Louisiana P&C Insurance Exam Review set one (100% Verified with correct answers)

Which one of the following statements about insurance contracts is true? correct answers They are personal contracts because they insure people, not property. Insurance policies are considered to be unilateral correct answers 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? correct answers Conditions. Policy conditions correct answers 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? correct answers Declarations. The declarations section of a policy includes correct answers 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? correct answers Insuring Agreement The Insuring Agreement states correct answers 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 correct answers 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 correct answers Consideration, agreement, competent parties. Four elements are necessary for formation of a contract: correct answers agreement (offer and acceptance), consideration, competent parties, and a legal purpose. In the property and casualty insurance field, the principle of making someone 'whole' again after a loss, by paying only for actual losses, is called correct answers indemnity. Most property and liability insurance is written on an indemnity basis -- correct answers the intent being to make someone 'whole' again by paying actual losses while preventing any gain.