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Property and Casualty Exam- Louisiana
EXAM 2025 | ACTUAL REAL EXAM
ACCURATE QUESTIONS AND ANSWERS
WITH RATIONALES | VERIFIED AND LATEST
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he personal injury liability endorsement to a homeowners policy applies to all the following EXCEPT: A. Libel B. Slander C. False arrest D. A third party breaks a leg when the insured knocks him down Correct Answer: D Rationale: Personal injury liability covers non-physical injuries like libel or slander. Bodily injury like a broken leg is covered under general liability, not personal injury. The process an insurer uses to evaluate applications and determine if a policy should be issued and on what terms is known as: A. Rating B. Underwriting C. Binding D. Quoting Correct Answer: B Rationale: Underwriting is the process of evaluating risk and determining the appropriate terms and pricing for insurance. Terrorism Risk Insurance Program Reauthorization Act of 2015 has extended the TRIA to the year:
A. 2017
B. 2018
C. 2020
D. 2022
Correct Answer: C Rationale: The 2015 reauthorization extended TRIA through December 31, 2020. According to the Fair Credit Reporting Act, which of the following is NOT considered negative information? A. Missed payments B. Bankruptcies C. Foreclosures D. Disputes regarding consumer report information Correct Answer: D Rationale: Disputes are part of a consumer's right to challenge and are not inherently negative information. Replacement cost coverage is provided in dwelling policies when: A. The deductible is met B. The structure is over 20 years old C. The insured carries at least 80% of the replacement cost D. The structure is less than 1,000 sq. ft. Correct Answer: C Rationale: Most replacement cost policies require coverage to be at least 80% of the replacement cost of the property. The business income coverage form is an example of what kind of coverage? A. Occurrence B. Blanket C. Time element D. Agreed value Correct Answer: C
Workers compensation benefits are provided in all the following cases EXCEPT: A. Slip and fall in the workplace B. Injury during a required work task C. Harm from repetitive motion D. Injury while observing a competitor's ad on personal time Correct Answer: D Rationale: Workers compensation does not cover injuries that occur outside the scope of employment. An insured pays $100/month but receives $10,000 in coverage. This illustrates which contract feature? A. Conditional B. Unilateral C. Aleatory D. Adhesion Correct Answer: C Rationale: An aleatory contract is based on unequal exchange of value — small premium for potentially large payout. Which of the following is NOT considered an uninsured motor vehicle? A. A hit-and-run vehicle B. A vehicle with no liability coverage C. A stolen vehicle D. A vehicle with liability insurance Correct Answer: D Rationale: A vehicle with liability insurance is not considered uninsured. What are the types of authority held by an insurance agent? A. Legal and illegal B. General and limited C. Express and implied D. Active and passive
Correct Answer: C Rationale: Express authority is stated in the contract; implied is assumed necessary to carry out duties. Which of the following is NOT a supplemental payment in liability policies? A. Court costs B. Bail bonds C. Premiums on appeal bonds D. Attorney fees the insured paid personally Correct Answer: D Rationale: Supplemental payments cover attorney fees the insurer incurs, not those paid by the insured. Which part of a dwelling policy provides coverage for additional living expenses? A. Coverage A B. Coverage B C. Coverage D D. Coverage E Correct Answer: D Rationale: Coverage E applies to additional living expenses for owner-occupants after a covered loss. A producer who mixes premium funds with personal funds is guilty of: A. Embezzlement B. Coercion C. Commingling D. Twisting Correct Answer: C Rationale: Commingling is the illegal mixing of client funds with personal or business funds.
D. The primary insurer Correct Answer: C Rationale: Notice to any insurer providing coverage suffices in a shared policy situation. Policy conditions describe: A. What is insured B. Who is insured C. How the insurer calculates premiums D. Duties of both parties after a loss Correct Answer: D Rationale: Conditions outline the responsibilities of both the insurer and the insured after a loss. All of the following are elements of a legal contract EXCEPT: A. Offer B. Acceptance C. Conditions D. Consideration Correct Answer: C Rationale: Conditions are part of the policy, but not a required element of a contract. What determines the premium in a fire insurance policy? A. Actual cash value B. Value placed on property C. Salvage value D. Loss ratio Correct Answer: B Rationale: The declared or agreed value of the insured property affects premium calculation.
Shipbuilders and repairers are covered under: A. Workers Compensation B. Federal Employers Liability Act C. U.S. Longshore and Harbor Workers Compensation Act D. Railroad Retirement Act Correct Answer: C Rationale: This Act provides compensation benefits to maritime workers injured on navigable waters. The term for a person who can work in a limited capacity is: A. Total disability B. Temporary partial disability C. Permanent disability D. Modified capacity Correct Answer: B Rationale: Temporary partial disability indicates the person can perform some work during recovery. Insurer examinations must occur at least every: A. 1 year B. 3 years C. 5 years D. 10 years Correct Answer: C Rationale: Most states require insurers to be examined at least once every five years. If a commercial policy is canceled for nonpayment within 60 days, how much notice must be given? A. 30 days B. 15 days C. 20 days
Which liability exposure is most common for a clothing boutique? A. Completed operations B. Product liability C. Premises liability D. Professional liability Correct Answer: C Rationale: A retail store faces the highest liability exposure from slip-and-fall or customer incidents on premises. When are uninsured motorist limits set? A. After a claim B. At policy renewal C. At the time of accident D. When purchased Correct Answer: D Rationale: The limits are chosen and set when the policyholder selects the coverage. A statement guaranteed to be true and part of the insurance contract is a: A. Representation B. Waiver C. Warranty D. Endorsement Correct Answer: C Rationale: A warranty is a guarantee; a breach can void the policy. Residential structures under NFIP are insured by which form? A. RCBAP B. Commercial form C. General property form D. Dwelling policy form
Correct Answer: D Rationale: The dwelling policy form is used for homes and residential buildings. Under business auto coverage, mobile equipment is covered when: A. Stored at a business location B. Operated by employees C. Carried or towed by a covered auto D. Stationary on a job site Correct Answer: C Rationale: Mobile equipment is covered for liability when transported by a covered auto. What form covers liability for malpractice in medical professions? A. Errors and omissions B. General liability C. Directors and officers D. Physicians, surgeons and dentists malpractice Correct Answer: D Rationale: This form is designed specifically for liability from medical errors. Which of the following is NOT covered under Section II Medical Payments of a HO policy? A. Guest slips in the kitchen B. Delivery person injured on the porch C. Neighbor bit by your dog D. Stranger bitten by a dog you’re walking for a friend Correct Answer: D Rationale: You’re not the owner of the dog and liability may not be extended from your policy to that situation Which of the following would NOT be covered by medical payments to others under Section II of a homeowners policy? A. A delivery driver slips on your icy steps
Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct? - ANSWER Coverage C limits will no longer apply to the jewelry insured by the endorsement. An insurer may cancel or nonrenew a Homeowners policy based on any of the following, EXCEPT - ANSWER Fraud on the part of an insured Under Commercial Crime Coverage Form K - Liability for Guests' Property - Safe Deposit Box, which covered is included? - ANSWER Loss resulting from the insured's release of any other negligent party from their legal liability A temporary license may be issued without examination to all of the following, EXCEPT - ANSWER The spouse of a retired producer. To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form?
- ANSWER MCS- 90 If an insurance company cancels a producer's appointment, the - ANSWER Commissioner must be notified within 30 days. In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit? - ANSWER Deductible
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records? - ANSWER Up to $2, After a storm dumps several inches of snow, an insured spends several hours clearing his sidewalk and driveway. Later that night it begins to sleet. Before the insured can clear his walks again, his neighbor slips and falls while walking past the insured's house, breaking his arm. Which defense will reduce recovery for the neighbor's injury? - ANSWER Intervening cause When would uninsured motorist coverage apply? - ANSWER When the other party is legally liable but has no insurance The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called - ANSWER Subrogation. Terrorism Risk Insurance Program Reauthorization Act of 2015 has extended the TRIA to the year - ANSWER 2020 Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? - ANSWER Motor truck cargo policy - truckers form Under the Workers Compensation Act, what percentage of the employee's wages will the surviving spouse with no children receive in the event of the employee's death? - ANSWER 32 1/2% If a guest's property is lost or damaged while on the insured's premises or in their control, Crime Coverage Form L - Liability for Guests' Property - Premises covers the insured's - ANSWER Legal liability.
An automobile liability insurance policy, in addition to providing coverage to the insured while within the state of Louisiana, must provide coverage for the insured while operating the vehicle in all of the following places, EXCEPT - ANSWER Cuba Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy? - ANSWER The insurer may inspect the workplace after giving the insured 5 days' notice. The additional living expense coverage on homeowners policies - ANSWER Is intended to allow the family to maintain its normal standard of living. An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe? - ANSWER Avoidance Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce - ANSWER Without receiving written consent from an insurance regulatory authority. All of the following are true regarding rebates EXCEPT - ANSWER Rebates are allowed if it's in the best interest of the client. Which of the following would NOT be covered by HO liability insurance? - ANSWER Intentional tort
Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy? - ANSWER Scheduled personal property endorsement What is a foreign insurer? - ANSWER An insurer with a home office in another state Which of the following is an example of a producer's fiduciary duty? - ANSWER The trust that a client places in the producer in regard to handling premiums. In liability insurance policies, supplementary payments are made - ANSWER In addition to the limit of liability. A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? - ANSWER $175, All of the following are factors in the determination of actual cash value EXCEPT - ANSWER Insurance premium paid. A producer has been notified by the Commissioner to stop using an unapproved trade name. How many days does the producer have to change the trade name before facing a fine? - ANSWER 10 days For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as - ANSWER Robbery.
A loss has occurred before the first report has been filed on a value reporting coverage form. Which is NOT true? - ANSWER Never more than 75% of the loss is paid. While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy? - ANSWER Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair Which bonds are issued to secure the release of a person from jail pending a courtroom appearance? - ANSWER Bail bonds Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments? - ANSWER The coverage is considered good will because payments are made without regard to fault. Any clause, condition, or provision contained in a fire policy contrary to the valued policy law will - ANSWER Be considered to be null and void. In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records? - ANSWER $5, The garage coverage form is used to insure - ANSWER Auto businesses, such as auto dealers, service stations, and auto repair shops. Duties of the insurer found in property policy conditions include all of the following EXCEPT - ANSWER Notify the insured in the event of financial difficulty.
Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy? - ANSWER Theft of a renter's lawnmower used to service the premises Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises? - ANSWER $ Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss? - ANSWER 30 days Pertaining to insurance, what is the definition of a fiduciary responsibility? - ANSWER Promptly forwarding premiums to the insurance company Coverage F (medical payments) under a homeowners policy would cover - ANSWER A residence employee who is injured on the job. All of the following are excluded in the equipment breakdown basic policy EXCEPT
- ANSWER Explosion of steam boilers. Which of the following is a statutory defense? - ANSWER Comparative negligence A temporary license is good for - ANSWER 180 days If more than one person has an insurable interest in the property covered under a dwelling policy, - ANSWER The insurer will be liable for only the insured's interest in the damaged property.
