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Property and Casualty Exam- Louisiana Questions
with Answers
1. Should 2 or more insurers issue a combined Standard Fire Policy insuring a single
risk, in the event of a loss, the insured must notify: Any of the insurers providing coverage.
2. The policy conditions define: How parties to the contract must act following a loss.
3. Because an insurance policy is a legal contract, it must conform to the state laws
governing contracts which require all of the following elements EXCEPT: Conditions.
4. The value placed on property insured under a fire insurance policy is used to
determine the policy's: Premium.
5. Shipbuilders and repairers are covered by the: U.S. Longshore and Harbor
Workers Compensation Act.
6. Which of the following terms refers to a person's ability to do some work or the need
to do alternative work?: Temporary partial disability
7. Insurer examinations must occur no less frequently than every: 5 years.
8. If a commercial policy, in effect for less than 60 days, is to be canceled for
nonpayment of premium, how much prior notice must the insurer give to the first named insured?: 10 days
9. The Residential Condominium Building Association Policy (RCBAP) is used for
residential condominium building associations to cover the entire building under one policy. Which of the following statements about RCBAP is true?: It does not protect the individual owner from loss to personal property owned exclu- sively by the unit owner.
10. What is surplus lines insurance?: Insurance placed with an unauthorized
insurer
11. How long is a waiting period upon purchase of flood coverage through NFIP?:
30 days
12. Funding for the operation and administration of the Louisiana Insurance Guaranty
Association comes from: Annual assessments paid by member insur- ers.
13. Uninsured Motorist property damage coverage is subject to a deductible of: $250.
14. Rates that are established based on the similarities of the risk with other risks are
known as: Manual rates.
15. The personal injury liability endorsement to an HO policy applies to all the
following EXCEPT: A third party breaks a leg when the insured knocks him down.
period?: Discovery form
23. Under the Fair Credit Reporting Act, if the consumer challenges the accu- racy of
the information contained in his or her report, the reporting agency must: Respond to the consumer's complaint.
24. Workers compensation benefits are provided for an employee injury or death that
arises out of the course of normal employment in all of the following situations EXCEPT: On his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site.
25. An insured pays a $100 premium every month for his insurance coverage, yet the
insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?: Aleatory
26. An uninsured motor vehicle includes all of the following EXCEPT: The vehicle
has no liability bond or insurance in force.
27. Which of the following are the authorities that an agent can hold?: Express and
implied
28. All of the following are supplemental payments found in liability policies EXCEPT:
Costs the insured incurred in hiring an attorney.
29. In a dwelling policy, which of the following provides coverage for additional living
expenses incurred by an owner-occupant in the event a covered peril makes the
premises uninhabitable due to a covered loss?: Coverage E
30. A producer who fails to segregate premium monies from his own personal funds is
guilty of: Commingling
31. What is the name for the type of property damage coverage that protects the
insured or the covered auto in an accident with someone who does not have coverage?: Uninsured motorist
32. If a farm building or structure is vacant or unoccupied, which is true?: If for 120
consecutive days, the limits applicable to the building and its contents are reduced by 50%.
33. Workers compensation laws provide all of the following types of benefits EXCEPT:
Compensatory benefits.
34. Which of the following liability exposures is most likely for a small special- ty
clothing retail boutique?: Premises liability exposure
35. When are the limits for uninsured motorist coverage set?: When the cover- age is
purchased
36. Which of the following is a statement that is guaranteed to be true, and if untrue,
may breach an insurance contract?: Warranty
endorsement.
44. An insurer may cancel or nonrenew a Homeowners policy based on any of the
following, EXCEPT: Fraud on the part of an insured
45. Under Commercial Crime Coverage Form K - Liability for Guests' Property
- Safe Deposit Box, which covered is included?: Loss resulting from the insured's release of any other negligent party from their legal liability
46. A temporary license may be issued without examination to all of the
following, EXCEPT: The spouse of a retired producer.
47. 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?: MCS-
48. If an insurance company cancels a producer's appointment, the: Commis- sioner
must be notified within 30 days.
49. 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?: Deductible
50. 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?: Up to
51. 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?: Intervening cause
52. When would uninsured motorist coverage apply?: When the other party is legally
liable but has no insurance
53. The policy provision found in property insurance policies that prevents the insured
from collecting twice for the same loss is called: Subrogation.
54. Which of the following covers a carrier for liability for loss to cargo while it is
being transported in a truck?: Motor truck cargo policy - truckers form
55. 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?: 32 1/2%
56. 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: Legal liability.
57. Who is NOT an insured for liability on a BAP?: The owner of a car the insured
to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.
60. The limit on controlled business is: 25%.
61. All of the following are characteristics of the dwelling policy EXCEPT: The dwelling
must be owner-occupied.
62. Employers liability insurance, Part Two of a standard workers compensa- tion and
employers liability (WC&EL) policy form, excludes: An intentional act that is caused by the insured.
63. The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replace- ment,
provided that it is insured for at least what percentage of replacement cost on the date of loss?: 80%
64. A liability policy that provides coverage for a claim for injury or damage if the claim
is first reported or filed against the insured during the policy period is called: Claims- made form.
65. 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:
Cuba
66. Which of the following is INCORRECT in regard to the conditions found in a
workers compensation policy?: The insurer may inspect the workplace after giving the insured 5 days' notice.
67. The additional living expense coverage on homeowners policies: Is intend- ed to
allow the family to maintain its normal standard of living.
68. 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?: Avoidance
69. 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: Without receiving written consent from an insurance regula- tory authority.
70. All of the following are true regarding rebates EXCEPT: Rebates are allowed if it's in
the best interest of the client.
71. Which of the following would NOT be covered by HO liability insurance?-
: Intentional tort
72. Which of the following endorsements is used to insure Coverage C (per- sonal
80. When an insurance agency published an advertising brochure, it em- phasized the
company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?- : False financial statement
81. A grave marker was damaged by vandals. It would cost $3,000 to have the damage
repaired. Under these circumstances, how much would a homeown- ers policy pay?: $3,
82. The general property policy form is used for other-residential and non-res- idential
structures and their contents such as: 1. Commercial structures.
2. Cooperative associations.
3. Apartment buildings.
4. Any of the above would be covered under this form.*
83. A deliberate act that causes harm to another person, regardless of whether the harm
is intended is called a(n): Intentional tort
84. An employee drives a company auto, but does not own a vehicle herself. What
endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use?: Drive other car coverage
85. If the Commissioner believes that a producer may be in violation of an
insurance law or regulation, what may be issued?: Cease and desist order
86. A loss has occurred before the first report has been filed on a value reporting
coverage form. Which is NOT true?: Never more than 75% of the loss is paid.
87. 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?: Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair
88. Which bonds are issued to secure the release of a person from jail pending a
courtroom appearance?: Bail bonds
89. Which of the following statements is true regarding the commercial gener- al
liability policy's Coverage C - Medical Payments?: The coverage is considered good will because payments are made without regard to fault.
90. Any clause, condition, or provision contained in a fire policy contrary to the
valued policy law will: Be considered to be null and void.
91. In the computer fraud crime coverage form, what limit is placed on each
occurrence of the loss of manuscripts, drawings, or records?: $5,
92. The garage coverage form is used to insure: Auto businesses, such as auto dealers,
102. If more than one person has an insurable interest in the property covered under a
dwelling policy,: The insurer will be liable for only the insured's interest in the damaged property.
103. Which of the following is NOT one of the four primary elements consid- ered in
establishing negligence?: Proof of carelessness
104. An insured condominium unit owner wants to purchase fire and extended
coverage for personal property and liability coverage for himself and his family members. He should purchase: HO-6.
105. Which of the following is NOT considered a misrepresentation as it per- tains to
unfair trade practices?: Making comparisons between different policies
106. What is the maximum penalty for habitual willful noncompliance with the Fair
Credit Reporting Act?: $2,
107. Which of the following is NOT a duty of the employer/insured if an injury occurs at
the workplace?: Make voluntary payments for treatment of the worker's injury
108. A trucking business swaps trailers with other carriers. What coverage is
necessary to cover loss to the other's trailer while in the borrower's posses- sion?: Trailer interchange coverage
109. If an insured bakery is sued because its marketing states that the prod- ucts of
another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit?: Personal and advertising injury liability
110. An insured relocated to another state for work. However, she still owns and
insures a house in this state, but has had no one living in it for 3 months. She is also storing some furniture and clothes in the house. From an insurance standpoint, the insured's house is considered: Unoccupied.
111. States with monopolistic state workers compensation funds: Do not allow private
insurers to be licensed to write workers compensation coverage
112. Which of the following best describes a misrepresentation?: Issuing sales material
with exaggerated statements about policy benefits
113. In a personal umbrella policy, the amount paid by the insured for certain losses
not covered under the primary coverage is called: Self-insured retention.
114. In what way can an agent demonstrate a high standard of ethics?: Putting the
client's best interests before their own
115. If an insurer decides to nonrenew a commercial policy, how much prior notice
must be given to the first named insured?: 60 days
116. If a person demands a hearing, the Commissioner of Insurance must set the
hearing within: 30 days
education hours to renew his license?: A producer licensed 4 years ago who holds only one line of authority
125. What is the purpose of the coinsurance clause found in property insur- ance
policies?: Encourage the insured to insure the property closer to its full value
126. If an insurer is nonrenewing a Homeowners policy, it must mail or deliver to the
insured written notice of its intention at least: 30 days prior to the expiration date.
127. Which of the following circumstances would be EXCLUDED under med- ical
payments coverage of a personal auto policy?: The insured is injured while driving his motorcycle on his resident premises.
128. In property insurance, actual cash value is defined as which of the follow- ing?:
Replacement cost at the time of the loss, less depreciation
129. Which of the following would NOT be considered an exception to the National
Do Not Call List?: Calls based from outside of the United States
130. All of the following are considered parts of the policy structure EXCEPT-
: Provisions
131. Which of the following risks is eligible for coverage under a businessown- ers
policy?: Condominiums
132. A beauty parlor burns to the ground. What type of loss is this to the owner?:
Direct loss
133. A businessowners policy is: A self-contained prepackaged policy.
134. What is the deductible of a personal liability umbrella policy called?: The SIR
135. Giving a client an inducement to a sale not stated in the policy is an unlawful
practice known as: Rebating
136. Which of the following best describes the aleatory nature of an insurance
contract?: Exchange of unequal values
137. An insurance company has published a brochure that inaccurately por- trays the
advantages of a particular insurance policy. What is this an example of?: False advertising
138. The National Do Not Call Registry was created to regulate: Telemarketers.
139. Any payment to a producer from an insurer that is contingent on the sale of an
insurance policy or contract is called a: Commission.
140. The part of a policy that clarifies terms in the policy is the: Definitions.
141. Which of the following risks would NOT be eligible for coverage under a
homeowners policy?: An applicant who owns and lives on a commercial farm
142. A customer was injured in a supermarket parking lot when a grocery cart collided
with the customer's leg. Coverage for this claim would be provided under: Premises
