LOUISIANA PERSONAL LINES EXAM QUESTIONS
WITH CORRECT ANSWERS 2025/2026
What is risk - CORRECT ANSWER -the chance something harmful or unexpected could happen
What is risk avoidance - CORRECT ANSWER -avoiding an activity or behavior that would increase
risk
What is risk retnetion - CORRECT ANSWER -an individual or organization's decision to take
responsibility for a risk it faces, as opposed to transferring the risk to an insurance company by
purchasing insurance
What is risk sharing - CORRECT ANSWER -when risk is shared between two or more parties
What is risk reduction - CORRECT ANSWER -mitigating potential losses by reducing the likely
hood and severity of a possible loss
What is risk transfer - CORRECT ANSWER -shifting risk from one party to another
What is a peril - CORRECT ANSWER -cause of loss insured against an insurance company
What is a hazard - CORRECT ANSWER -a factor or activity that may cause or exacerbate a loss
What is a loss - CORRECT ANSWER -damage or injury that the insured suffers due to an accident
or misfortune
What is the difference between domestic, foreign, and alien insurance companies - CORRECT
ANSWER -1- domestic- one that is formed in the state in which its doing business
, 2- foreign- is one that is based on one state and doing business in another
3- alien- is one that is based in another country but is doing business in the US
What are the 5 elements of a contract - CORRECT ANSWER -consideration, competent parties,
legal purpose, offer, and acceptance
What is the difference between expressed, implied, and apparent - CORRECT ANSWER -express-
authority that has been granted orally or in writing
Implied- authority to preform acts identical to to reasonably necessary to carry out the
transaction for which they have express authority
Apparent- authority that the public believes the producer must speak on behalf of the company
(the producer's word is the insured's word)
Producer - CORRECT ANSWER -insurer
Agent - CORRECT ANSWER -second party
Policy holders - CORRECT ANSWER -third party
Indememnity - CORRECT ANSWER -compensation for damage or loss. Insures indemnify
policyholders for certain unexpected events or losses up to a certain limit
What is fraud - CORRECT ANSWER -a deliberate deception intended to secure an unfai or
unlawful gain
WITH CORRECT ANSWERS 2025/2026
What is risk - CORRECT ANSWER -the chance something harmful or unexpected could happen
What is risk avoidance - CORRECT ANSWER -avoiding an activity or behavior that would increase
risk
What is risk retnetion - CORRECT ANSWER -an individual or organization's decision to take
responsibility for a risk it faces, as opposed to transferring the risk to an insurance company by
purchasing insurance
What is risk sharing - CORRECT ANSWER -when risk is shared between two or more parties
What is risk reduction - CORRECT ANSWER -mitigating potential losses by reducing the likely
hood and severity of a possible loss
What is risk transfer - CORRECT ANSWER -shifting risk from one party to another
What is a peril - CORRECT ANSWER -cause of loss insured against an insurance company
What is a hazard - CORRECT ANSWER -a factor or activity that may cause or exacerbate a loss
What is a loss - CORRECT ANSWER -damage or injury that the insured suffers due to an accident
or misfortune
What is the difference between domestic, foreign, and alien insurance companies - CORRECT
ANSWER -1- domestic- one that is formed in the state in which its doing business
, 2- foreign- is one that is based on one state and doing business in another
3- alien- is one that is based in another country but is doing business in the US
What are the 5 elements of a contract - CORRECT ANSWER -consideration, competent parties,
legal purpose, offer, and acceptance
What is the difference between expressed, implied, and apparent - CORRECT ANSWER -express-
authority that has been granted orally or in writing
Implied- authority to preform acts identical to to reasonably necessary to carry out the
transaction for which they have express authority
Apparent- authority that the public believes the producer must speak on behalf of the company
(the producer's word is the insured's word)
Producer - CORRECT ANSWER -insurer
Agent - CORRECT ANSWER -second party
Policy holders - CORRECT ANSWER -third party
Indememnity - CORRECT ANSWER -compensation for damage or loss. Insures indemnify
policyholders for certain unexpected events or losses up to a certain limit
What is fraud - CORRECT ANSWER -a deliberate deception intended to secure an unfai or
unlawful gain
