Property & Casualty Insurance
A large antenna is damaged when a tree branch hits an insured farm dwelling during a storm. Coverage A of a farm property coverage form would insure damages for this occurrence up to
$1,000
The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to
90 days
In a personal auto policy, the medical payments coverage is similar to
accident insurance because it pays medical expenses regardless of fault
The commercial general liability coverage form excludes bodily injury or property damage that the insured has assumed under any contract or agreement. However, the exclusion does not apply to certain types of contracts, as long as the injury or damage occurs
after the execution of the contract
Which of theses is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur?
aggregate limit of liability
What type of coverage do umbrella policies provide?
excess coverage over an underlying or primary policy
Which of the following statements would be an example of a product liability claim?
faulty packaging of a cereal caused spoilage that resulted in someone getting sick
Bill made a living as an insurance producer at one time but is no longer licensed. Under which of the following circumstances would it be acceptable for him to accept a commission?
if he receives a deferred commission from insurance that he transacted while he was licensed
When would a misrepresentation on the insurance application be considered fraud?
if it is intentional and material
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
illegal
Duties of the insurer found in property policy conditions include all of the following EXCEPT
notify the insured in the event of financial difficulty
Which coverage would a business owner need in a crime policy to cover money that may be stolen from a messenger?
outside the premises
In comparison to consumer reports, which of the following describes a unique characteristic of investigate consumer reports?
the customer's associates, friends, and neighbors provide the report's data
An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay?
$1,000
The minimum fine for violating the Insurance Code is
$1,000
A temporary license in this state is valid for
180 days
Which federal act provides benefits to injured civilians who are employed by the federal government?
Federal Employees Compensation Act
Who would participate in a WYO program?
Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis
This state provided for a temporary license for all of the following EXCEPT
a producer's retirement
All of the following are penalties for violating the statutes pertaining to sharing of commissions EXCEPT
additional continuing education in ethics
Which of the following best describes liberalization clause in a policy?
changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium
In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?
first named insured
Persons covered under an insurance policy, whether named or not, are known as the
insureds
All of the following are true of Coverage B- Other Structure EXCEPT
it must be added by endorsement to a homeowner's policy
According to the Nationwide Marine definitions, risks that may be the subject of inland marine insurance include all of the following EXCEPT
large pleasure boats
Which of the following policy would automatically broaden coverage under a policy without requiring additional premium?
liberalization
Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following situations EXCEPT
on his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
only written statements can be considered fraud
An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?
per occurrence
The causes of loss insured against in an insurance policy are known as
perils
The purpose of insurance regulation is to
promote the public welfare
In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called
self-insured retention
Which policy condition in HO policies states that insurance applies separately to each insured?
severability of insurance
The contents coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks?
the difference in the actual cash value as a pair and as a single
When an individual purchases insurance, what risk management technique is he or she practicing?
transfer
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
twisting
The Association is obligated to pay up to $10,000 for claims seeking return of unearned premium on
1. property insurance policies 2. casualty insurance policies 3. workers compensation policies
If authorized to write life and property and casualty insurance, how many hours of continuing education instruction are producers required to complete every 2 years?
24
If an insurer intends to nonrenew a property or casualty insurance policy, how much more notice prior to the expiration of the policy must be given to the insured of this intention?
30 days
When a resident producer changes his residence address, the Insurance Department must be notified within
30 days
A notice of cancellation, for a reason other than nonpayment, is only effective if mailed or delivered to the name insured at least
30 days prior to the date of cancellation
If an insurer is nonrenewing a Homeowners policy, it must mail or deliver to the insured written notice of its intention at leastt
30 days prior to the expiration date
The Commissioner is elected to a term that lasts for
4 years
What is the maximum number of roomers or boarders for properties insured under the dwelling policy?
5
If an insurer is nonrenewing a Homeowners policy, it must mail or deliver to the insured written notice of its intention at least
60 days prior to the expiration date
A businessowners policy is
A self-contained prepackaged policy.
Which of the following is NOT considered an insured contract under the commercial general liability?
a written agreement which indemnifies a person for fire damage to the premises rented to the insured
Which of the following individuals must be licensed as an insurance agent?
an employee of an insurer who receives commissions only on a few policies a year
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
apparent
An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?
benefits will be provided if the state was listed on the policy information
If the Commissioner believes that a producer may be in violation of an insurance law or regulation, what may be issued?
cease and desist order
A France-based insurer would like to do business in Louisiana. What document must it first receive?
certificate of authority
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of
coercion
A builder's risk form is most often written as which of the following?
completed value form
In Louisiana, automobile liability insurance is considered to be
compulsory coverage
An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?
consequential
Which of the following statements is true concerning underinsured motorist coverage under a personal auto policy?
coverage applies only to the extent that the underinsured motorist limits exceed the bodily injury limits carried by the operator of the other vehicle
Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy?
damage to the dwelling caused by ash or dust from a volcanic eruption
The commercial property declarations page contains which of the following information?
description of the property insured
Which of the following is not include in a binder or temporary contract for a Standard Fire Policy?
effective hour that coverage commences
If the premium charged for a particular insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses a(n)
experience rating plan
The major portion of the premium for an equipment breakdown policy pays
for inspections and examinations
In liability insurance policies, supplementary payments are made
in addition to the limit of liability
A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true?
loss by vandalism and malicious mischief is excluded
Which of the following would be covered under the crime coverage inside the premises-theft of money and securities?
loss or damage to a locked safe, vault, or cash register
Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover
losses due to the insured's negligence
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
mutual
An insured owns and operates a commercial business. He has included a business income coverage form with his commercial package policy. When the insured's business is severely damaged by fire, the business income coverage will pay for
net income plus continuing expenses of the building
B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit?
personal and advertising injury liability
If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit?
personal and advertising injury liability
All of the following are additional liability coverage automatically provided in a homeowners policy EXCEPT
personal injury
Section I of a boatowners policy covers
physical damage
Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to
property and liability losses
What type of damages may be awarded by the court to crate disincentives that discourage behavior that is deemed highly undesirable society?
punitive
All of the following are true regarding rebates EXCEPT
rebates are allowed if it's in the best interest of the client
Any inducement offered in the sale of insurance products that is not specified in the policy is
rebating
A produce in another state wants to become a producer in Louisiana. The other state gives the same privileges to Louisiana producers wanting to be licensed in that state as it does to its own producers. Louisiana, therefore, extends the licensing privileges to the prospective producer of the other state. What is this called?
reciprocity
All of the following may be covered by the miscellaneous type vehicle endorsement EXCEPT
rented recreational vehicles
When the insured's car was totaled in a recent accident, the ownership of the car was transferred to the insurer. The insurer then sold off the wrecked car to recover some of the loss it paid to the insured. What is the term for this action?
salvage
Greg owns several buildings, each at a different location and insured on a separate policy. What type of coverage does Greg have?
specific
A property insurance policy that is not subject to any coinsurance requirements but has a set amount of insurance scheduled for the property would use what loss valuation method?
stated amount
The amount an insurer will pay under Coverage D (Loss of Use) depends on
the amount of coverage on the dwelling
A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true?
the damage occurred when the concrete fell
Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS
the insured had drained the plumbing system
Personal property coverage under a homeowners policy would cover
the insured's camera if it is stolen while the insured is on vacation
A trucking business swaps trailers with other carriers. What coverage is necessary to cover loss to the other's trailer while in the borrower's possession?
trailer interchange coverage
Liability imposed on one party as a result of the actions of another person is known as
vicarious liability
A producer's license has been revoked for a violation of the Insurance Code. When can the producer apply for a new license?
within 1 year of revocation
To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form?
MCS-90
Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises?
$500
The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will
apply to injuries of any guests or visitors
According to the Fair Credit Reporting Act, all of the following would considered negative information about a consumer EXCEPT
disputes regarding consumer report information
Which of the following would modify the original insurance contract by either adding or removing coverage?
endorsements
What is the name for the type of property damage coverage that protects the insured or the covered auto in an accident with someone who does not have coverage?
uninsured motorist
An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some of furniture and clothes in the house. From an insurance standpoint, the insured's house is considered
unoccupied
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT
up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident
Supplementary payments on a CGL provide al of the following EXCEPT
up to $500 a day for lost earnings and $2,000 for the cost of bails bonds
A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered
vacant
Which of the following losses would NOT be covered by the dwelling policy if the dwelling is vacant for over 60 days?
vandalism
Which of the following homeowners policies covers those who rent their dwelling?
HO-4