LOUISIANA PROPERTY AND CASUALTY INSURANCE EXAM|WITH COMPLETE SOLUTIONS|ALREADY GRADED A|DOWNLOAD TO PASS

Driver A has a personal auto policy with Part C: UM/UIM limits of 100/300. He is injured by Driver B who has Part A: Bodily Injury Liability limits of 50/100. It is determined that Driver B is at fault for the accident. Driver A has $125,000 in medical expenses. How much will his Part C: UM/UIM coverage pay? a) $125,000 b) $75,000 c) $50,000 d) $25,000 c) $50,000 Underinsured motorist coverage acts as excess over the at-fault motorist's coverage. It will pay the difference between the insured's UIM limits and the at-fault driver's bodily injury limits (in this scenario, $100,000 of the insured's coverage minus $50,000 of the other driver's). Because of the per person limits of Driver A's underinsured motorist coverage, the policy will pay the amount necessary to bring payment up to the per person limit. The policy will not pay more than the limits of liability. 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? a) The endorsement becomes primary coverage and the HO contract is secondary. b) Coverage C limits will no longer apply to the jewelry insured by the endorsement. c) The amount of coverage will be doubled. d) The endorsement becomes excess coverage. b) Coverage C limits will no longer apply to the jewelry insured by the endorsement. When items are scheduled, they are excluded from Coverage C as insured items, and are covered only under the scheduled personal property endorsement. Which of the following terms refers to a person's ability to do some work or the need to do alternative work? a) Temporary total disability b) Temporary partial disability c) Permanent partial disability d) Permanent total disability b) Temporary partial disability The insuring agreement is the part of the policy structure that describes the insured perils and the method of indemnification. Which of the following statements is NOT true regarding a personal umbrella liability policy? a) It provides excess liability coverage over underlying personal liability. b) It provides errors and omissions coverage for an agency. c) It may cover certain exposures not provided under the primary layer. d) It may require the payment of a self-insured retention. b) It provides errors and omissions coverage for an agency. Personal umbrella policies cover the personal exposure of the insured. Errors and omissions coverage is provided only in a professional liability policy. A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true? a) The entire loss is payable to the insured. b) The loss is payable to the insured and the mortgagee. c) The mortgagee should submit a claim to its insurer, and the insured should submit a claim to the HO policy. d) The entire loss is payable to the mortgagee. b) The loss is payable to the insured and the mortgagee. Loss is payable to the insured and mortgagee to protect the mortgage company's interest. This prevents the insured from cashing the check and not completing repairs. Under which type of coverage does the insurer agree to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement? a) Bodily injury liability policy b) Contractual liability policy c) Personal liability policy d) Property damage liability policy b) Contractual liability policy With this coverage, the insurer agrees to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement. In a personal auto policy, the medical payments coverage is similar to a) Accident insurance, because it pays medical expenses regardless of fault. b) Accident insurance, because it has the same limits. c) Bodily injury coverage, because it pays the insured's doctor bills. d) Bodily injury coverage, because it provides legal protection if the insured causes injuries to others. a) Accident insurance, because it pays medical expenses regardless of fault. Medical payments will pay for accidental bodily injury of an insured, regardless of fault or auto. It will pay medical expenses of others occupying the insured auto. The designation symbols used in commercial auto policies can be found in which policy section? a) Conditions b) Covered Auto c) Liability Coverage d) Definitions b) Covered Auto Section I - Covered Auto of a commercial auto policy explains the designation symbols used in that coverage. Which of the following liability exposures is most likely for a small specialty clothing retail boutique? a) Operations liability exposure b) Product liability exposure c) Completed operations liability exposure d) Premises liability exposure d) Premises liability exposure The premises liability exposure exists when there is use of the premises. Operations liability exposure relates to activities in addition to use. Product liability exposure is the possibility that the public might be injured by the product. Completed operations liability refers to liability for work already performed or completed. For a boutique retail store, the only possible liability would arise from customer injury while on the premises. All of the following are true of Coverage B - Other Structures EXCEPT a) It must be added by endorsement to a homeowners policy. b) This coverage is not applicable on the HO-4 policy form. c) The amount of coverage provided by Coverage B is an amount equal to 10% of Coverage A. d) Land where the other structures are located is not covered. a) It must be added by endorsement to a homeowners policy. Homeowners policies automatically provide an amount of insurance in Coverage B that is equal to 10% of the amount written as Coverage A. This amount may be increased by endorsement. All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT a) Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. b) Up to $200 a day for loss of earnings due to attendance at hearings or trials. c) Premiums on appeal bonds in any suit the insurer defends. d) Up to $250 for bail bonds required because of a covered accident. a) Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. A personal auto policy does not pay the cost of the release of a vehicle impounded by a law enforcement agency. A large antenna is damaged when a tree branch hits an insured farm dwelling during a storm. Coverage A of a farm property coverage form would insure damages for this occurrence up to a) $1,000. b) $2,000. c) $3,000. d) $4,000. Antennas, towers, and satellite dishes attached to the dwelling are covered under Coverage A, but have a special limit of insurance of $1,000 in any 1 occurrence. a) $1,000. Antennas, towers, and satellite dishes attached to the dwelling are covered under Coverage A, but have a special limit of insurance of $1,000 in any 1 occurrence. Charla wants to serve as a producer for Commissions Galore Insurance Company. In addition to obtaining her producer's license, what else must happen before she can officially transact insurance for CGIC? a) She must submit a list of 5 references to CGIC. b) She must be appointed by the Commissioner. c) She must be appointed specifically by CGIC. d) She must get a certificate of authority. c) She must be appointed specifically by CGIC. Before a producer can serve as an agent for a given insurance company, the producer must first be appointed by the company. The main difference between an HO-4 and an HO-6 is a) HO-6 provides limited dwelling coverage as well as contents coverage. b) HO-4 does not cover additional living expenses. c) HO-6 does not cover additional living expenses. d) HO-4 provides limited dwelling coverage as well as contents coverage. a) HO-6 provides limited dwelling coverage as well as contents coverage. HO-4 provides no dwelling coverage because a tenant does not own the dwelling; the condo owner does own the condo and is provided with coverage for improvements. Both HO-4 and HO-6 cover theft and additional living expenses. Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses? a) Insuring agreement b) Additional coverage c) Exclusions d) Declarations b) Additional coverage The additional coverage portion of a policy provides an additional amount of coverage for specific loss expense, at no additional premium. Which of the following would not be a violation of Louisiana insurance regulations? a) Producer B charges his clients, in addition to the premium, a consulting fee. b) Producer C uses her license to write uncontrolled business only. c) Producer D collects premiums due on policies and deposits the funds in his own personal account. d) Producer A uses her license to write only insurance for herself and her immediate family. b) Producer C uses her license to write uncontrolled business only. The purpose of a license is to primarily write non-controlled business. A claim is considered to have been made a) When notice is received and recorded by the insurer. b) When notice is received and recorded by any insured or the insurer, whichever comes first. c) When received in writing or telephonically by the insurer. d) When notice is received by any insured. b) When notice is received and recorded by any insured or the insurer, whichever comes first. This is a standard claims-made condition. When Commercial Crime Coverage Form M - Safe Depository Liability is written, what must be attached to the policy? a) The Robbery and Safe Burglary Provisions b) The General Provisions c) The Safe Depository General Provisions d) The Safe Depository Direct Loss Provisions c) The Safe Depository General Provisions When this coverage is written, the Safe Depository General Provisions must be attached to the policy instead of the general provisions. Which of the following is NOT a goal of risk retention? a) To increase control of claim reserving and claims settlements b) To fund losses that cannot be insured c) To minimize the insured's level of liability in the event of loss d) To reduce expenses and improve cash flow c) To minimize the insured's level of liability in the event of loss Retention usually results from three basic desires of the insured: to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured.