Louisiana Personal Lines *See Desc* (Questions with 100% correct solutions)

The insurer's duty to defend the insured, as provided by Section II of a Homeowners policy, ends: A) When the insured admits they were negligent B) When the damages awarded against the insured exhaust the personal liability limit C) If the insured becomes bankrupt or insolvent D) If the claim is groundless correct answers When the damages awarded against the insured exhaust the personal liability limit Reasoning: Once the Coverage E limit is exhausted by the payment of damages for bodily injury or property damage awarded against the insured, the insurer's duty to defend ends. Under the Bankruptcy condition, bankruptcy or insolvency of the insured does not relieve the insurer of its obligations under the policy. J has a Homeowners policy written on the HO-3 form. Which of the following people would not be considered an insured on J's policy? A) A friend who is renting a bedroom in J's house since it is only three blocks away from work B) J's resident uncle C) J's daughter away at college in another state D) A friend's 16-year-old daughter who is staying with J's family while going to school correct answers A friend who is renting a bedroom in J's house since it is only three blocks away from work Reasoning: The definition of insured included in the policy does not include tenants, so the friend would not be covered under J's policy. The friend would need their own insurance for personal property and liability. Unrelated people in the insured's care are considered insureds up to age 21 Water damage caused by which of the following could be a covered loss under a Dwelling policy? A) Overflow of water from a sump pump B) Discharge of water caused by a plumbing failure C) Leaks through a driveway D) Water below the surface of the ground seeping through the dwelling correct answers Discharge of water caused by a plumbing failure Reasoning: Accidental overflow or discharge of water from a plumbing system, other similar household system, or a household appliance is a covered peril under the Broad and Special forms. The Water exclusion includes losses resulting from flood or tidal water, water that backs up or overflows from a sump pump or drain, and water underground that seeps through a building or driveway.