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Property and Casualty Exam Louisiana
ACCURATE QUESTIONS AND DETAILED
ANSWERS | GUARANTEED PASS | GRADED A |
LATEST UPDATE 2025- 2026
aaa Which statements concerning the personal auto policy's other-than-collision coverage is true? A) It covers only named perils B) It only applies to leased vehicles C) It requires a separate endorsement D) It is an open peril coverage Rationale: Other-than-collision coverage under a personal auto policy is considered open peril, meaning it covers all losses not specifically excluded. Which term means legal obligation for injury caused by the failure to perform a duty? A) Subrogation B) Assignment C) Liability D) Arbitration Rationale: Liability refers to legal responsibility for harm caused by negligence or failure to meet a legal duty. In comparing a commercial policy Broad Form cause of loss to a Special Form, which statement is true? A) Broad Form has fewer exclusions B) The Special Form has more listed exclusions C) Broad Form provides more comprehensive coverage D) There is no difference in exclusions Rationale: The Special Form is more inclusive but specifically lists more exclusions due to its broader coverage base.
Randy and his daughter are hit by a negligent driver. Will Randy's personal auto policy pay medical payments coverage? A) No, the driver must be sued B) Yes C) Only if Randy was driving D) Only for his daughter Rationale: Medical Payments coverage under a personal auto policy covers occupants and pedestrians injured by an auto, regardless of fault. John’s $200,000 home with a 10-year-old roof was fully replaced after hail damage, only paying the deductible. What must be true? A) He had only actual cash value coverage B) John has at least $160,000 in dwelling coverage C) The roof was under warranty D) The storm was not covered Rationale: To receive full replacement cost coverage, most homeowner policies require the insured to carry at least 80% of the home’s replacement cost, which is $160,000 in this case. The limits of liability are found in which part of the casualty policy? A) Conditions B) Insuring agreement C) Declarations D) Definitions Rationale: The declarations section specifies key policy details including limits of liability. Which activity would not be covered under a boat owners policy? A) Towing a water skier B) Officially racing the boat C) Boating after dark D) Saltwater fishing Rationale: Competitive racing is typically excluded under standard boatowners policies. Under a commercial auto policy, liability coverage includes: A) Theft
Rationale: Coverage depends on the insured property’s location and the perils chosen in the policy. The Business Owners Policy cannot be sold to a: A) Bakery B) Dry cleaning store C) Movie theater D) Barber shop Rationale: Certain high-risk businesses like theaters are excluded from BOP eligibility. Jackie’s boat injures a swimmer. Her homeowners policy: A) Will never pay boat-related injuries B) Will only pay for motorboats C) Will pay if the sailboat is under 26 feet D) Requires a marine rider Rationale: HO policies typically cover small watercraft like sailboats under 26 feet in length. To be eligible for Workers’ Compensation benefits, an employee must: A) Be salaried B) Be injured in a work-related incident C) Prove employer negligence D) Work full-time Rationale: Workers’ Compensation covers employees injured in the course of employment, regardless of fault. Which vehicle is covered under Symbol 7 in commercial auto policies? A) All autos B) Specifically described autos C) Hired autos D) Non-owned autos Rationale: Symbol 7 applies to autos specifically listed in the policy declarations. Which is NOT necessary to establish negligence? A) Duty B) Breach of duty
C) Proximate cause D) Admission of guilt Rationale: Guilt admission isn’t required to prove negligence; legal criteria include duty, breach, causation, and damages. What triggers coverage under a Business Income form with extra expense? A) Theft loss B) Carpet cleaning after water main break C) Routine maintenance D) Fireproofing costs Rationale: The policy is triggered by physical loss or damage that necessitates income interruption and extra expense. To be paid a claim in a property and casualty policy, when must insurable interest exist? A) At time of policy purchase B) At the time of loss C) At claim submission D) At policy renewal Rationale: Insurable interest must exist at the time of the loss to receive claim payment. Which is NOT a producer’s responsibility to the insured? A) Explaining coverage B) Assisting with claims C) Helping select policy D) Settling and paying claims Rationale: Claim settlement is the insurer’s responsibility, not the producer’s. What method of handling risk involves multiple people agreeing to share losses? A) Retention B) Avoidance C) Sharing D) Transfer Rationale: Sharing distributes risk among members, such as in mutual insurance or risk pools.
D) Declaration page Rationale: A covered loss event is what triggers policy benefits. What is another name for the structure of a mutual insurance company? A) Exclusive B) Participating C) Nonadmitted D) Fraternal Rationale: Policyholders in a mutual company may receive dividends, making it a “participating” insurer. Which of the following is NOT a commercial general liability insurance limit? A) Each occurrence B) Legal defense C) Medical expense D) Aggregate limit Rationale: Legal defense costs are typically covered outside the liability limits. Where are terms clearly defined in an insurance policy? A) Conditions B) Definitions C) Exclusions D) Insuring agreement Rationale: The definitions section clarifies policy terminology and scope. Insurance policies are considered what type of contract due to only the insurer making enforceable promises? A) Conditional B) Unilateral C) Bilateral D) Executory Rationale: Only the insurer makes a legally binding promise (to pay claims), making it unilateral. According to the nationwide definition of marine insurance, which category is eligible? A) Automobiles
B) Imported goods C) Office supplies D) Residential property Rationale: Imported goods are eligible marine risks under inland marine coverage. If three people are injured in a crash and the insured has a combined single limit of $250,000, what is the total payout? A) $400, B) $250, C) $300, D) $200, Rationale: A combined single limit policy pays up to the policy limit in total, regardless of how many are injured. Which principle states that the insurer relies on the applicant's honesty and promise to pay premiums? A) Representation B) Good faith C) Legal purpose D) Utmost certainty Rationale: The principle of utmost good faith requires both parties to act honestly and fairly. Which is covered under a personal umbrella policy? A) Collision coverage B) Theft of personal property C) Liability for dog bite injury D) Scheduled jewelry Rationale: Umbrella policies provide excess liability protection, including for personal injury like dog bites. Which commercial property policy coverage protects against revenue loss after a covered event? A) Equipment breakdown B) Business income C) Extra expense D) Accounts receivable
What is considered other than collision loss under the personal auto policy - ANSWER A) car hits highway guardrail B) a car hits a house C) car is stolen and wrecked*** D) a car is unattended when struck by a struck in a parking lot Personal injury is NEVER injury to a person's - ANSWER A) Body*** B) Reputation C)Mental state D) Good name Which commercial coverage part would cover damage to a bulldozer both on and off premises? - ANSWER A) Commercial Property B) Commercial auto C) Inland Marine ** D) Equipment Breakdown Which of the following is covered under under commercial articles floater? - ANSWER A) Inherent Vice B) Theft *** C) Infidelity D) Earthquake Under the Fair Credit Reporting Act, a licensee must give Notice to the consumer no later than how many days after a Report is requested? - ANSWER A) 1 B) C)3*** D) A personal auto policy will provide coverage in all of the following except
- ANSWER
A) Guam B) Mexico*** C) Puerto Rico D) Canada All of the following are considered an insured under part a liability coverage of the personal auto policy except - ANSWER employer while insured is driving a company car. How would damage attributable to dry rot be classified - ANSWER Occurrence What is an applicant statement that the property to be insured has an operable sprinkler system that is never turn off considered to be - ANSWER A warranty Which business will be eligible for a business owner policy - ANSWER A) Auto body shop B) Theater C) Branch Bank D) Barber shop** Purchasing insurance that is unavailable in your state from a non admitted company would be what kind of transaction? - ANSWER Surplus lines The commercial general liability policy aggregate limit is a maximum amount payable per - ANSWER Policy period
B) an admitted, alien mutual company C) an authorized foreign stock company D) an authorized alien mutual company - ANSWER A) an admitted, foreign mutual company Ned purchases his business insurance on a calendar year basis. Even though his $10,000 premium is pre-paid through December 31 he decides to cancel on July 1 because he is selling his business. If he is due a prorated refund what should he receive? - ANSWER A) Somewhat more than 5, B) Somewhat less than 5, C) 5,000 ** D) imposible to determine from the information given A company has Liability insurance from two policies written for different amounts. If the company sustains a covered loss, how are the laws be paid? - ANSWER A)Double benefits will be paid B)The policy purchased first will pay the entire claim C) Pro rata benefits equal to the proportion of the policy limits each will be paid
D) No benefits are payable since this is illegal Which type of hazard is it example of a person who increases the chance of loss through carelessness or irresponsible actions? - ANSWER A) Moral hazard B) Physical hazard C) Morale Hazard **** D) Reckless Hazard
With a commercial lines policy, who does The insurance company deal directly with on issues like claims, renewals, and policy changes? - ANSWER A) Insured B) Named Insured C) Loss payee D) First named insured*** Which of the following is eligible for a business owners policy? - ANSWER A) Contractor with payroll of 500, B) a convenience store with a gasoline pump *** C) an owner occupier four family dwelling with three residential units D) motor vehicles subject to motor vehicle registration What should be reviewed to determine if a particular loss is covered by an H03?
- ANSWER A)Declarations B)Insuring Clause C) Conditions D) Exclusions ***** Which of the following best defines a personal insurance contract? - ANSWER The insurance contract is designed to transfer risk from the insured to the insurer. A policy owner is considering upgrading his homeowners coverage from H - O2 to an H-O3 which statement is true? - ANSWER A) open perils coverage on personal property will be included with ho B)Vacancy and un occupancy restrictions are eliminated with ho
dictate what settlement amount to John, disregarding the deductible? - ANSWER A) 1, B) 6, C) 8,000*** D) 9, Which events is not covered as in other than collision laws under personal auto policy? - ANSWER A) Theft B) Flood C) Mechanical breakdown **** D) earthquake Any ambiguities in a P&C policy will be resolved in favor of the policyowner because the policy is a - ANSWER contract of adhesion The medical payments coverage of a commercial general liability policy will pay the injured party for up to how long from the date of the injury? - ANSWER One year All the following are methods of limiting liability except? - ANSWER collective limit. Damage to the auto caused by which event is excluded from other than coverage of the personal auto policy - ANSWER Collision
A property damage liability policy offers protection for which of the following losses? - ANSWER Damages done to a gas station due to insured's parking collision. The property valuation method paying the full policy amount listed on the declaration page in the event of a total loss, regardless of the actual cash value is
- ANSWER A) replacement value B) Stated amount C) Market value D) Valued policy *** What is another word for risk? A) peril B) Hazard C) Exposure D) Vice - ANSWER Exposure* Which losses would NOT be covered by the Medical Payments section of a homeowners policy? - ANSWER A) funeral bills B) dental bills C) Medical bills incurred 2 years following the accident D) Pain and suffering*** Which of the following losses is covered under Coverage A Dwelling? - ANSWER A) Vehicle damage to fence B) Wind damage to detached garage
Which liability is covered by a commercial general liability policy? - ANSWER A) Employee Injury Liability B) Commercial Auto Liability C) Professional Liability D) Contractual Liability*** Under Tina's Personal Auto policy, who would NOT be considered a "family member" - ANSWER A) Tina's son living at home B) Tina's daughter away at college C) A foster child living in Tina's home D) Tina's Mom living in her own house**** Who may bring a civil action in the appropriate United States district court against any person engaging in conduct constituting an offense under Section 1033? - ANSWER Attorney General What must a business do to enjoy the benefits of the additional coverage under the Building and Business personal property coverage form of a commercial property policy? - ANSWER Nothing, they are automatic What is the primary intent of homeowners Medical payments coverage? - ANSWER To avoid lawsuits Which of the following created the national flood insurance program? - ANSWER US Congress
A jewelry store has a commercial generality liability policy written on a claims made basis with a renewal date of January 1st. A shopper trips, falls and injures herself on December 28, 2012 and submits a claim on January 4, 2013. Assuming a retroactive date of January 1, 2010, which policy will pay the claim? - ANSWER 2013 policy Under a commercial property policy, which endorsements is used to provide coverage based on actual inventory values at certain locations at specific times?
- ANSWER Value reporting form Which business would not be eligible for a business owners policy? - ANSWER A) beauty parlor B) coffee shop C) credit union*** D) dry cleaners If a covered loss occurs, the insured must provide proof of loss, and the insurer must respond within a specified time period following the loss. This is because insurance contracts are which type of contract? - ANSWER conditional All of the following types of personal property are covered under coverage c except? - ANSWER motor vehicles What characterizes a policy requiring a deductible for a loss? - ANSWER risk sharing
