P&C 2024/2025 Actual Exams Practice Questions and 100% Correct Verified Answers Graded A, Exams of Insurance law

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P&C 2024/2025 Actual Exams Practice Questions and

100% Correct Verified Answers Graded A

Lesson 1: Louisiana Insurance Regulations Which of the following is a reason for suspension or revocation of a producer's license by the Commissioner? a. Playing golf on Fridays b. Failing to pay child support c. Paying a credit card bill late one month d. Obtaining a real estate license b. Failing to pay child support Correct The Commissioners' duties do not include: a. Issuing, renewing, suspending and revoking insurance licenses b. Issuing cease and desist orders in the business of insurance c. Examining the financials of an insurer d. Reviewing the financials of a software company d. Reviewing the financials of a software company The Insurance Department reviews the files of insurance companies at least once every ___ years? a. 3

b. 4 c. 5 d. 6 c. 5 Fraudulent insurance acts include all of the following except: a. Diverting money from an insurer b. Giving false information to the Commissioner c. Presenting financials to the Department with a few mistakes d. Knowingly selling policies for a bankrupt insurance company c. Presenting financials to the Department with a few mistakes The Violent Crime Control and Law Enforcement Act requires ________ to get permission from the Commissioner before they can get an insurance license. a. minors b. producers from other states c. convicted felons d. anyone who has had a license expire c. convicted felons The Fair Credit Reporting Act established procedures to protect:

a. Consumers b. Producer agencies c. Insurance agents d. Claims adjusters a. Consumers A producer's license for property and casualty requires how many hours of CE every renewal period? a. 20 b. 12 c. 16 d. 24 d. 24 The renewal fee for a Louisiana producer license is: a. $ b. $5, c. $ d. $ c. $ The federal law that says the federal government can only regulate insurance companies to the extent they are not regulated by state law is

a. The Law Enforcement Act of 1994 b. McCarran-Ferguson Act c. Gramm-Leach-Bliley Act d. FCRA b. McCarran-Ferguson Act The requirements to get a resident Louisiana insurance producer's license include all of the following EXCEPT: a. 18 years of age b. Pass state exam c. Associate's degree d. Live or work in Louisiana c. Associate's degree Lesson 2: General Insurance Which of the following is not an element of a contract? a. Legal purpose b. Legal importance c. Consideration

d. Competent parties b. Legal importance Giving up a right or privilege is called? a. Waiver b. Estoppel c. Adversion d. Sedition a. Waiver The client hands an initial premium check to the producer and expects the producer to forward the money to the insurer for processing. Even though his contract did not state that he must pay for the postage to forward the money to the insurer, his actions are representing what type of authority. a. Aleatory b. Implied c. Express d. Absolute b. Implied The type of authority indicated by one's actions is called? a. evident b. adverse

c. valid d. apparent d. apparent What is the legal term for the process used to prevent someone from taking back a right that they have previously waived: a. Waiver b. Reinsurance c. Estoppel d. Indemnify c. Estoppel Which of the following is NOT a necessary characteristic of an insurable risk? a. Adverse Selection b. Predictable c. Not Disastrous d. Measurable a. Adverse Selection Which of the following does not prevent an insurer from adverse selection: a. Restriction of Coverage

b. Declining an application for coverage c. Offering higher rates for coverage d. Underwriting every risk d. Underwriting every risk An insurance company formed outside of the United States is called a/an _______. a. foreign Incorrect b. expatriot c. alien d. offshore c. alien A legal contract that exchanges unequal values between the parties is termed as: a. Aleatory b. Unequivocal c. Imbalanced d. Disproportionate a. Aleatory The marketing system that gives a business owner an exclusive territory to represent one insurance company defines a. General Agency

b. Captive Agent c. American Agency System d. Managerial Branch a. General Agency Lesson 3: Property and Casualty Insurance Basics What rating method involves modifying the premium based on the insured's loss experience over a specified period of time? a. Merit rating b. Manual rating c. Judgment rating d. Experience rating d. Experience rating If the insurance company is cancelling a Commercial Package policy for nonpayment of premium, the insured must be given at least how many days notice of cancellation? a. 30 b. 60 c. 14 d. 10

d. 10 By entering into an insurance contract, a policyholder transfers the right of legal action against a responsible third party to the insurer. This process is known as a. Insurable interest b. Coinsurance c. Subrogation d. Abandonment c. Subrogation The commercial property policy condition that automatically provides broader coverage when an insurer makes revisions to a current policy edition without charging the insured additional premium is called the a. Duplicate coverage clause b. Other insurance clause c. Liberalization clause d. Assignment clause c. Liberalization clause A short term proof of insurance coverage provided to an applicant until a policy can be produced is known as a/an: a. Endorsement b. Preliminary contract

c. Proposal d. Binder d. Binder A list of the insured's duties following a loss can be found in which of the following policy sections? a. Declaration b. Insuring agreement c. Conditions d. Exclusions c. Conditions If a building owner purchases two separate fire policies from two separate insurers with identical limits of liability and then suffers a loss, payment will be made on which if the following bases? a. Reimbursement basis b. All risk basis c. Pro rata basis d. Specified basis c. Pro rata basis A portion of an insurance contract that informs who and what is covered, in addition to when coverage is effective, is known as the a. Declaration page

b. Insuring agreement c. Conditions d. Exclusions a. Declaration page The Johnson Watch Company purchases a property policy with a 90% coinsurance clasue and a coverage limit of $150,000. The replacement cost of the building insured is $200,000. The company suffers a $20,000 fire loss. What will the insurance company pay? a. $12, b. $16, c. $18, d. $20, b. $16, Malik is successfully sued for negligence. The jury awards the injured party $175,000. The limits under Malik's liability policy provide coverage up to $100,000 per occurrence. In addition, his insurance carrier is charged $17,000 for defending the suit. How much will Malik's carrier pay to the injured party? a. $100, b. $117, c. $125,

d. $175, a. $100, Lesson 4: Dwelling Policy Which of the following items would be covered under Coverage C of a dwelling policy? a. Yacht b. Ping pong table c. Motorcycle d. Pet dog b. Ping pong table A DP1 Basic dwelling form without the extended coverage perils covers a. Fire b. Lightening c. Internal explosion d. All of the above d. All of the above Which dwelling form value claims to the dwelling and other structures by Actual Cash Value? a. DP1 Basic

b. DP2 Broad c. DP3 Special d. DP a. DP1 Basic V&MM is not covered if the property is vacant more than ____ days. a. 60 b. 30 c. 10 d. 20 a. 60 Which of the following coverages IS included in the Homeowners policy but is NOT included in an unendorsed Dwelling policy? a. Dwelling b. Other structures c. Personal property d. Liability d. Liability The General Exclusions include all of the following except: a. Storage sheds

b. Animals c. Motorized vehicles d. Aircraft a. Storage sheds The insured's home is covered by a DP-3. Two years ago, the insured bought the home for $58,000. Today, it's replacement value is $60,000. How much Coverage A does the insured need to qualify for replacement cost coverage? a. $60, b. $46, c. $58,0 00 d. $48, d. $48, The Basic DP1 covers Removal for ______ days. a. 5 days b. 10 days c. 30 days d. 60 days a. 5 days

Which of the following coverages are commonly available on a dwelling policy by endorsement? a. Collapse and watercraft liability b. Theft and liability c. Pets and valuable papers d. Satellite dish towers b. Theft and liability The limit for Fair Rental Value or Additional Living Expense is usually limited to: a. 50% of Coverage B b. 20% of Coverage A c. 10% of Coverage A d. 30% of Coverage C b. 20% of Coverage A Lesson 5: Homeowners Policy Which of the following would not be covered by an unendorsed homeowners policy? a. Home that is owner occupied by the insured b. Attached garage c. Personal property in the home

d. Mobile home d. Mobile home Open peril coverage for both the dwelling and personal property is provided by the a. HO- 5 b. HO- 3 c. HO- 2 d. HO- 4 a. HO- 5 If an HO-3 Special homeowner's policy has a coverage limit of $200,000 on the dwelling, how much coverage would automatically apply to cover the insured's personal property under Coverage C? a. $20, b. $50, c. $100, d. $200, c. $100, The best available coverage for homeowner would be the a. HO- 3 b. HO- 4

c. HO- 2 d. HO- 5 d. HO- 5 Larry owns a home with a replacement cost of $300,000. For the replacement cost provisions of a homeowners contract to apply, Larry must carry how much minimum coverage? a. $190, b. $240, c. $300, d. $250, b. $240, The homeowners form that provides broad named peril coverage for the dwelling, other structures, and personal property is the a. HO- 3 b. HO- 4 c. HO- 2 d. HO- 6 c. HO- 2 John's home has a $100,000 claim for damage from a covered peril. The home is insured under a Homeowners policy for $150,000. At the time of the loss, the home's replacement cost is $250,000. How much will John's Homeowners policy pay for this loss?

a. $150, b. $75, c. $100, d. $250, b. $75, The special limits for theft losses apply to the following types of personal property except: a. clothing b. firearms c. jewelry d. silverware a. clothing The Homeowners policy form that provides open peril coverage on the dwelling and other structures, but only broad coverage on personal property is the a. HO- 3 b. HO- 4 c. HO- 2 d. HO- 6 a. HO- 3

The standard limit for liability in a homeowners policy is a. $200, b. 50% of the Coverage A limit c. $100, d. 40% of the Coverage A limit c. $100, Lesson 6: Auto Insurance Donald has an automobile policy with limits of $25,000 per person and $50,000 per occurence. An accident occurs and two people are injured, one with $25,000 in injuries and the other with $75,000 in injuries. If Donald is liable, what is the maximum amount his policy will pay? a. $50, b. $25, c. $75, d. $ a. $50, If a driver crashes into the house of a neighbor, the damage will be covered by the driver's a. Collision b. Comprehensive

c. Uninsured motorist d. Property damage liability d. Property damage liability All of the following losses are covered by a personal auto policy EXCEPT a. Theft b. Glass breakage c. Liability for damage to the insured's property d. Damage to the property of others c. Liability for damage to the insured's property Under a pure no-fault plan, each party to an auto accident a. Is reimbursed by his or her own insurance company b. Has the right to seek pain and suffering compensation c. Is reimbursed by his or her own insurance company, but could seek additional compensation if damages were higher than a certain amount d. Is reimbursed by the other party's insurance company a. Is reimbursed by his or her own insurance company All of the following statements regarding medical payments coverage provided by a personal auto policy are correct EXCEPT a. All reasonable medical expenses are covered up to the policy limit

b. Legal liability need not be proven for payment to be made Incorrect c. An insured struck by a vehicle while a pedestrian would not be covered d. Injuries must be incurred and reported within 3 years of an accident c. An insured struck by a vehicle while a pedestrian would not be covered Trailer Interchange coverage is a part of the a. Truckers coverage form and Motor Carrier coverage form b. Business Auto coverage form c. Garage coverage form d. Personal Auto policy a. Truckers coverage form and Motor Carrier coverage form All of the following losses are excluded under a commercial auto policy EXCEPT: a. Losses caused by worker's compensation b. Bodily injury to a fellow employee arising out of the use of a business auto c. Bodily injury caused by an undisclosed driver using an insured vehicle with permission d. Damage caused by a covered vehicle to the insured's office building c. Bodily injury caused by an undisclosed driver using an insured vehicle with permission Under the liability section of the personal auto policy, all of the following are considered persons insured EXCEPT a. The daughter of the insured while driving her boyfriend's car

b. The insured's neighbor who temporarily borrows the insured's car c. A coworker who borrowed the insured's car to run an errand d. The insured's employer if the insured used the employer's vehicle to run an errand for his employer c. A coworker who borrowed the insured's car to run an errand All of the following losses would be covered by a personal auto policy EXCEPT: a. A person injured while getting out of the insured's auto b. Bodily injury to a passenger who owns her own auto policy c. A medical payment claim reported 4 years after the accident causing the injury d. Injuries sustained by an insured who is struck by a car while walking across the street c. A medical payment claim reported 4 years after the accident causing the injury Which of the following would NOT be covered under the liability section of a personal auto policy? a. Bodily injury caused by the insured's negligence while driving a three-wheel all-terrain vehicle b. A trailer the insured vehicle is towing accidentally comes loose and causes injury to another person c. An accident caused by a friend of our son using the insured vehicle with his permission d. After a party, the insured causes an accident and is charged with driving under the influence of alcohol a. Bodily injury caused by the insured's negligence while driving a three-wheel all-terrain vehicle Lesson 7: Commercial Package Policy

The primary purpose of Business Income coverage is to reimburse the insured for a. Damage to accounts receivable records b. The cost of debris removal following loss from a covered peril c. Loss of income resulting from property damage at the insured's property d. Loss due to employee's work-related injuries c. Loss of income resulting from property damage at the insured's property Which of the following losses to equipment would be covered under the Equipment Breakdown Protection coverage? a. Damage that occurs while the equipment is undergoing a pressure test b. Damage caused by fire c. Damage resulting from a windstorm d. Damage from an explosion caused by the centrifugal force of moving parts d. Damage from an explosion caused by the centrifugal force of moving parts According to the concellation condition in the Common Policy Conditions form, if the insurance company is cancelling a Commercial Package policy for nonpayment of premium, the insured must be given at least how many days notice of cancellation? a. 30 b. 60 c. 14

d. 10 d. 10 The dishonest taking of property while placing another person in fear of physical violence best describes: a. Burglary b. Robbery c. Theft d. Larceny b. Robbery Personal business property left out in the open is covered under a commercial property policy only while a. Located within eyesight of the described premises b. Specifically described on the declarations c. Within 50 feet of the described premises d. Within 100 feet of the described premises d. Within 100 feet of the described premises What is the primary difference between a claims-made and occurrence form of a CGL policy? a. The claims made form provides coverage only for events that take place during the policy period b. The claims made policy provides coverage for claims first made during the policy period

c. The occurrence form provides coverage for claims that occur after the expiration of the policy using a tail Incorrect d. The occurrence form is issued with an aggregate limit and the claims made form is not b. The claims made policy provides coverage for claims first made during the policy period The owner of a Laundromat who dry-cleans clothing belonging to others would purchase which of the following? a. Transportation Floater b. Trip transit c. Bailee policy d. Commercial floater c. Bailee policy In which of the following instances would coverage be triggered under a claims made form? a. When a claim is reported and filed b. When a covered employee is injured on the job c. When bodily injury to others occurs following a retroactive date, if any d. When injury or damage occurs during the policy period a. When a claim is reported and filed An auto repair person forgets to replace the oil drain plug in a customer's engine that results in a loss of oil during the next several days. The loss of oil causes the engine to seize. Which of the following coverages would protect the repair person in this situation?