such circumstances, particularly if done in a manner that potentially minimizes the rightful compensation to the policyholder or misleads them regarding their benefits, can be seen as taking advantage of the policyholder's situation. This can undermine trust in the insurance process and is against the ethical standards upheld in the industry.

In contrast, offering a low premium, providing clear policy terms, and offering discounts for safety measures are all practices that can benefit consumers and promote transparency within the insurance market. These actions, when done appropriately, foster a healthy competitive environment. Therefore, these options do not fall under the category of unfair or deceptive acts, as they align with fair business practices and consumer welfare.