Louisiana Personal Lines Insurance Exam
Questions and Answers
1. 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.
2. 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
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,homeowners policy, which of the following statements would be
correct?
a) The endorsement becomes primary coverage and the HO
contract is sec- ondary.
b) Coverage C limits will no longer apply to the jewelry insured by the
endorse- ment.
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.
3. 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
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,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.
4. 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.
5. In a personal auto policy, the medical payments coverage is similar
to
a) Accident insurance, because it pays medical expenses regardless of
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, 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.
6. 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.
7. All of the following are supplemental payments included in the
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Questions and Answers
1. 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.
2. 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
1/
65
,homeowners policy, which of the following statements would be
correct?
a) The endorsement becomes primary coverage and the HO
contract is sec- ondary.
b) Coverage C limits will no longer apply to the jewelry insured by the
endorse- ment.
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.
3. 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
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65
,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.
4. 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.
5. In a personal auto policy, the medical payments coverage is similar
to
a) Accident insurance, because it pays medical expenses regardless of
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, 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.
6. 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.
7. All of the following are supplemental payments included in the
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