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Louisiana Property and Casualty Insurance
Exam ACCURATE TESTED VERSIONS OF THE
EXAM FROM 2025 TO 2026 | ACCURATE AND
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Which of the following best describes the aleatory nature of an insurance contract? (Choose from the following options)
- Ambiguities are interpreted in favor of the insured
- Policies are submitted to the insurer on a take-it-or-leave-it basis
- Exchange of unequal values
- Only one of the parties being legally bound by the contract
- ANSWER 3. Exchange of unequal values Under Crime Coverage Form I - Lessees of Safe Deposit Boxes, securities are only covered in the event of a) Robbery b) Vandalism c) Burglary d) Theft
- ANSWER d) Theft Securities are only covered for theft, disappearance or destruction What is surplus lines insurance? a) Any insurance on items worth more than $25, b) Insurance in excess of a standard policy's coverage c) Insurance placed with an unauthorized insurer d) Additional insurance placed on itemized risks - ANSWER c) Insurance placed with an unauthorized insurer Insurance obtained from or placed with an unauthorized insurer is surplus lines insurance. If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? (Choose from the following options)
- 5 days
- 7 days
- 10 days
- 3 days
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for a) Comprehensive (other-than-collision) coverage. b) Collision coverage. c) Uninsured motorist coverage. d) Towing coverage.
- ANSWER c) Uninsured motorist coverage. Trailers, while being towed by an insured auto, are covered automatically for bodily injury (BI), property damage (PD) and uninsured motorist (U/M) under Part A of a personal auto policy. While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? (Choose from the following options)
- Property damage liability
- Collision coverage
- Other-than-collision coverage
- This loss would not be covered.
- ANSWER 1. Property damage liability Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy?
(Choose from the following options)
- Vacant farmland owned by the insured
- A residence where an insured is temporarily residing
- A family cemetery plot
- A lakeside cabin rented by the insured for vacation
- ANSWER 1. Vacant farmland owned by the insured If an insured covered under a Mobile Homeowners Policy moves the mobile home to protect it from a covered peril, the policy will pay up to (Choose from the following options)
- $350.
- $500.
- $750.
- $1,000.
- ANSWER 2. $ All of the following are parts of a personal auto policy EXCEPT (Choose from the following options)
- Liability coverage.
What type of coverage is Coverage E in homeowners policies? a) Personal liability b) Additional coverage c) Loss of use d) Personal property
- ANSWER a) Personal liability Coverage E is a personal liability coverage. Which policy consists of the declarations and conditions, endorsements, and other attachments applicable to a single line of insurance? (Choose from the following options)
- Casualty
- Commercial package
- Monoline
- Insurance
- ANSWER 3. Monoline Which of the following statements is NOT true regarding mobile agricultural machinery and equipment coverage?
(Choose from the following options)
- It relates to devices used in the everyday farm operation.
- It covers detached parts and accessories of mobile devices.
- It insures eligible equipment for open perils.
- This coverage must be written as part of farm coverage.
- ANSWER 4. This coverage must be written as part of farm coverage A deli owner has a businessowners liability policy. When a customer slipped and hurt herself at the deli, the liability policy paid for medical expenses. The customer, however, is now suing the business owner because she claims there was no caution sign warning her that the floor was wet. What is the insurer obligated to do? (Choose from the following options)
- Automatically renew the owner's policy, but they have nothing to do with the lawsuit
- Provide legal aid to the elderly woman suing the policyowner
- Nothing, they have paid the claim and their responsibility ends there.
- Pay to defend the policyowner in the lawsuit because liability coverage contains a duty-to-defend provision
- ANSWER 4. Pay to defend the policyowner in the lawsuit because liability coverage contains a duty-to-defend provision Section II - Loss Assessment Coverage - applies to assessments against the insured by a condominium association or other cooperative body of property owners.
A home is insured under an HO-2 policy. The homeowner decides to replace the roof on the house. He wasn't able to complete the roof in one day and left a portion of it unfinished overnight. A heavy rainstorm caused $20,000 of damage to the interior of the house and some furniture. In this situation, the policy will pay (Choose from the following options)
- 80% of replacement cost.
- Nothing.
- The ACV of the damage.
- Replacement cost of the damage. - ANSWER 2. Nothing. Which of the following endorsements under an Equipment Breakdown policy is used for calculating the amount to be paid on a lost business claim after a direct loss? (Choose from the following options)
- Refrigeration Interruption Coverage
- Turbine Units Explosion Coverage
- Refrigeration Interruption - Report of Values
- Business Income - Report of Values - ANSWER 4. Business Income - Report of Values Farm fences (except field and pasture fences) are covered by which farm coverage form?
a) Coverage A b) Coverage B c) Coverage E d) Coverage G - ANSWER d) Coverage G Fences, except pasture and field fences, are considered other farm structures and are covered by Coverage G - Other Farm Structures Personal business property out in the open is covered under commercial property policy only while a) Specifically described on the declarations. b) Within 150 feet of the described premises. c) Within 100 feet of the described premises. d) Located on the described premises. - ANSWER c) Within 100 feet of the described premises. Business personal property is defined in the policy as property located in the insured structure or within 100 feet of that structure. Which of the following coverages is included in an unendorsed homeowners policy? a) Personal property replacement coverage b) Fungi, wet or dry rot, or bacteria
The commercial articles form covers photo equipment or musical instruments used commercially, such as by a professional band. Within how many years of a loss may an insured bring a lawsuit against an insurer, according to the dwelling policy? a) 2 years b) 3 years c) 5 years d) 7 years - ANSWER a) 2 years If an insured wants to bring a suit against an insurer, the insured must comply with all policy conditions and start action against the insurer within 2 years of the loss. What type of information would be found in a policy's insuring agreement? a) Insurer's address b) Renewal dates c) Location of premises d) Policy limits - ANSWER b) Renewal dates An Insuring Agreement establishes the obligation of the insurance company to provide the insurance coverages as stated in the policy. The insuring agreement lists the parties to the contract, effective and renewal dates, the description of
coverage provided, and perils (among other things). Location of premises, policy limits, supplemental representations, and insurer's name and address can all be found in the Declarations. An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? a) Bailee's customers form b) Builders risk form c) General property form d) Contractors equipment floater - ANSWER d) Contractors equipment floater The contractors equipment floater covers equipment left unattended on a job site until the project is finished If more than one person has an insurable interest in the property covered under a dwelling policy, a) All involved insurers must decide which one will be liable for the loss. b) All insureds must decide which one will be liable for the loss. c) The insurer will be liable for only the insured's interest in the damaged property. d) Liability will be split evenly among all people who have insurable interest. - ANSWER c) The insurer will be liable for only the insured's interest in the damaged property.
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? a) 5 business days b) 10 days c) 30 days d) The name must be changed immediately. - ANSWER b) 10 days A producer who continues to use a unapproved trade name for 10 or more days after being notified will face a fine of up to $5,000.
- Which of the following covers the interest of a secured lender in personal property? (Choose from the following options)
- Fair value clause
- Third-party clause
- Indemnity clause
- Loss payable clause - ANSWER 1. Fair value clause
- Which of the following statements regarding surety bonds is true? (Choose from the following options)
- A surety bond is also known as third-party guarantee insurance because it always involves three parties.
- The principal is the designated beneficiary of the holder of the surety bond.
- The person who promises to fulfill the obligation of the bond is known as the obligee.
- The purpose of the surety bond is to guarantee that specific duties or obligations will be fulfilled. - ANSWER 4. The purpose of the surety bond is to guarantee that specific duties or obligations will be fulfilled.
- Coverage E (Personal Liability) and/or Coverage F (Medical Payments to Others) would respond to a claim arising from all of the following situations EXCEPT (Choose from the following options)
- An insured's boat stored in the garage slips off of its supports and injures a visitor.
- An insured's dog left in the care of a friend bites a salesman.
- An insured's 14-year-old son was throwing rocks at the neighbor's house and broke several windows.
- While sweeping the floors, an insured's resident maid trips and falls down the stairs, breaking her leg. - ANSWER 4. While sweeping the floors, an insured's resident maid trips and falls down the stairs, breaking her leg.
- According to the law of agency, insurance producers represent (Choose from the following options)
- The public.
- The State.
- Insurers.
- Symbol 1
- Symbol 2
- Symbol 7
- Symbol 19 - ANSWER 1. Symbol 1
- If the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true? (Choose from the following options)
- Federal Insurance Administration will remove the insurer from the NFIP.
- The insurer will be reimbursed for the excess costs by the NFIP.
- The insurer must cover the loss out of its surplus.
- The insurer must apply for disaster relief funds. - ANSWER 2. The insurer will be reimbursed for the excess costs by the NFIP
- How is a professional liability policy written? (Choose from the following options)
- Excess liability
- Occurrence
- Claims-made
- Open peril - ANSWER 2. Occurrence
- Which of the following is NOT part of Section II of the boatowners policy?
(Choose from the following options)
- Uninsured boaters
- Watercraft damage
- Watercraft liability
- Medical payments - ANSWER 1. Uninsured boaters
- When an insured had to have a tire replaced on his insured auto, he submitted a claim to the insurer. The company denied the claim as "wear and tear" and not insurable because (Choose from the following options)
- It is a certainty.
- It is not calculable.
- It does not affect a large number.
- It is subject to catastrophe hazard. - ANSWER 1. It is a certainty
- What is the main distinction between a hired auto and a nonowned auto? (Choose from the following options)
- The length of time the insured uses the auto
- The amount of premium
- Whether a payment is made for the use of the auto
- Who owns the auto - ANSWER 3. Whether a payment is made for the use of the auto
