Louisiana P&C Insurance Exam Review set one with Complete Solutions

Which one of the following statements about insurance contracts is true? - ANSWER-They are personal contracts because they insure people, not property. Insurance policies are considered to be unilateral - ANSWER-because only the insurance company is legally bound to perform its part of the agreement. While both the insured and the insurer must give consideration, it need not be equal. The policy provisions are prepared by the insurer, with little or no input from the insured Which part of an insurance policy sets the rules of conduct, duties, and obligations of the insured and insurer under the terms of the contract? - ANSWER-Conditions. Policy conditions - ANSWER-set provisions, rules of conduct, and obligations for the parties. Information about the premium and policy limits, the identity and address of the named insured, and the policy period is found in what part of an insurance policy? - ANSWER-Declarations. The declarations section of a policy includes - ANSWER-the identity and address of the named insured, the policy term or period, the amount of insurance, the premium and any applicable deductibles. Which part of an insurance policy describes what is covered and the perils the policy insures against? - ANSWER-Insuring Agreement The Insuring Agreement states - ANSWER-in general terms the types of losses that are covered, the property covered and the perils against which it is insured. Most insurance policies contain five parts - ANSWER-Declarations, Insuring Agreements, Conditions, Exclusions, and Definitions. An insurance policy is a legal contract. Each of the following elements is necessary for formation of a valid contract - ANSWER-Consideration, agreement, competent parties. Four elements are necessary for formation of a contract: - ANSWER-agreement (offer and acceptance), consideration, competent parties, and a legal purpose.