Louisiana Property and Casualty

On an HO policy, if the insured has to stay in a hotel after a covered loss, the insurer will pay his

"Additional Living Expenses".

"Other than Collision" coverage is also known as

"Comprehensive" coverage.

If a policy is vague, all doubts will be resolved against the insurer. This is called the?

"Doctrine of Adhesion".

If a bird hits your windshield, the windshield is covered under

"Other than Collision" on a PAP.

On an HO-3, coverage for debris removal is provided as a Section I

"additional coverage". It is not covered under Coverage A.

An HO-4 provides coverage for

"broad form" perils.

On a dwelling property policy, if wind knocks out the electric power to your house and the meat in your freezer spoils, it is covered as a

"consequential" loss.

The Insuring Clause states that

"coverage is provided in consideration of . . ."

Making a false, or maliciously critical or derogatory statement as to the financial condition of any insurer is known as?

"defamation".

A system of selling insurance via advertising and mail solicitations is known as

"direct response".

Except for an employer's intentional acts, workers compensation is the?

"exclusive" remedy for employees who suffer occupational injury or disease.

A condition that could result in a loss is known as an?

"exposure".

The authority a producer has that is written in his contract is known as?

"express" authority.

UM will cover injuries caused by a?

"hit and run" driver, although the injured party bears the burden of proving that their injury was caused by a driver whose identity is unknown.

Notice of claim must be provided

"immediately" on a property insurance policy.

The loss of business income that results when a fire damages the inventory of a business is considered to be an

"indirect" loss.

A dishonest person presents a?

"moral hazard".

The name of the exclusion that requires the insured to protect and preserve the property after a loss is

"neglect".

The liability coverage on a BOP is written on an

"occurrence" basis, not a "claims made" basis.

When dangerous chemicals cause damage to property over a period of time, it is considered to be an

"occurrence".

A requirement for a valid contract is?

"offer & acceptance," or mutual agreement.

All-risk property policies are also known as

"open peril" policies.

The name of the provision that applies when more than one property policy covers the same claim is the

"other insurance" clause.

When a policy limits the most it will pay for injury to any person, it is known as a

"per person" limit.

When it is the insurer who cancels the policy, the refund of unearned premium is calculated on a

"pro rata" (proportionate) basis.

Giving or paying as an inducement to the purchase of insurance anything of value not stated in the policy is considered to be?

"rebating".

An unincorporated association of individuals who insure each other is known as a?

"reciprocal" insurer.

Voiding a contract due to misrepresentation is called a

"rescission."

A Standard Fire Policy may be cancelled by the named insured at any time, in which case the insurer must refund unearned premiums paid on a?

"short rate" basis.

A liability policy written to apply to all claims that occur during the policy period is known as a

"single limit" policy.

Named peril property policies are also known as

"specified" peril policies.

Workers compensation will pay an employee who is?

"temporarily totally disabled" 66 2/3% of their wages during the period of such disability.

On a PAP, after a covered OTC or collision loss, the insured is entitled to

"transportation expenses", up to a specified amount as stated in the policy.

When the furniture and contents remain, but the occupants are gone, a dwelling is considered to be

"unoccupied".

Fine Arts Floaters are

"valued" and require no claims adjustment after a loss.

When an insurer voluntarily gives up the right to obtain information that they are entitled to, they have made a

"waiver".

Section II (liability) of an HO policy includes an "additional coverage" that will pay, at replacement cost, up to

$1,000 per occurrence for property damage to the property of others caused by an insured.

Under Section II (liability) of an HO, loss assessments made against an insured by a property owners association (POA) as a result of bodily injury are covered up to

$1,000, but not assessments made by governmental bodies.

The P&C Guaranty Association will honor unearned premium refunds up to?

$10,000.

Commercial Plate Glass coverage is limited to

$100 per plate/$500 per occurrence.

To satisfy the compulsory liability requirements, an auto liability policy must be written with limits of at least?

$15,000 bodily injury per person, $30,000 bodily injury per occurrence and $25,000 for damage to the property of others, per occurrence.

Under auto UM, the minimum coverage for one person injured by an uninsured motorist is

$15,000.

An insured purchased a Dwelling policy with a $20,000 coverage A limit and a 4% automatic increase in insurance endorsement on January 1st. If the insured has a claim on July 1st what is the policy limit?

$20,400. This endorsement will increase the coverage A limits 4% per year and will apply on an accrued basis throughout the year if a claim occurs.

On an HO-3, after a covered loss, if the insured incurs additional living expenses of $700 a month, but his normal living expenses are $500 a month, the insurer will only pay the difference of

$200 a month.

If an insured with a $1,000,000 umbrella lets his $300,000 primary policy lapse and then has a covered claim of $500,000, the umbrella will only pay

$200,000.

Any licensee who fails to file a timely license renewal shall be charged a?

$25 late fee.

Supplementary payments on a PAP include

$250 for bail bonds, the premiums on appeal bonds, accrued interest on judgments and $200 a day Loss of Earnings for trial appearances.

The standard deductible on most Property policies is

$250 per occurrence.

The maximum coverage permitted under the "regular" NFIP program is

$250,000 for a single-family home.

The minimum deductible found in an earthquake policy is

$250.

Under the TRIA, the insurance industry as a whole must cover a certain amount of the losses through deductibles and co-payments. This amount, which is known as the aggregate retention, is currently?

$27.5 billion.

On UM coverage, the minimum limit for injury to more than one person caused by an uninsured motorist is

$30,000

NFIP First-tier Flood insurance (emergency program) is only available up to

$35,000.

The standard deductible on a federal flood insurance policy is

$500 per occurrence, applying separately to the dwelling and the contents.

The standard deductible available on a BOP is

$500, although a higher deductible may be chosen to reduce the premiums.

All HO policies provide coverage related to credit card losses up to

$500.

Posting a bond or depositing cash or securities in the amount of $______ will satisfy the compulsory auto liability requirements?

$55,000

If an insured carries these minimum limits, the most an insurer would pay out on behalf of an insured who was involved in an at-fault accident for BI and PD to others per occurrence would be?

$55,000, not counting the cost of defense.

An HO-3 purchased to cover a $100,000 dwelling on a replacement cost basis would have to be written with a limit of at least

$80,000 in order to satisfy the coinsurance requirement.

If a property has a $100,000 replacement cost value an insured should carry a minimum policy limit of

$80,000 in order to satisfy the coinsurance requirement.

On a Business Auto policy, to properly insure the owner of a leased vehicle, add the optional endorsement entitled

'Additional Insured - Lessor'.

A list of risks eligible for inland marine insurance published by theNational Association of Insurance Commissioners (NAIC) is known as the

'Nationwide Definition'.

The DP-1 Basic form does not provide

'additional living expenses' under coverage D. Only Fair Rental Value is provided.

When Workers Compensation may be purchased from the state fund or from any other authorized insured, it is known as

'competitive'.

On a Business Auto policy, damage to an insured vehicle caused by a falling object would be covered under

'comprehensive' coverage.

After a loss, if the cost of reconstructing a home exceeds its market value, the insurer will consider it to be a

'constructive' total loss.

Fire damage is an example of a

'direct' loss.

On a Business Auto Policy, if the employer wants coverage while their employees are driving their own cars on company business, they need to add

'hired and non-owned auto' coverage.

On an HO policy, cemetery plots of the insured are considered to be an

'insured location'.

An insurer must pay a liability claim if the insured is

'legally liable' (negligent).

Insurers may change policies for the better without a premium charge under a provision known as

'liberalization'.

When Workers Compensation must be purchased from a state fund, it is known as

'monopolistic'.

On an HO policy, an accident that results in bodily injury or property damage is defined as an

'occurrence'.

On a PAP, damage caused by wind is covered as an

'other than collision' loss.

On a Business Auto Policy, if the employer's partner drives their own car on company business, they need to add

'owned auto coverage'.

When there is a direct chain of events between an act and the resulting injury or damage, you could say that that event was the

'proximate' cause.

Gross negligence could result in

'punitive' damages, which are not covered by insurance.

On Garage insurance, car dealers who have fluctuating inventories should utilize

'reporting' forms.

When policy limits are reinstated after a claim, it is known as

'restoration' of limits.

Property policies do not cover

'sewer backup' (meaning storm sewers).

When it is the insured who requests cancellation mid-term, the refund of unearned premium is calculated on a

'short-rate' basis.

Business income insurance is a type of

'time element' coverage.

There are three Dwelling Policy forms

(DP-1, DP-2 and DP-3).

Business entities must designate at least?

1 individually licensed producer to be responsible for the entity's compliance with state insurance laws and regulations.Insurance is regulated primarily by?-state law, which may vary by state.

After a commercial policy has been in effect for more than 60 days or after the effective date of a renewal, no insurer shall cancel unless the cancellation is based upon:

1) Non-payment of premium; 2) Fraud or material misrepresentation; 3) Increase in hazard; 4) Change in Risk; 5) The continuation of the policy endangers the insurer's solvency; or 6) A violation by the insured of any of the terms or conditions of the policy.

No insurer may cancel or fail to renew a HO policy or to increase the deductible on a policy that has been in effect and renewed for more than 3 years EXCEPT for:

1) non-payment of premium; 2) Fraud; 3) A material change in risk; 4) Two or more claims within 3 years; or 5) The continuation of the policy endangers the insurer's solvency.

An employer with an NCCI experience modification factor of

1.25 has had more than the average number of claims.

Regardless of the type of policy, cancellation for non-payment of premium only requires?

10 days' advance written notice.

Sole proprietors and bona fide corporate officers who own at least __% of the corporation's stock may by written agreement elect not to be by covered for workers compensation

10%

By law, LA Citizens is required to charge a policy premium that is at least?

10% higher than private insurance.

On an HO policy, Coverage 'B' (unattached structures) is

10% of Coverage 'A'.

The businessowners policy will cover extra expenses that occur within

12 consecutive months after the date of direct physical loss or damage. This coverage is not subject to the limit set for Section I.

On an HO, lawsuits may be filed by the insured against the insurer up to a maximum of

12 months after a loss.

An HO-3 may be written to insure a one-family dwelling with no more than

2 roomers or boarders.

If an insured with an HO-3 has to move to a hotel because an order of a civil authority prohibits the use of their residence premises as a result of fumes from a fire in a neighboring premises, the policy will pay the insured's additional living expenses for no more than

2 weeks.

On an HO policy, if a fire in a neighbor's house causes the fire department to evacuate the neighborhood, the insured's additional living expenses incurred will be covered for a maximum of

2 weeks.

Members of the P&C Guaranty Association are subject to proportionate assessments to pay the clams and expenses of the Association, up to a maximum of?

2% of their net direct written premiums for the preceding calendar year.

When invoking the right of Appraisal, the parties must select their appraisers within

20 days and the appraisers must select the umpire within 15 days.

When non-renewing an auto policy, insurers need only give?

20 days' advance notice.

Under the TRIA, individual insurance company losses are subject to a deductible of?

20% of their commercial property/casualty premiums. After the deductible, the federal government will pay 85% of covered claims and the individual insurer must pay 15%.

P&C producers must complete?

24 hours of approved CE hours prior to each license renewal, including at least 3 hours dedicated to flood insurance.

L&H producers must complete?

24 hours of approved CE hours prior to each license renewal, which includes 3 hours of ethics.

Liability on an HO covers outboard watercraft with

25 total horsepower or less automatically.

Insurers must pay "third-party" claims within?

30 days after obtaining a written agreement of claim

Insurers must pay valid third-party claims for property damage or medical expenses within?

30 days after obtaining a written agreement of claim settlement.

Insurers must pay valid first-party P&C claims within?

30 days after receipt of satisfactory proof of loss

All insurers shall make a written offer to settle any property damage claim within?

30 days after receipt of satisfactory proof of loss.

Insurers must pay "first-party" claims within?

30 days after receipt of satisfactory proof of loss.

Except for non-payment, auto insurers must mail notice of cancellation by certified mail at least?

30 days prior to the effective date.

Commercial insurers must deliver notice of any rate increase, change in deductible, or a reduction in limits or coverage at least?

30 days prior to the expiration date of the policy.

No insurer may non-renew a HO policy unless they deliver written notice to the named insured at least?

30 days prior to the expiration date of the policy.

When an insurer cancels an HO policy after it has been in force for more than 60 days, other than for non-payment of premium, they must give the named insured at least

30 days' advance notice.

A Standard Fire Policy may be cancelled by the insurer at any time by giving the named insured and the mortgagee, if any, at least how many days advance?

30 days' advance written notice, unless the cancellation is for non-payment of premium, in which case only 10 days' notice is required.

An HO policy covers your contents in full while moving, for up to

30 days.

The Commissioner must approve or disapprove certificate of insurance forms filed in writing within?

45 days of receipt of the form.

In order to be insured on a PAP, a van or truck must have a gross vehicle weight of

5 tons (10,000 pounds) or less.

On an HO, debris removal is covered up to

5% in addition to limits.

If an HO-3 is written with a policy limit of $40,000 on a home valued at $100,000, the insurer will only pay

50% of a $10,000 loss due to the coinsurance penalty.

If an HO policy is written to cover a 2-family dwelling (duplex), Coverage C - Personal Property is still

50% of the Coverage A dwelling limit.

Dwelling Property policies do not cover breakage of glass after

60 days vacancy.

When non-renewing a commercial policy, insurers must give the first-named insured?

60 days' advance written notice.

Loss of income is covered by Workers Compensation up to

66-2/3% of average weekly wages.

On the BOP, the Inflation Guard Endorsement increases policy limits on each policy anniversary date by

8% automatically.

The BOP is all-risk on both building and contents, and it contains an

80% coinsurance clause. It is written on a replacement cost basis and covers theft.

To have replacement cost coverage on a Dwelling Broad form policy (DP-2), the dwelling must be insured at least

80% to value, not 100%.

On Dwelling Fire and HO policies, the required coinsurance percentage is

80%.

Unilateral

A contract where only one party, the insurer, makes an enforceable promise is said to be:

The CGL Declarations contain two Aggregate Policy Limits:

A general aggregate for claims relating to BI and PD other than products and completed operations, and a separate aggregate for products and completed operations.

Lloyd's Association Lloyd's Associations are a group of unincorporated individuals who pledge their personal assets to underwrite risks that authorized insurers will generally not accept.

A group of individuals who band together to assume risks, where each individual is responsible only for the share of the risk they assumed is known as:

The Insurance Company

A producer is a representative of:

A fiduciary duty

A producer's obligation to act in an insurance applicant's or insured's best interest, based on the faith and trust placed on the producer by members of the insurance-buying public, is known as:

Changing provisions in the policy Only a company officer can approve changes in a policy requested by an insured.

A producer's responsibilities may include all of the following EXCEPT:

Binder

A property and casualty insurance producer frequently has the authority to provide temporary insurance coverage known as a:

A DP-2 Broad Form policy provides replacement cost coverage on the dwelling, but contents are covered on an

ACV basis.

A scheduled Personal Property Floater provides coverage on an

ACV basis.

An agreement between the insured and insurer to determine the value of the property in advance is known as

Agreed Amount Insurance and is often referred to as a Valued Policy.

It is a form of gambling because it may or may not pay off

All of the following are true about "insurance" EXCEPT:

Adhesion

An applicant for insurance must accept the entire policy as written or none of it under the Doctrine of __________.

Mutual company

An insurance company owned by its policyholders, who receive a return of unused premiums in the form of policy dividends, is a(n):

Life, Health and Accident Variable life and variable annuities Property Casualty Personal lines Title Credit Travel Limited life, health and accident Industrial fire Surety Bailbonds Surplus lines Any other line of insurance permitted under state law

An insurance producer may be licensed for one or more of the following lines of authority:

Domestic Insurer

An insurer incorporated under the laws of the state in which it is operating is considered to be a(n):

Acts of the insurer may lead the public to believe the producer has

Apparent authority of an insurance producer is the authority:

On an HO policy, coverage 'E' covers

BI and PD only.

Lawyers E&O does not cover

BI and PD, only claims for financial damages.

Auto insurers must offer coverage for, in not less than the limit of?

BI liability provided by the policy, Uninsured Motorist (UM) and Underinsured Motorist (UIM) to protect insureds who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles because of bodily injury, including death.

Aviation liability policies provide coverage for

BI, PD and medical, but do not cover 3rd party loss of earnings.

The BOP automatically covers business liability for

BI, PD, personal injury, advertising, fire legal liability and medical.

Manufacturing companies are not eligible for a

BOP.

Contracts of adhesion

Because an insurer writes the policy language and the insured has little or no control over the content, any ambiguity in the wording is usually resolved in favor of the insured. Because the design and wording of a policy are in the hands of the insurer, insurance policies are said to be:

Tom Even though Beth filled out the application, she was filling out Tom's information, and Tom is required to sign the application. Additionally, it was Tom who had to provide the initial premium in order for the policy to be issued. Tom made the offer, and the insurer accepted the offer by issuing the policy.

Beth, who is an insurance producer, fills out an insurance application for Tom. If the insurance company Beth represents issues a policy, who made the offer:

Malpractice Liability provides medical professionals

Bodily Injury liability.

On Commercial Property insurance, signs that are not attached to the building are covered as

Business Personal Property.

The elements of a legal contract may be remembered by the acronym?

C-O-A-L (consideration, offer, acceptance, legal purpose and legal capacity).

Supplemental ERPs are also available on a

CGL for an additional premium. When purchased, this allows the claimant an indefinite period in which to turn in a claim that occurred during the policy period.

Insurers must keep their books and records available for the?

Commissioner's review for five years.

On an HO-3, Coverage 'B' - Other Structures is automatically 10% of the

Coverage 'A' Dwelling limit.

The retroactive date on a claims-made CGL only applies to

Coverage A (BI and PD).

Coverage D on a PAP is called

Coverage for Damage to Your Car and is optional. It is divided into Collision and Other Than Collision. Coverage D is written on an ACV basis and has a deductible.

The four parts of a policy may be remembered by the acronym

D-I-C-E (Declarations, Insuring agreement, Conditions and Exclusions).

Inflation guard, also known as the automatic increase endorsement, must be added to a

DP policy by endorsement. It applies to Coverage A (Dwelling) and Coverage B (Other Structures).

The DP-3 policy will provide the same coverage as the

DP-2 (contents broad) for personal property coverage, should coverage for contents be declared.

To properly insure computer equipment, buy a

Data Processing Floater.

The Limits of Liability are found on the

Declarations Page of the policy.

The policy limit on a property policy is shown on the

Declarations page.

Employers may elect to self-insure for workers compensation by depositing with the?

Director proof of their financial ability to pay claims, including depositing securities or a surety bond and by providing proof of excess coverage.

When a question refers to the DP-2 ('02), it is referring to the

Dwelling Property Broad Form policy. The ('02) means it is the ISO policy form that was introduced in 2002.

Signatures of each party

Each of the following elements is necessary for formation of a legally valid contract EXCEPT:

A BOP covers BI, PD and Personal Injury Liability, but not

Employers Liability.

Workers Compensation premiums are adjusted by the yearly frequency of employee injury, which is known as the

Experience Modification Factor, which is developed by the NCCI (National Council of Compensation Insurers).

Concealment

Failure to disclose known facts when filling out an insurance application is an act of:

On an HO, an insured may make a payment to an injured party under

First Aid expenses.

The P&C Guaranty Association will pay the claims of an insolvent workers compensation insurer without limit, although it does not cover?

Group Self-Insurance Workers Compensation Funds.

All authorized (admitted) P&C insurers must become members of the?

Guaranty Association as a condition of their Certificate of Authority.

Personal Injury liability for false arrest, libel, slander, defamation and invasion of privacy is not automatically covered on an

HO, but can be added by endorsement for an additional premium.

Examples of package policies are the

HO, the BOP and the CPP.

Reinsurer

If an insurance company transfers part of their risk to another insurer, that other insurer is known as a?

Pay the claim Since the insurer is vicariously liable for the acts of their agent, if the agent was to specifically state a claim would be covered, the insurer would most likely provide coverage for the loss even if the loss is excluded.

If an insurance producer informs a client that a policy claim will be covered, and the claim is specifically excluded in the policy, what will the insurer do?

Indemnity

In property and casualty and in medical-expense insurance, the principle of making someone "whole" again after a loss by paying only for actual losses is called:

Consideration

In the formation of a legal contract, each party must give something of value. Under contract law, this is referred to as:

At the time of application and at the time of loss

In the property and casualty insurance field, "insurable interest" must exist:

Mutual

In which company may policyholders receive policy dividends when there is a profit?

Stock

In which company may stockholders share in the profits and losses of the insurer?

The house they own but rent to a tenant, and the car on which they are still paying

In which of the following would a person have an insurable interest:

The possibility of loss only

Insurable risks must involve:

Transferring risk

Insurance is a means of:

Cost of Defense is not included in the Supplementary Payments section of a PAP. It is in the

Insuring Agreement, although it is in addition to limits.

A moral hazard: A moral hazard is created by a dishonest person, such as someone who may use arson to collect on their fire insurance. Moral hazards are best spotted by the producer, who is considered to be the "front line" underwriter.

Is the tendency to create a loss on purpose, to collect from the insurance company

All authorized property insurers in this state must participate in?

LA Citizen's FAIR and Coastal plans as a condition of their Certificate of Authority.

Part II of a package policy is the

Liability section and has no deductible.

The policy clause that states the insurer can change the policy, only if they make it broader (more beneficial for the insured), and charge no additional premium, is known as

Liberalization.

The most an HO policy will pay under the liability section is known as the

Limit of Liability.

All authorized auto insurers must participate in the?

Louisiana Automobile Insurance Plan, also known as the "assigned risk plan", which is designed to provide insurance to those who are in good faith entitled to but are unable to buy insurance through ordinary methods.

Annual statements must be filed by?

March 1st.

A binder Although binders provide temporary insurance coverage until they are superseded by the policy, they don't guarantee that the policy will be issued, since that decision is up to the company underwriter. However, binders are legal contracts and may be either written or oral. A producer's binding authority, if any, is stated in their contract with the insurer they represent.

May be oral or written

On a PAP, an at-fault driver's injuries would be covered by

Medical.

An unendorsed PAP does not provide any coverage in

Mexico.

Since a BAP does not cover mobile equipment, except while it is being towed or transported by a covered auto, if the insured wanted coverage for damage that a forklift may cause, they should add the

Mobile Equipment endorsement to their BAP.

Morale Hazard

Mr. Green leaves his car running while he goes inside to finish getting ready for work. This is considered a:

If you rent your garage to a friend who uses it to store mercantile goods there will be

NO coverage under your HO insurance policy.

An HO-3 is Open Peril on the dwelling, but

Named Peril on the contents.

To be eligible for federal flood insurance, the community must participate in the

National Flood Insurance Program (NFIP).

If an employee is driving their own car on company business and runs a red light and hits someone, this loss would be covered by the Employer's

Non-Owned endorsement, which can be added to the Business Auto Policy.

Risk of loss exists because of a catastrophic exposure Insurers avoid insuring catastrophic situations, such as floods or earthquakes, due to adverse selection. The only people who need flood insurance are those living next to the river, and since there isn't enough of them, the insurer would lose money selling flood insurance.

Not all risks are insurable. Certain characteristics must be present for a particular risk to be considered an "insurable risk". Which of the following characteristics might make a risk uninsurable:

In the Personal Auto Policy, hitting a deer is an example of

Other than Collision

The CGL always contains three coverage sections:

Part A is liability (BI and PD), Part B is Personal Injury and Advertising and Part C is Medical Payments to Others; there is no deductible on these coverages.

Transportation expense on a PAP is automatically included if you carry

Part D (Physical Damage) coverage. There is no deductible.

If the employee sues the employer,

Part II (Employers Liability) of the Workers Compensation policy applies.

If an insured wants additional coverage for specific items already covered under a Homeowners policy, they should add a

Personal Articles Floater, also known as a Scheduled Personal Property Floater.

To add personal liability to a DP policy, add the

Personal Liability Supplement endorsement.

Dwelling Property (DP) policies do not cover personal liability, although it can be added by adding an endorsement known as a

Personal Liability Supplement for an additional premium charge.

The CGL policy excludes coverage for

Pollution Liability, although this coverage may be added by optional endorsement for an additional premium.

The CGL policy automatically covers

Premises Liability (BI and PD) under Coverage A.

The part of a Workers Compensation policy that specifies how much the employer will pay for coverage is referred to as

Premium (Part V).

Part I of a package policy is the

Property section and has a deductible.

A Breach of Warranty may void a?

Property/Casualty contract.

The chance of loss without any chance of gain is called?

Pure Risk.

Coverage 'D' of a DP-1 provides coverage for the loss of

Rental Value (20% of Coverage A).

The formula for determining Actual Cash Value (ACV) is

Replacement Cost minus Depreciation. ACV is not market value. It has no relationship to market value or appraised value for tax purposes. It does not include the value of the land.

An independent producer: Independent producers are self employed and usually represent more than one insurer on a straight commission basis.

Represents more than one insurance company

An insurer-group formed to insure liability risks is known as a

Risk Retention Group.

General agent

Some producers supervise all of an insurance company's business within a specified territory. These producers appoint other producers, supervise their business, and receive an overriding commission on that business. What is the formal name for this type of producer?

Hazard

Something that may increase the seriousness of a loss if loss occurs, or that increases the likelihood that a loss will occur, is called a:

The Commissioner may approve other forms of property insurance containing perils in addition to those covered by the?

Standard Fire Policy.

Representations

Statements provided by an applicant for insurance are considered to be:

Legal precedent Legal precedent often has an effect on insurance regulation. This is why insurers are reluctant to change their policy forms, since many prior court cases rest on that language. For example, the standard fire policy hasn't been changed since 1943.

Supreme Court decisions and case law have contributed to the regulation of the insurance business. This is an example of:

The predictions become more accurate as the number of units being considered increases

The Law of Large Numbers states that:

Express Authority

The authority of an insurance producer that is spelled out in the written words of the agency contract between the producer and the insurer is:

Apparent Apparent authority is the authority that a producer seems to have based upon his actions, whether he actually has it or not.

The authority that a producer seems to have that is based upon certain actions that the producer takes is known as __________ authority.

Implied The authority which is given by the insurer that is not specified, but needed to conduct customary business practices, is implied authority.

The authority which is given by the insurer that is not specified is which of the following:

State Laws

The insurance business is regulated primarily by:

Risk

The uncertainty about loss that exists whenever more than one outcome is possible is called:

The broadest type of crime insurance is called

Theft, Disappearance and Destruction.

An employee who cannot return to work because of a disability is classified as

Totally Disabled.

Waiver

Under contract law, the actions by a party may intentionally and voluntarily give up a known right. When this occurs, it is known as:

The CGL policy territory is the

United States, Puerto Rico and Canada and other parts of the world provided the insured's responsibility to pay damages is determined in a suit on the merits, filed in the USA, its territories, possessions, Puerto Rico or Canada.

Reciprocal insurer

What is the name of the type of insurer consisting of an unincorporated group of persons who provide insurance among themselves through an inter-exchange of indemnity agreements?

Estoppel Waiver is defined as the voluntary giving up of a known right. Once waived, the right to enforce that right in the future is no longer available (estoppel). Waiver and estoppel generally go together

When a party appears to have given up a particular right by acts or by inaction that another party has relied on, the legal basis for asserting the original right may have been lost. This is known as the legal doctrine of:

Warranty

When a property insurance applicant makes a statement on an application that becomes part of the contract and includes a promise by the insured, the statement is considered to be a:

Competent parties Legal capacity means that the parties to the contract are not minors and are not incapacitated in any way, such as being under the influence of drugs or alcohol.

Which element of an insurance contract requires that the insured have the legal capacity to make a contract?

Reasonable expectations

Which insurance doctrine states that a policy should cover what a prudent person would expect?

Agreement

Which of the following contractual elements consists of the "offer" and the "acceptance":

Aleatory Aleatory means that the consideration is not necessarily equal. A valued contract is like life insurance, where the insurer agrees to pay a specified amount upon the death of the insured, regardless of their human life value. All insurance contracts are unilateral, meaning one-sided.

Which of the following terms means that an insurance contract is dependent upon chance or uncertain outcome:

One of the parties is not competent

Which of the following would cause a contract not to be enforceable:

An insurance broker Brokers represent the customer. Producers represent the insurer. A service representative works for an insurance company in a marketing capacity

Which type of licensee represents insureds or prospective insureds and does not represent an insurance company?

All insurers selling Workers Compensation must participate in the

Workers Compensation Assigned Risk Plan.

The National Council of Compensation Insurers (NCCI) analyzes

Workers Compensation loss costs to determine experience modification rating factors.

There is no coverage on a PAP for a mechanic who is injured while working on your car. They would be covered by

Workers Compensation.

Although a mortgagee's insurable interest may be reflected on a property insurance policy, they are not considered to be

a "named insured" on the policy.

A person who has been convicted of a felony involving breach of trust, dishonesty, or insurance crimes is considered to be?

a "prohibited" person, meaning they are prohibited from engaging in insurance activities without the consent of the Commissioner.

If you wreck your car and rent another one to drive while yours is being repaired, the rental car is covered as

a "temporary substitute" on your policy.

When an insurer voluntarily gives up the right to obtain information that they are entitled to, they have made?

a "waiver".

A statement that the insured guarantees to be true is known as

a "warranty".

Under the TRIA, only terrorist acts in excess of?

a $100 million threshold will result in the payment of federal funds.

The Commissioner is elected for?

a 4 year term.

Hitting a pole with an insured automobile would be an example of

a Collision.

On a Farm Policy, the definition of a dwelling does not include

a building used for agricultural purposes.

In the case of death, workers compensation will pay?

a burial expense not to exceed $7,500.

A PAP policy will cover damage to a garage you rent caused by

a car driven by you.

A "morale" hazard is presented by

a careless person.

A peril is defined as?

a cause of loss, such as fire.

If an insured accidentally backed up their car into a mailbox, the damage caused to their car would be covered as

a collision loss.

A "business entity" producer license may be issued to?

a corporation or partnership that sells, solicits or negotiates insurance.

Burglary is

a crime against property, using forced entry or exit.

"Strict" liability is not

a defense to a negligence lawsuit.

The Commissioner may issue a Certificate of Authority to?

a domestic, foreign or alien insurer, authorizing them to transact insurance in this state.

The Motor Carrier Act of 1980 is

a federal law requiring that commercial policies written to cover trucks, cover environmental restoration and have high limits of coverage.

An insurer that is incorporated in this state, but who does business in other states, is considered to be

a foreign insurer in those other states.

Under the National Flood Insurance Program (NFIP), "flood" is defined as

a general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or of 2 or more properties (one of which is the insured's property) from an overflow of inland or tidal waters, an unusual and rapid accumulation or runoff of surface waters from any source, or mudflow.

The theft coverage on an HO policy will apply to personal property owned by

a guest or a residence employee while the property is in any residence occupied by an insured.

An HO policy will not cover the property of a boarder (renter), but will cover the property of

a guest or residence employee.

The Business Pursuits endorsement which is available for an HO policy would NOT cover

a hardware store.

Leaving matches within reach of a child is?

a hazard.

Included in the definition of an uninsured motorist is

a hit-and-run driver, one whose insurer has gone bankrupt, and one who does not carry the state minimum limits.

The presence of a physical hazard increases the chance of?

a loss occurring.

If a Crime policy is written on a "discovery" form, it will cover

a loss that occurred at any time, as long as it is discovered during the policy period or within 60 days after policy expiration.

If a Crime policy is written on a "loss sustained" form, it will cover

a loss that occurred during the policy period as long as the loss was discovered and turned in to the insurer within one year of policy expiration.

The P&C Guaranty Association will pay claims for unearned premium refunds up to?

a maximum of $10,000.

Under the National Flood Insurance Program (NFIP) regular program, personal property in a dwelling may be insured up to

a maximum of $100,000.

A client with a 'devil may care' attitude presents?

a morale hazard.

The Basic Dwelling form DP-1 is

a named or specified peril policy.

Auto insurers may not require repairs to a motor vehicle be made by?

a particular shop.

The deductible on the optional HO Earthquake coverage is

a percentage of the policy limit.

An insurance producer means?

a person required to be licensed in order to sell, solicit or negotiate insurance.

Errors and Omission may occur if?

a producer fails to renew a customer's policy.

Claimants are not required to hire

a public adjuster to assist them in settling a claim.

The Dwelling Rented to Others Endorsement on an HO extends both Personal Liability and Medical coverage to

a rental dwelling owned by the insured.

On a property policy, insureds must submit

a signed, sworn proof of loss to the insurer within 60 days.

Specific insurance provides

a specific amount of coverage for specific types of property at specific locations.

A situation which presents an opportunity for gain and loss (like going to the casino) is

a speculative risk.

A property owner who fails to maintain lighting on a staircase has violated

a standard of care.

A warranty is defined as?

a sworn statement of truth, guaranteed to be true.

On an HO policy, the term "business" is defined to mean

a trade, profession or occupation engaged in on a full-time, part-time or occasional basis.

An individual who is spraying poisonous chemicals on their property would have

absolute or strict liability if anyone got sick.

Economic-only UM/UIM coverage covers?

actual injuries sustained, but does not cover damages related to pain and suffering.

Workers Compensation cannot be

added to a package policy. It always stands alone.

Licensed P&C agents may "bind" coverage through LA Citizen's FAIR and Coastal Plans if they have?

adequate Errors and Omissions insurance and have completed a training course offered by the corporation.

It is the duty of the Commissioner to?

administer and enforce the provisions of the state insurance code in order to protect the public.

Producers must report to the Commissioner any?

administrative action taken against them in this or another state within 30 days of the final disposition of the matter.

Products and completed operations liability applies only

after the product is out of the control of the insured.

No auto insurer may cancel or fail to renew an auto policy solely because of?

age.

A producer's license will remain in effect, unless revoked, suspended, or denied renewal, as long as?

all applicable fees are paid and continuing education requirements are satisfied.

A producer who allows their license to lapse may, within 5 years, reinstate the license by fulfilling?

all continuing education requirements and paying all fees due.

The doctrine of "Utmost Good Faith" states that?

all parties to an insurance transaction are honest.

In a BOP the common policy conditions apply to

all parts of the policy.

An insured cannot file a lawsuit against the insurer unless

all policy conditions have been complied with.

No insurer may cancel a HO policy solely on the basis that the insured owns or possesses an?

all- terrain vehicle (ATV), although they may exclude it from coverage.

An HO-5 provides

all-risk (open-peril) coverage for contents.

An unendorsed BOP will pay claims on an

all-risk basis.

On a DP-1 under "other coverages," the peril of removal is

all-risk.

All claims-made CGL policies contain a basic extended reporting period (ERP), which

allows someone with a pending claim 60 additional days after expiration to notify the insurer.

On an HO, breakage of glass is covered on the policy as

an "Additional Coverage".

Property damage (PD) liability is covered under Coverage 'E' of an HO policy. It is not considered to be

an "additional" coverage.

An authorized insurer is also known as?

an "admitted" insurer.

A specific and definite proposal to enter into a contract is known as?

an "offer".

Advertising the availability of insurance is not considered to be?

an "offer".

Claims resulting from the enforcement of an ordinance or law are not covered by most property policies, although limited coverage is provided as

an 'additional coverage' on an HO policy.

When an insured transfers their right of ownership to another party, it is called

an 'assignment'.

On the Dwelling Broad Form DP-2 building structures (Coverages A & B) are written with

an 80% coinsurance requirement.

A producer shall not act as?

an agent of an insurer, unless the producer has been appointed by that insurer.

An insurer based in Canada who sells in the U.S. is?

an alien company.

An insurer doing business in the U.S. that is based outside of the U.S. is

an alien insurer.

"Functional replacement cost valuation" would most likely be used on the valuation of the loss of

an antique dresser.

Business Auto Coverage Form does not cover

an employee injured while driving a company car.

A situation where vicarious liability would be present is when

an employee is representing an employer.

A 2-year-old TV set could be insured on a replacement cost basis by adding

an endorsement to an HO policy.

A Personal Umbrella policy is

an excess limits personal liability policy. It does not cover business or commercial liability.

Consideration is defined as

an exchange of values, although the exchange need not be equal.

A directors and officers liability policy would cover

an executive if they were to be sued by shareholders.

A producer license of a business entity may be suspended or revoked, or a fine may be levied if?

an individual licensee's violation was known to the firm and it was not reported to the Commissioner and no corrective action was taken.

No compensation shall be allowed under workers compensation for injury caused by?

an injured employee's willful intention to injure them self or by an injured employee's intoxication.

A third-party claim is turned in by?

an injured third party for damage or injuries incurred due to the fault of the insured.

Both the Businessowners Policy & the Commercial Package Policy state in the conditions section

an insurance company can examine the insured books and adjust the premium for up to three years after the policy has expired.

The Commercial Property Leasehold Interest coverage form protects

an insured for the value of their lease in the event it is canceled as a result of physical loss or damage to the property by a covered cause of loss.

A cemetery plot or burial vault of the insured is considered to be

an insured location in the HO.

LA Citizens is considered to be?

an insurer of "last resort".

Towing and labor is

an optional coverage on the PAP and costs extra.

DP and HO policies exclude coverage for

animals, birds or fish.

The Homeowners policy does not cover theft of

animals, birds or fish.

A licensee shall also provide a privacy protection notice to customers not less than?

annually during the continuation of the customer relationship.

A "foreign" company has their home office in?

another state.

In a commercial crime insurance policy theft is broadly defined to include

any act of stealing.

A certificate of insurance may not transfer?

any contractual rights to the certificate holder.

Certificate of insurance means?

any document prepared by an insurer or producer and issued to a third person not a party to the contract, as evidence of property and casualty insurance coverage.

Certificate holder means?

any person, other than a policyholder, that is designated on a certificate of insurance.

Commercial insurers must give the first-named insured written notice of?

any rate increase, change in the deductible, or reduction in limits or coverage at least 30 days prior to the expiration of a policy.

A Commercial policy that has been in force for 60 days or less may be cancelled by the insurer for?

any valid reason with 60 days prior written notice to the first-named insured.

Insurers subject to assessment by LA Citizens are permitted to recoup all regular assessments from their voluntary policyholders by?

applying a premium surcharge.

On an HO policy, there is no theft coverage for personal property while

at any other residence owned by, rented to, or occupied by an insured, except while the insured is temporarily living there.

When cancelling or non-renewing a HO policy, insurers must send the named insured?

at least 30 days' advance written notice.

On commercial policies that have not been in effect for at least 60 days, an insurer may cancel for any valid reason by giving the first-named insured?

at least 60 days' advance written notice.

Applicants for a producer license must be?

at least age 18 and complete a prelicense training course.

Coverage B - Other Structures in the Homeowners and Dwelling policies does not include

attached garages.

A reciprocal insurance company is managed by an?

attorney-in-fact.

Express authority is

authority the principal provides a producer in writing.

If the insured dies, their policy rights are transferred to their

authorized representative

The garage coverage form was created for

auto dealers, repair shops, service stations, parking garages and similar risks.

An unendorsed Businessowners Policy (BOP) does not cover

auto liability, including liability for the operation of a non-owned auto.

The NFIP does not cover

autos, outdoor furniture or furniture in the basement.

On a PAP, supplementary payments provide coverage for

bail bonds, appeal bonds, post-judgment interest and loss of earnings and are payable in addition to limits.

A BOP may not be written for a

bank or credit union.

The Commercial Property Causes of Loss forms are

basic, broad and special.

To be insurable, losses must?

be calculable.

No licensee whose license has been revoked shall?

be entitled to file another application for a license for at least 1 year.

The consideration on a policy need not?

be equal.

Any person who intentionally fails to remit premium payments or knowingly converts premiums belonging to another to their own use shall?

be guilty of theft.

Clerical staff employees not involved in selling insurance need not?

be licensed.

In order for auto UM coverage to apply in a hit-and-run situation, witnesses must

be present.

Applicants for LA Citizens coverage must have?

been declined by one or more voluntary insurers prior to applying for coverage.

The "course of construction" endorsement will provide provisional coverage for a dwelling while it is

being built.

An insured purchases Underinsured Motorist coverage because of their concern of

being in an auto accident with someone who has inadequate limits of liability and is at fault.

Under the doctrine of "comparative negligence"

benefits payable to an injured party are reduced in accordance with their own degree of negligence, which prevents an injured party from collecting damages related to their own negligence.

A Mortgagee does not have to accept a

binder for insurance upon renewal.

The Personal Liability Supplement is added to a dwelling policy to provide

bodily injury and property damage liability coverage to others as a result of negligence of the insured.

HO liability covers

bodily injury to a third party.

Coverage 'C' (personal property) on an HO policy will cover the insured's contents at

both locations while moving.

An "intervening cause"

breaks the chain of events and is a defense to negligence.

A DP-3 will cover theft of a

built-in appliance.

The Workers Compensation Assigned Risk Plan is available for

businesses that are unable to obtain Workers Compensation insurance through the normal market place.

The most common way that truckers satisfy the Motor Carrier Act of 1980 is to

buy insurance.

Although FEMA develops flood insurance rates, it is agents (producers) who

calculate flood insurance premiums.

Other than the insurer, only the 1st Named Insured may

cancel a Commercial Package Policy.

During the initial 60-day underwriting period, an insurer may?

cancel an auto policy for any valid reason.

A named insured who has been continuously insured by the same standard BI insurer for 10 years may not be

canceled or non-renewed for an at-fault auto accident.

Upon the written request of the named insured on a Standard Fire Policy, the insurer shall provide in writing the reasons for?

cancellation of the policy.

A peril is a?

cause of loss.

After a Commercial policy has been in force for more than 60 days, it may be cancelled by the insurer only for?

certain specified reasons with only 30 days' advance written notice.

Insurance binders are not?

certificates of insurance.

A hazard is something that increases the?

chance of loss.

The Federal Emergency Management Agency (FEMA) develops federal flood insurance rates, including those

charged under an insurer's "Write Your Own" flood insurance program.

Conditions state the insured's duties in the event of a?

claim (for example, Notice of Claim).

The liability section of an HO policy includes 4 Additional Coverages:

claim expenses, first aid expenses, damage to property of others and loss assessments. However, the Personal Liability Supplement, which may be added to a DP, only covers 3 of these Additional Coverages. Coverage for loss assessments must be added by endorsement.

A Claims Made Liability policy requires that the

claim occur after the retroactive date and be turned in during the policy period or within the extended reporting period.

Products liability is often written on a

claims-made basis, as is professional liability, such as malpractice, or Errors and Omissions Liability.

Insurers or producers may issue an addendum that?

clarifies the coverages provided by a policy.

Exclusions exist in an insurance policy to

clarify coverage, not to prevent fraud.

A person who voluntarily participates in a dangerous activity may be prevented from

collecting damages under the doctrine of "assumption of the risk".

Collision coverage on the PAP covers

colliding with another object, rollover and upset. Everything else is covered by Other Than Collision coverage.

If an insured hits a traffic barrier and damages their car, the damage will be covered as a

collision loss.

"Other Structures" coverage covering a detached garage excludes

commercial business risks.

A Boatowners Policy will not cover boats used as

commercial charters.

It is considered to be unfair for an insurer to?

commit or perform unfair claims settlement practices with such frequency as to indicate a general business practice, such as refusing to pay claims without conducting a reasonable investigation.

An HO-6 (unit-owner's policy) does not cover

common area buildings.

On a DP policy, if company 'A' writes coverage in the amount of $10,000 and company 'B' writes coverage in the amount of $30,000 to cover the same $20,000 loss

company 'A' will pay 1/4th of the loss and company 'B' will pay 3/4ths of the loss.

If a homeowner is injured by a light fixture which was installed improperly, it would be covered by the

completed operations coverage in the CGL of the contractor.

The Cancellation Provisions are found in the

conditions section of the policy.

A "friendly" fire is one

confined to an intended area, such as your fireplace.

A policy owner may not assign his ownership in a policy to another party without the

consent of the insurer.

On an HO-3, the Coverage 'A' - Dwelling limit automatically provides coverage for materials and supplies located on or next to the dwelling used to

construct, alter or repair the dwelling or other structures on the described location.

A licensee establishes a customer relationship when a?

consumer obtains insurance through the licensee.

The Fair Credit Reporting Act requires?

consumer reporting agencies to adopt fair and equitable procedures related to consumer reports ordered in connection with credit, employment or insurance.

On a DP policy, the definition of a dwelling does not include

contents or personal property.

An insurer must pay a covered claim since insurance policies are

contracts of adhesion.

Products Liability does not cover the

cost of a recall or resulting lost income.

A "constructive total loss" occurs when the

cost to rebuild is more than the value.

Medical is covered under

coverage 'F'.

Section II of an HO policy (the liability section) contains a condition known as "severability", which states that

coverage applies separately to each insured, but will not increase the limits of liability for any one occurrence.

"Arbitration" is used on liability policies to determine if

coverage applies.

Supplementary payments on a PAP increase

coverage in addition to limits for no extra charge.

When an applicant for insurance misstates a material fact,

coverage may be voided.

On an HO policy, Coverage 'F' is Medical to Others, which provides

coverage up to the Medical limits shown on the policy declarations page.

The insuring agreement states that

coverage will be provided in return for the premium paid.

Binders may start?

coverage.

On an unendorsed PAP, the bed liner in a pick-up truck would be

covered if damaged due to a collision.

The Insuring Agreement lists the

covered perils.

On a DP-1, water damage resulting from putting out a fire is

covered.

On a DP-2, damage to a garage caused by the weight of ice, snow or sleet is

covered.

A DP-2 Broad Form policy provides coverage for "power surge", which is defined as

damage done by artificially generated electrical current.

After 30 consecutive days of vacancy, the DP-2 Broad Form will not provide any coverage for

damage done by burglars or the accidental discharge of water or steam.

A crime insurance policy that provides 'on premises' coverage (such as a premises burglary policy) will cover

damage to the safe.

Insureds who do not carry collision coverage and who do not reject UM/UIM coverage may purchase UM property damage, which provides coverage for?

damage to their own car caused by an uninsured motorist in the amount of its ACV or $10,000, whichever is less. This coverage is subject to a deductible of $250 for any one accident.

Upon the death of an employee, workers compensation will provide a weekly sum to a surviving spouse until?

death or remarriage, to dependent minor children until age 18, or age 23 if in college, and to incapacitated minor children as long as their incapacity exists.

On an HO policy, "additional coverages" (such as debris removal), are in addition to limits and usually have no

deductible.

A liability policy will not pay the cost of

defense on an excluded claim.

"Unintentional injury" is not a

defense to a negligence lawsuit.

On a BOP, the Protective Safeguards Warranty allows the insurer to

deny a claim if systems are not properly maintained.

Certificate holder means any person, other than a policyholder, that is?

designated on a certificate of insurance

On a valued policy, it is not necessary to

determine the ACV or the depreciation.

Rates are a factor when

determining the premium.

Surplus Lines Insurers write?

difficult-to-place business risks.

Although earth movement (earthquake) is excluded on property policies, if a fire or an explosion ensues,

direct loss from these perils would be covered.

It is considered to be a form of misrepresentation for an applicant to fail to

disclose material information about themselves.

An Employment Practices Liability policy covers

discrimination, harassment and unlawful termination. This coverage is NOT provided in a Workers Compensation policy.

On your PAP, your mother who lives with you is covered to

drive cars other than your covered auto.

Workers compensation covers medical expenses on a usual and customary basis for?

drugs, supplies and hospital care, including medical and surgical treatment.

A Bailees Customers Goods Floater is written for

dry cleaner's and appliance-repair shops.

A producer is in violation of the law regarding controlled business if?

during any 12 month period, the total commissions earned from controlled business exceeds 25% of the commissions earned on all business written during that same 12 month period.

On federal flood insurance, the deductible applies separately to the

dwelling and the contents.

The Louisiana Standard Fire Policy is the basis for all property insurance sold in this state, including?

dwelling, home and commercial property policies.

The common conditions section of a Commercial Package Policy (CPP) permits

either the insured or the insurer to cancel the policy.

Federal flood insurance is not sold by

employees of the federal government.

In Workers Compensation experience modification rating factors are based upon

employer's claims frequency.

Louisiana is a "competitive" state for workers compensation, meaning that?

employers may purchase coverage from any insurer who is authorized to sell it or they may self-insure.

The purpose of the Workers Compensation Second Injury Fund is to?

encourage employers to hire or retain employees who already have suffered a permanent partial disability by protecting them from further liability for subsequent second injuries.

Policies may be modified by

endorsement with mutual consent of the parties.

When adding an endorsement to a liability policy to cover a business, the type of business must be shown in the

endorsement.

Insurers cannot enforce a contract that they enter into with a minor, but the minor can?

enforce the contract against the insurer.

The purpose of the federal Terrorism Risk Insurance Act (TRIA) is to?

ensure that insurers have the financial capacity to insure acts of terrorism.

A "hostile" fire is one that

escapes its intended area.

At least 3 hours of the 24 hours of CE required for a P&C producer must be dedicated to?

ethics.

An Umbrella Liability policy pays

excess over the primary liability policy's limits of insurance.

You would look at the policy _________ to find out that intentional losses are not covered.

exclusions

Self-employed owners, partners and corporate officers are usually

exempt from carrying Workers Compensation.

On a PAP, Underinsured Motorist (UIM) coverage will not apply if the negligent driver's auto insurance has

expired. If the negligent driver has no insurance, it is an Uninsured Motorist (UM) claim.

An HO policy excludes coverage for earthquake and flood, but not

explosion.

An insurer's "loss costs" (or expected claims) are a

factor when determining rates.

The value a property would bring in a

fair sale in the open market is its market value.

A DP policy may not be written to cover

farms.

The Commissioner may suspend or revoke the certificate of authority of any insurer failing to?

file its annual statement when due.

Producers who do business under any name other than their legal name must?

file their assumed business name with the Commissioner and the Secretary of State.

Difference in Conditions (DIC) coverage is purchased to

fill in the gaps in the underlying Property policy.

Authorized insurers must file with the Commissioner annual and quarterly statements of their?

financial condition, transactions, and affairs.

Any person who violates a cease and desist order may be?

fined up to $25,000 for each violation, not to exceed a total of $250,000 for all violations.

Anyone within the company who destroys its books or records without the authority of the Commissioner or who fails to keep the books and records will be?

fined up to $5,000.

Penalty for paying commissions to unlicensed persons include?

fines, imprisonment and license suspension or revocation.

LA Citizens will write "essential property insurance", such as?

fire, extended coverage, wind, hail, homeowners and commercial business interruption insurance on real and tangible personal property at a fixed location in this state.

The Peak Season Endorsement is used by

firms with fluctuating inventories.

When cancelling a commercial policy after 60 days, the insurer must give at least 30 days' advance written notice to the?

first-named insured, unless the cancellation is for non-payment, in which case only 10 days' notice is required.

If the claimant notifies the insurer within 60 days of the pending claim, they have up to

five years to actually turn in the claim. The basic ERP is free.

An HO 8 excludes damage due to

flood (all HO policies do).

The FIA (Federal Insurance Administration) sets

flood insurance rates, etc. To qualify for NFIP, a community must cooperate with the FIA.

Examples of Other Than Collision coverage are

flood, earthquake and theft.

All HO policies exclude coverage for

flood.

On Commercial Property insurance, the 'Peak Season' endorsement provides

fluctuating amounts of contents coverage during the policy period.

On a PAP, the endorsement entitled Extended Non-Owned Auto provides liability coverage

for regular use of a non-owned auto.

An Equipment Dealers inland marine form may be written to cover

forklifts, but not autos or trucks.

A person who commits any fraudulent insurance act may be?

found guilty of a felony and subjected to imprisonment for up to 5 years and/or a fine not to exceed $5,000.

No insurer may cancel or fail to renew a HO policy that has been in effect for 3 years except for certain specified reasons, such as?

fraud or material misrepresentation.

After the 60-day initial underwriting period, an auto policy may only be cancelled for certain reasons, such as?

fraud, material misrepresentation or driver's license suspension.

Underwriters classify risks in an effort to make sure that

future actual losses equal expected losses.

Speculative risk has the possibility of _____ or ______ and isn't?

gain or loss and is not insurable.

Section II (liability) of an HO will cover the insured's use of a

golf cart on a golf course.

On a PAP, a miscellaneous vehicle endorsement may be added to cover

golf carts, motorcycles, and travel trailers, but not forklifts.

The purpose of the Privacy Protection regulation is to?

govern the treatment of non public personal financial information of individuals who obtain insurance or are claimants or beneficiaries of products used primarily for personal, family or household purposes.

Producers who hold resident licenses in other states may be?

granted a nonresident license in this state, without examination, if they pay the required fees and designate the Louisiana Commissioner as their lawful agent to receive subpoenas on their behalf.

Farm policies do not cover

growing crops or autos driven on the highway.

The insurance company, or surety (guarantor) is the party to a bond that

guarantees the fulfillment of the obligation.

Except for business placed through a licensed surplus lines broker, any person who knowingly and intentionally writes business with an unauthorized insurer may be?

guilty of a felony and may be imprisoned up to 5 years.

Damages due to pain and suffering are

hardest to prove, since they are intangible.

An insurer may not pay a commission to a producer unless they?

have appointed that producer.

In aviation insurance, under a Guest Voluntary Settlement (also known as 'admitted' liability) a settlement is offered, on a pre-determined basis, to passengers who

have suffered bodily injury in exchange for a release of liability.

Insurers may discriminate based upon the?

hazards presented by the customer.

On an HO policy, if the insured has to stay in a hotel after a covered loss, the insurer will pay

his "Additional Living Expenses".

On a PAP, an insured is not required to notify the police when they are involved in an accident, unless it is a

hit-and-run situation.

A fidelity bond, also known as employee dishonesty coverage, guarantees

honesty of employees (such as bank tellers).

Exempt from workers compensation coverage under certain circumstances are?

household domestics, employees of private unincorporated farms, musicians, performers and real estate sales persons.

A yacht policy typically covers

hull damage, protection and indemnity (ocean going BI & PD liability), and medical, but does not provide coverage for the property of guests.

Notice of claim must be given

immediately (promptly).

The authority not expressly (written) granted, but is actual authority the producer has to transact normal business activities, is known as?

implied authority.

Persons who violate federal regulations regarding fraud and false statements, including filing false financial reports, embezzlement or threatening regulators in order to impede the proper administration of the law may be?

imprisoned from 1 to 15 years and fined up to $50,000 per violation, or the amount of the compensation received, whichever is more.

Additional coverages on an HO policy (such as for trees, shrubs and plants) are

in addition to limits.

On a DP-2 Broad Form, Coverage B (other structures) is

in addition to other coverage limits.

Contracts do not have to be?

in writing to be enforceable in court.

Upon work-related death, Workers Compensation will pay

income benefits to surviving spouses and/or children. Children's benefits continue to age 18, or longer, if in school.

The liberalization clause permits the insurer to

increase coverage immediately at no charge.

There can be no negligence without

injury or damage sustained.

The P&C Guaranty Association does not cover the claims of?

insolvent ocean marine insurers.

On Equipment Breakdown insurance, the insurer 'may'

inspect the insured's equipment, but they are not required to.

Independent Producers own their own accounts and are not?

insurance company employees.

The government offers insurance primarily based upon social needs, such as flood insurance and Workers Compensation, but does not offer?

insurance for the purpose of preventing fraud.

The 'residual' market consists of insurers who are willing to

insure clients who present higher risk.

The Scheduled Personal Property Endorsement is used to

insure personal property with high values such as furs, antiques and jewelry.

On a DP-2, in order for replacement cost coverage to apply, the insured must

insure the dwelling for at least 80% of its current replacement cost, not counting the land.

A first-party claim is one turned in by the?

insured for damage to their own property.

Your divorced spouse is not considered to be an

insured on your PAP.

No insurer may cancel or refuse to issue or fail to renew a homeowner's (HO) policy solely on the basis that the?

insured owns or possesses an all-terrain vehicle (ATV).

Producers represent the insurance company, not the?

insured.

A producer may have more than one?

insurer appointment.

On an HO, the insurer's duty to defend a lawsuit is stated in the

insuring agreement.

On an HO-3, coverage for the removal of a fallen tree would apply if

it fell and damaged the dwelling.

Coverage 'C' on an "unendorsed" HO policy has a sub-limit that applies to the theft of

jewelry.

Jewelers Block insurance is a type of inland marine insurance that provides coverage for

jewels, watches, gold, silver, platinum, pearls, precious and semiprecious stones. Coverage is all-risk.

The purpose of subrogation is to

keep the insured from collecting twice.

A fraudulent insurance act is one committed by a person who?

knowingly and with intent to defraud presents materially false information in connection with a licensing application or a claim.

The policy territory on a personal watercraft or Boatowners policy includes

land; inland waters; in coastal waters within 12 miles of the shoreline; or in the Great Lakes; within the USA, its territories or possessions, Puerto Rico or Canada.

HO forms do not cover

landslide.

On a PAP, both the minimum and maximum UM/UIM limits are specified by

law. UM/UIM coverage need not be written on all autos covered by the policy.

A D&O (Directors and Officers) policy will cover a

lawsuit brought by a shareholder against a Director who unintentionally misstated the company's financial reports.

Tenant Improvements revert to the property owner upon

lease termination.

The definition of "insured contract" on a CGL includes

leases, sidetrack agreements and elevator- maintenance agreements.

An employment practices liability policy provides protection in the event of

legal actions resulting from charges of harassment, discrimination, wrongful termination of employment, defamation, and invasion of privacy.

The trailer interchange coverage of a truckers coverage form will cover

legal liability for loss or damage to non-owned trailers and equipment, providing collision and comprehensive coverage for a non-owned trailer.

Surplus lines insurers, such as Lloyds of London, may?

legally transact insurance in this state without a Certificate of Authority, since they write coverages in the residual market.

If someone broke their leg while on the premises of a business it would be covered by the

liability coverage of a BOP.

Teachers Liability may be covered on an HO by endorsement, but not

liability for police officers or lawyers.

"Strict" liability is

liability for things that are inherently dangerous to the public.

Producers who write insurance on behalf of an unauthorized insurer may be?

liable for the full amount of any losses not paid by the non admitted company.

Failure to fulfill the continuing education requirements will result in?

license expiration.

Clerical staff employees who collect premiums on behalf of licensed producer need not be?

licensed

A property policy may be voided (canceled immediately without coverage) if the insured?

lies about a material fact at the time of application or at the time of claim.

The P&C Guaranty Association does not cover claims of insolvent?

life, health, disability, credit, mechanical breakdown, ocean marine, reinsurance or surety insurers.

Your PAP will not provide any coverage for you driving a

limousine as a sole proprietor.

An HO excludes BI and PD arising out of the

loading or unloading of a motor vehicle.

The liability section of an HO policy automatically provides "additional coverages" for

loss assessments, damage to the property of others, emergency first aid and claims expenses, in addition to limits.

No insurer may cancel, fail to renew, or increase the amount of the premium on a HO policy based solely upon a?

loss caused by an "Act of God".

No insurer shall cancel, fail to renew, or increase the amount of premium on a HO policy based solely upon a?

loss caused by an "Act of God".

Risk is defined as the chance of?

loss.

The medical payments coverage found in the Personal Automobile Policy will not pay for

lost wages.

Property insurance "binders" may be and must conform to?

made orally or in writing and must conform to all provisions and conditions contained in the Standard Fire Policy.

Within 15 days after notifying the Commissioner of the termination of a producer's appointment, the insurer shall?

mail a copy of the notice to the producer at their last known address.

The Protective Safeguard Endorsement when attached to a BOP requires the insured to

maintain the sprinkler system or the alarm system in good working order.

The purpose of coinsurance is to

make sure the client carries adequate limits.

Directors and Officers (D & O) Liability policies cover the

management mistakes of corporate officers and board members. They do not cover illegal activities or IRS tax penalties.

The amount payable on a property claim is not based upon

market value.

Medical coverage on an HO will cover charges for

medical, surgical, x-ray, dental, ambulance, hospital, nursing, prosthetic devices and funeral services.

An 'endorsement' cannot be used to

modify policy conditions.

Valuable Papers coverage does not include coverage for

money or securities.

Historically, the FAIR Plan covered?

most of the state

The Aggregate limit of liability contained in the Commercial General Liability and the Businessowners Policy is the

most the insurance company will pay for all occurrences during the policy period.

Personal auto policies do not cover the insured while riding a

motorcycle.

A PAP will cover small pick-up trucks, even if they are used for farming or ranching, but will not cover

motorcycles, dump trucks or farm implements driven on the highway.

A PAP may be written to cover antique cars, but will not cover

motorcycles.

Property policies do not cover damage to

motorized vehicles, other than those used to maintain the premises (such as riding lawn mowers).

NFIP policies will not cover damage caused by

mudflow due to underground water.

The Declarations lists the

named insured, policy limits, premium and policy period.

The Declarations Page lists the

named insureds.

On an HO-6, contents coverage is

named perils (broad form).

Proof of Loss does not have to contain the

names of everyone in the household.

An insurance policy must list?

names of the parties to the contract, subject of the insurance, risks insured against, effective date and duration of coverage, premium amount and the premium rate where required, and conditions pertaining to the insurance.

On a PAP, the optional coverage for Medical covers

necessary medical and funeral services. Medical coverage applies on a "per-person" basis.

P&C insurers or producers may not issue certificates of insurance that?

negatively amend the coverage provided by the referenced insurance policies.

Strict or absolute liability is liability without

negligence (keeping a pet tiger).

A Fine Arts Floater will provide automatic coverage for

newly acquired fine art for 90 days.

Supplementary payments on a PAP have

no deductible and are in addition to limits.

An HO policy written to cover a vacation home will provide theft coverage on a year-round basis at

no extra premium charge.

Medical coverage on an HO is

no-fault and does not require any negligence.

Your PAP will provide coverage for you while driving your car as a volunteer on behalf of a

non- profit corporation.

The Louisiana Citizens Property Insurance Corporation (also known as "LA Citizens") is a?

non- profit entity that functions as a residual market mechanism to provide essential property insurance for residential and commercial property solely for applicants who are in good faith entitled to, but are unable to procure insurance through the voluntary market.

Surplus lines companies are?

non-admitted (unauthorized) insurers who insure high-risk P&C clients. They do not write life and health insurance.

A PAP will not cover the insured's regular use of a

non-owned auto.

Regardless of the type of policy, insurers need only give 10 days' advance notice when canceling for

non-payment of premium.

A dwelling under construction is

not considered to be vacant.

A personal umbrella liability policy will provide primary coverage when a claim occurs that is

not covered by any primary policy but is not excluded on the umbrella, after the insured pays the "self- insured retention", which is like a deductible.

Farm risks are

not covered on DP or HO forms.

Demolition of a structure due to enforcement of an ordinance or law is

not covered.

Property policies written by LA Citizens are written for a term?

not exceeding one year and may be renewed annually.

The land your house sits on is

not insurable.

The Commissioner must exam (audit)?

not less frequently than once every 5 years, all insurers doing business in this state.

After 60 days of vacancy, an HO policy will

not provide coverage for vandalism.

To appoint a producer as its agent, an insurer shall file a?

notice of appointment with the Commissioner within 15 days from the date the agency contract was signed.

When an auto policy is cancelled or non-renewed, the insurer shall?

notify the named insured of their possible eligibility for auto liability insurance through the assigned risk plan.

Under UM, if you are hit by a hit-and-run driver, you must

notify the police.

The Conditions lists the

obligations of both parties, the insurer and the insured.

Workers Compensation covers both

occupational injury and disease.

On a PAP, the limit for towing and labor applies per

occurrence.

It is an unfair trade practice for a producer to misrepresent the amount?

of dividends to be paid or received.

An unendorsed HO policy will not cover damages resulting from

off premises power failure.

An HO-8 is written for

older homes that have been renovated.

The HO 8 was created specifically for

older homes where the replacement cost exceeds the market value.

Coverage C on an unendorsed HO policy will cover personal property of others while

on the insured's residence premises.

"Estoppel" says that?

once you waive a legal right, you can no longer assert it.

A foreign insurer is?

one organized in another state

A domestic insurer is?

one organized in this state.

A contract of adhesion is one where

one party is unable to modify the contract language.

Insurance laws are not required to be uniform from?

one state to another.

an alien insurer is?

one that is organized in a foreign country.

Under medical payments coverage on a CGL, medical expenses must be incurred and reported to the insurer within

one year from the date of accident.

If the optional Pollution Liability endorsement is added to a CGL, upon policy expiration, an optional

one-year ERP is available regarding pollution claims.

If an HO-3 is written with a policy limit of $100,000 and the insured suffers a $95,000 fire loss and incurs $15,000 in debris removal expenses,

only $10,000 of the debris removal expense will be covered.

The TRIA covers?

only commercial insurers and causes of loss specified in their underlying policies, including residual market entities such as workers compensations pools, state licensed captive insurers and risk retention groups.

Insurance policies are considered to be "unilateral" contracts, in that?

only one party makes an enforceable promise - the insurer.

A Trip Transit policy covers cargo for

only one specific trip.

The liability coverage provided by an HO policy does not provide any coverage for an insured who is

operating a repair shop in his garage.

A binder of coverage may be either

oral or in writing.

Dividends paid by a stock company to stockholders are taxable as?

ordinary income.

Reinsurers are different from regular insurers as they primarily insure

other insurers.

Supplementary Payments found in the liability section of a policy are

paid in addition to the liability limits (bail bonds, appeal bond and expenses for the insured to assist in the trial).

Medical coverage on a PAP will not cover

pain and suffering.

No insurer shall require that repairs be made to a motor vehicle, including glass repairs, in any?

particular place or shop or by a particular entity.

On Contributory Negligence, you cannot recover at all if you are

partly at fault.

Flood insurance does not cover

patio furniture, docks, fences or bridges.

If an insurer places a value on a structure for the purposes of determining the premium, then in the case of total loss, they must?

pay a covered claim according to such valuation.

A "stock" insurer may?

pay dividends to its shareholders (stockholders), but they may not be guaranteed.

The purpose of the Louisiana Property and Casualty Guaranty Association is to?

pay the claims and unearned premium refunds of insolvent insurance companies.

The purpose of the Louisiana P&C Insurance Guaranty Association is to?

pay the claims of insolvent (bankrupt) insurers.

If an insurer issues a Workers Compensation policy that does not comply with state requirements, they must

pay the mandated coverages in the event of a claim.

If an umbrella policy provides primary coverage the insured would be required to

pay the self-insured retention.

The optional coverage for towing and labor will

pay up to a specified amount on a per event or per occurrence basis.

A toy company which has large fluctuations of inventory during the holidays would use a

peak season limit of insurance endorsement to properly cover the fluctuations.

Auto medical covers you and your passengers, but not

pedestrians you injure.

On a CGL, the Fire Legal coverage applies on a

per-fire basis.

On a CGL, the Medical to Others coverage applies on a

per-person basis.

A contract bond is also known as a

performance bond.

XYZ Company is awarded a contract to build a new sports stadium. Generally, as a condition to the contract with the city, XYZ would be required to purchase a

performance bond.

The Exclusions lists the

perils that are not covered.

Contract bonds are normally written for the

period of the contract only.

An MGA (Managing General Agent) is a?

person who exercises general supervision over the business of an insurance company, including hiring and firing producers.

The TRIA does not cover?

personal auto or home, group life, medical malpractice, commercial auto, crops, professional liability, surety, burglary, theft or farm owner's package policies.

If the insured added the broad theft endorsement to a DP, it would not cover

personal injury.

The TRIA only covers commercial insurers and the causes of loss specified in their underlying policies. It does not cover?

personal lines of insurance, such as auto and home.

In the HO-3 Special form policy, theft of

personal property of a resident employee is covered.

Although the coverage provided on HO policies for personal property is written on an actual cash value basis, insureds who want replacement cost coverage may add the

personal property replacement cost endorsement.

Coverage 'E' on an HO, which is BI & PD to others, covers injuries to others caused by the insured's

pet.

Wet leaves on the sidewalk are considered to be a?

physical "hazard" (increases the risk).

Oily rags stored in the basement present a?

physical hazard.

The Commissioner may?

place on probation, suspend, revoke, or refuse to issue, renew or reinstate a producer license, and/or may levy a fine not to exceed $500 for each violation, up to a total of $10,000 for all violations in a calendar year.

The Doctrine of Adhesion states that?

policy ambiguities always favor the insured.

The amount of the deductible may be found in the

policy declarations.

On a personal umbrella policy, the 'retained' limit is defined as the

policy limits of the primary policies.

A mortgagee must be given notice of

policy non-renewal.

The Law of Large Numbers allows insurers to?

predict claims more accurately.

The liability coverage provided by an HO is called

premises liability.

Workers Compensation policies are subject to

premium audit by the insurer up to 3 years from expiration.

CPPs are subject to

premium audit for three years after policy expiration.

The premium charge for Workers Compensation is

primarily based on payroll.

If a customer with both a Boatowners policy and a Personal Umbrella policy has a liability loss, the Boatowners policy will be

primary and the Umbrella will be excess.

In an accident, the owner's PAP is always the

primary policy; the driver's PAP, if different, is always the excess policy.

When canceling a policy mid-term, the insurer must return the

pro rata share of the insured's unearned premium.

When a dwelling is covered by more than one policy, losses are shared

pro rata under the other insurance (or pro rata liability) clause.

An insurer may ask an insured to

produce books and records at any time.

Binding authority is in the __________'s contract.

producer

A producer's 'binding authority' (if any) is expressed (written down) in the?

producer's contract with the insurer they represent.

A producer may be personally liable when they violate their?

producer's contract.

A producer's Express Authority is contained in their?

producer's contract.

Garage liability covers

products liability, but does not cover the cost of a recall.

Errors & Omissions insurance protects?

professional persons such as insurance producers in case they are sued for negligent performance of their duties.

On property policies, abandonment of the property to the insurer is

prohibited.

All HO policies are package policies combining

property and liability coverages.

The main difference between the various DP (dwelling property) forms is the

property perils insured against.

Flood damage is covered under a PAP, but not on

property policies.

In the BOP, the period of restoration for Extra Expense coverage ends on the date the

property should be repaired, rebuilt, or replaced.

All authorized property insurers in this state are subject to?

proportionate assessments to pay the claims and expenses of LA Citizens.

All authorized P&C insurers are subject to?

proportionate assessments to pay the claims and expenses of the Guaranty Association.

If an insured buys a special policy to cover their printing presses in addition to a BOP, a claim will be

prorated (other insurance clause).

The underwriter's primary function is to

protect the insurer from adverse selection.

Most insurers buy "reinsurance" to?

protect themselves in the event of a catastrophic loss.

Under workers compensation, compensation for "permanent total disability" is 66 2/3% of wages during the period of disability, but an employee must?

prove that that are physically unable to engage in any employment.

The Louisiana Workers Compensation Corporation is a private, domestic mutual non-profit insurer whose purpose is to?

provide a residual market for those employers that have in good faith, but without success, sought workers compensation insurance in the voluntary market.

Blanket Insurance does NOT provide coverage for comforters and sheets, but can be written to

provide a single amount of insurance that may apply to different types of property or to different locations.

The primary purpose of Personal Umbrella policies is to

provide higher limits of personal liability.

Coverage C - Personal Property on an HO policy is provided on a "blanket" basis, which means that coverage is

provided at any location.

A direct cause of loss is also known as a

proximate cause of loss.

Reasonable Repairs will pay the

reasonable cost incurred by the insured for the necessary measures taken solely to protect covered property that is damaged by a peril insured against from further damage.

Paying dividends, as stated in the policy, is not considered to be?

rebating.

On a surety bond, the Obligee is the one who will

receive the benefit of the bond if the Principal defaults.

The Commissioner may exam any producer doing business in this state whenever they have?

received at least 3 complaints within a 30 day period.

On a Peak Season Endorsement, if the insured misstates the amount of inventory on hand when completing a reporting form, the amount of coverage is

reduced.

A party that agrees to conduct a transaction by electronic means may?

refuse to conduct other transactions by electronic means.

Medical Payments in Homeowners policies never apply to

regular members of the household.

If the insured purchases the Supplemental ERP, upon expiration of the policy, the General Aggregate CGL policy limit is

reinstated for the ERP.

However, the required coverage for UM/UIM is not applicable when the named insured either?

rejects coverage or selects "economic-only" coverage.

Loss of Use on an HO covers both

rental value and additional living expenses.

In case of a loss to a pair or set, the insurer may elect to

repair or replace the set to its value before the loss, or pay the difference in value before and after the loss.

An unendorsed BOP provides

replacement cost coverage for buildings and business personal property.

Any person aggrieved by any order of the Commissioner may?

request a hearing, which must be held within 30 days.

Negligence is not

required to be proven.

A person who you hire to maintain your premises, including purchasing groceries, is referred to as a

residence employee.

Federal Flood insurance may be written on both

residential and commercial structures.

The definition of an "insured" under an HO includes

residents of your household who are relatives, or any other person under age 21 who is in your care.

Producers have express, implied and apparent authority, but there is no such thing as?

residual authority.

To indemnify an insured would be to

restore the insured in whole or part, to the position they enjoyed prior to the loss, no better no worse.

The claim condition regarding "recovered property" permits the insurer to

return recovered property to the insured and readjust the loss accordingly.

A deductible represents a form of

risk retention.

A "hold-harmless" agreement is a form of

risk transfer.

A 'hold harmless' agreement is a form of

risk transfer.

On an HO, automatic coverage for watercraft liability will not apply to

sailboats 26 feet or more in overall length, boats with outboard motors with more than 25 total horsepower and boats with inboard motors owned by the insured, regardless of their horsepower.

Direct writing insurance companies use?

salaried producers.

Permitted incidental occupancies on an HO include

schools, studios and offices.

A policy with an "other insurance provision" that states it will only provide coverage after another policy is exhausted is known as a

secondary or excess policy.

Every agent licensed to sell property and casualty insurance in this state may?

sell insurance policies issued by LA Citizens.

On a CGL, the policy limit for personal and advertising liability is

separate from other policy limits (Coverage B).

On a CGL, the occurrence limits apply

separately for each claim, but the aggregate limit applies to all claims turned in during the policy period (usually one year).

A Physicians and Surgeons Equipment Floater does not cover

service or maintenance.

NFIP Flood insurance does not cover

sewer backup or seepage through walls.

The Terrorism Risk Insurance Act (TRIA) allows the insurance industry and the federal government to?

share losses according to a specific formula.

On appraisal, each party pays for the cost of their appraiser, although the cost of the umpire is

shared.

On Section I (property) of an HO, the conditions section states that an insured must submit a

signed, sworn proof of loss stating the time and cause of the loss along with an inventory of any damaged or stolen personal property.

A covered auto on a PAP includes

small pick-up trucks but not snowmobiles.

No insurer shall specify the use of non-original after-market crash parts in the repair of a vehicle unless the insured is?

so advised in writing and the written estimate clearly identifies each such part.

The Commissioner shall not grant a producer license to an applicant for the?

sole purpose of writing controlled business on them self, their family or employer.

An "uninsured motorist" does not include

someone driving with the required Surety Bond.

A 'fiduciary' is?

someone you trust to handle your affairs, such as a banker or insurance producer.

Under the consideration clause?

something of value must be exchanged.

Under workers compensation, "permanent partial disability" provides?

specific awards to employees for loss of use or amputation of various body parts.

A hazard is a

specific situation that increases the probability of the occurrence of loss arising from a peril, or that may influence the extent of the loss.

In a BAP, coverage symbol #7 provides coverage for

specifically described autos only.

If you add a Personal Articles Floater to your HO policy, you will receive

specified coverage for specified property.

Coverage B for Other Structures on a DP policy does not

specify the amount of coverage that applies to each separate structure.

On a Business Auto Policy (BAP) or on a PAP, transportation expenses are covered

starting 48 hours after a covered auto has been stolen.

The "Special Provisions" endorsements add

state Required Provisions to a policy.

Maximum limits for auto UM coverage are limited by

state law.

The coverages under Part I of a Workers Compensation policy are set by

state law.

The purpose of the Conditions Section of the policy is to

state the rules, which stipulate the conditions under which the coverages are provided.

Comparative negligence rules vary by

state.

Workers Compensation statutory coverages are set by the

state.

The maximum amount an insurer will pay is

stated in the "limits of liability."

A condition in a property policy may require that an insured make

statements under 'oath'.

If the employer violates a provision in a Workers Compensation policy, the insurer must

still pay covered claims for occupational accident or sickness.

On a Dwelling Policy, "Other Structures" coverage will apply to a

structure rented out as a private garage.

In Homeowners and Personal Automobile policies, expenses related to Medical Payments must be

submitted to the insurance company within three years of the date of loss.

The Commissioner has the power to?

subpoena the attendance of any person at a hearing and require the production of their books and records.

To find the ACV,

subtract the depreciation from the replacement cost (R/C - depreciation = ACV).

On an HO-3, personal property claims are paid on an "actual cash value" basis, which is determined by

subtracting the depreciation from the replacement cost.

An insurer may not pay a commission to any person for selling, soliciting, or negotiating insurance unless?

such person holds a valid license.

When it is the insured who requests cancellation, they must

surrender their policy.

The Commissioner shall notify all appointing insurers regarding any?

suspension, revocation or termination of a producer's license.

When an insured with a property policy dies, their "legal representative" may

take over their policy to the extent of their insurance interest until policy expiration, without the need for an endorsement.

On an HO, liability coverage does not extend to a location where you are

temporarily conducting your business.

A "binder" is considered to be?

temporary insurance and shall not be valid beyond the issuance of the policy as to which it was given.

Federal flood insurance covers

temporary inundation of normally dry land.

Expediting Expense on a Boiler and Machinery policy covers

temporary repair or temporary replacement, not permanent replacement.

Tenant Improvements belong to the

tenant during the period of the lease.

A BOP written for a tenant will automatically cover

tenant improvements and betterments.

A DP policy will not cover mercantile goods stored in the garage by someone other than a

tenant.

The TRIA covers acts of?

terrorism perpetrated by both foreign and domestic interests.

When bidding on a construction project, bidders are often required to post a 'bid bond', which guarantees

that the bidder (Principal) will accept the job if their bid is accepted. If the bidder defaults and does not accept the job, the surety company that wrote the bid bond must pay a 'penalty' to the Obligee, which is based on the difference between the Principal's bid and the next higher bid.

True fire-resistive construction requires

that the thickness of the masonry building materials be able to resist fire damage for at least 2 hours.

On an HO policy, the section in the policy that states who is covered besides the named insured is known as

the "Definitions".

Producers must report a change of address to?

the Commissioner within 10 days, or pay a $50 penalty.

Although an insurer has denied the claim, a court could find that coverage exists under

the Doctrine of Reasonable Expectations.

All authorized P&C insurers must become members of?

the Guaranty Association.

If the insurer cancels an HO policy, they must send advance written notice to both

the Mortgage Company and the Named Insured.

Workers compensation insurers and residual market mechanisms may participate in?

the Terrorism Risk Insurance Program.

The coverage territory on a Commercial Property policy is

the U.S., Puerto Rico and Canada.

"Appraisal" is used on property policies to determine

the amount payable.

On other types of claims, the P&C Guaranty Association will pay the amount of?

the claim or the policy limit written by the insolvent insurer, whichever is less.

A public adjuster represents

the claimant.

the Coastal Plan covered?

the coastal parishes

On appraisal, if the two appraisers cannot agree on an umpire

the court appoints one.

Coverage on an annual policy begins on

the date the binder was issued.

Under workers compensation, no compensation for loss of income due to disability will be paid for the first week after the injury unless?

the disability continues for 6 weeks or longer.

An HO-2 is Specified Peril on both

the dwelling and contents.

A DP-2 Broad Form policy is named perils on both

the dwelling and the contents.

To see what is covered on an All-risk policy, you must read

the exclusions.

Concealment is defined as?

the failure to disclose a material fact.

The Compulsory Motor Vehicle Security law prohibits those who drive without the compulsory insurance from collecting?

the first $25,000 in property damage and the first $15,000 in bodily injury, regardless of who caused the accident.

It is unfair discrimination to refuse to insure or limit the amount of coverage available to an individual solely because of?

the gender, marital status, race, religion or national origin of the individual.

Flood insurance is sold by

the government and by participating private insurers, but claims are paid by the federal government.

Auto Medical on a PAP protects

the insured and passengers in the car. It is an optional coverage. It is not a supplementary payment, and it is no-fault.

Conditions apply to both

the insured and the insurer.

The amount of property damage in a fire is determined by negotiation between

the insured and the insurer.

A mortgagee on a property policy may provide proof of loss to the insurer if

the insured fails to do so.

The Legal Actions Clause on a Commercial Property policy states that

the insured has a maximum of two years to file a lawsuit against the insurer.

On an HO, damage caused by freezing of a plumbing, heating, air-conditioning system or of a household appliance is covered if

the insured maintained the heat in the building.

Errors and Omissions insurance won't pay unless?

the insured was negligent.

The Business Auto coverage form may cover

the insured while operating semi-trucks and trailers, but not while operating a back-hoe.

Personal Liability and medical coverage on an HO cover

the insured's activities both on and off the premises.

The liability section of an HO policy will not cover

the insured's liability related to copyright infringement.

Supplementary payments under a PAP do not cover

the insured's loss of earnings except when the insured is attending a hearing or trial at the insurer's request. The insured's injuries are not covered.

As it relates to insurance the Doctrine of Utmost Good Faith states

the insurer can rely on true statements the insured makes during the application process and in return the insured can rely on the insurer paying covered claims.

An independent adjuster represents

the insurer.

The higher the deductible,

the lower the premium - and vice versa.

Generally, property and casualty policies contain a condition which prohibits a transfer of rights (assignment of policy ownership) to anyone without the consent of the insurer, unless

the named insured has died, in which case their rights are automatically transferred to their legal representative.

Medical coverage on an HO policy does not apply to

the named insured or regular residents of their household except for residence employees.

On a PAP, an insured's underinsured motorist limits will stack on top of

the negligent parties BI limits when the insured is injured by someone who has auto liability coverage, but not enough.

The premium for a Home Day Care Endorsement on an HO is based on

the number of children cared for.

An "Aleatory" contract is one where?

the outcome depends upon chance.

The Commissioner shall retain the authority to enforce the provisions of the insurance code, even if?

the person's license has been surrendered or has lapsed.

On liability policies, the cost of defense is no longer covered once

the policy limits have been paid out.

The P&C Guaranty Association will pay claims of insolvent insurers up to?

the policy limits written by the insolvent insurer.

The Doctrine of Reasonable Expectations is based upon?

the premise that a policy will cover what a prudent person would expect it would.

Coinsurance requirements on an HO are based upon

the present replacement cost.

The main difference in the various dwelling property forms is

the property perils covered.

The Principle of Indemnity states?

the purpose of insurance is to restore the insured to the same position as before the loss occurred.

Part II of a Workers Compensation policy contains

the right of subrogation, to keep the injured worker from collecting twice. This is Employers Liability coverage.

Damage due to rain is not covered on a Property policy unless

the roof or wall was first damaged by wind or hail, allowing the rain to enter.

Insurers may sell

the salvage to offset the claims expenses.

In ocean marine insurance, the term FOB (free on board) means that

the seller is considered to have delivered the goods when they are loaded onto the ship at the port of shipment. This means that the buyer of the goods is responsible for all costs and risks of loss of or damage to the goods from that point on.

On an HO, theft of personal property of an insured who is a student is covered while at the residence the student occupies to attend school as long as

the student has been there at any time during the 90 days immediately before the loss.

Under a boiler and machinery policy an accident is defined as

the sudden and accidental breakdown of an object, or a part thereof, resulting in physical damage to the object that necessitates repair or replacement.

In a commercial crime insurance policy robbery is defined as

the taking of property from the care and custody of a person by someone who has caused or threatened to cause bodily harm.

An endorsement changes

the terms of the policy.

Other Than Collision coverage on a PAP will not cover

the theft of radar detectors, whether permanently installed or not.

The policy period is defined as

the time period the policy is in effect.

A licensee must provide an initial privacy protection notice to an individual no later than?

the time the licensee establishes a customer relationship.

Insurance is defined as?

the transfer of PURE risk to the insurance company in consideration for a premium.

A representation is defined as?

the truth to the best of your knowledge.

A basic form DP-1 will cover damage to a dwelling caused by a falling tree, but not

the value of the tree.

"Waiver" is defined as?

the voluntary giving up of a legal right.

All HO policies cover

theft of contents and damage done by burglars.

A crime insurance policy that provides 'off premises' coverage (such as a theft, disappearance and destruction policy) will cover

theft of money from a messenger.

An HO policy written on a dwelling under the course of construction will not cover

theft.

On a BOP, the optional endorsement designed to cover employee's property will not cover

theft.

Policies that provide open-peril (special form) coverage on contents, such as an HO-5, provide coverage for

theft.

An agent's binding authority, if any, is contained in?

their agent's contract.

Insureds purchase Uninsured Motorist coverage because of

their concern of being in an auto accident with someone who has no insurance and is at fault.

A producer's license shall state?

their name, mailing address, date of issuance, renewal date and the lines of insurance covered by the license.

The bankruptcy of an insured does not relieve the insurer of

their obligations under the policy.

The BOP was created so individuals could provide insurance coverage for

their small business.

Some Umbrella Liability policies are written to "follow form," which means

they do not provide broader coverage than the primary insurance.

If the Commissioner finds that a person has engaged in an unfair method of competition or an unfair or deceptive act?

they may issue a cease and desist order, levy monetary fines and suspend or revoke their license.

A PAP will not provide coverage for a separated spouse, since

they no longer reside with the named insured.

Whenever the Commissioner believes that any person is engaging in any unfair trade practice?

they shall issue a notice of wrongful conduct, citing which law has been broken.

Renewal or other deferred commissions may be paid to a person if?

they were licensed at the time of the sale.

On Workers Compensation insurance, Other States Coverage will only apply to

those states that are listed on the Declarations Page of the policy.

In Homeowners and Personal Automobile Policies, expenses related to Medical Payments must be submitted to the insurance company within

three years of the date of loss.

To lower their 'loss ratio', an insurer will

tighten their underwriting requirements.

A PAP will not cover wear to

tires caused by road conditions.

The underwriter's main duty is

to approve acceptable risks on behalf of the insurer.

Subrogation allows the insurer to try

to collect what they paid you from a negligent party that caused bodily injury or property damage.

The purpose of insurance regulation is?

to protect the public interest.

On a PAP, the "basic" towing and labor endorsement provides coverage for

towing and labor in the amount of $25 per disablement.

Commercial Fire policies only cover

trees, shrubs and plants up to $250 each.

Dwelling Fire and HO policies both cover damage to

trees, shrubs and plants, up to $500 each.

Although the DP-1 Basic Form does not provide coverage for

trees, shrubs, plants and lawns, both the DP-2 and DP-3 do.

On an occurrence commercial general liability policy, it is the occurrence, which must occur during the policy period, that

triggers coverage, not when it is turned in. In a claims-made commercial general liability policy it is the claim, which must occur during the policy period, or during any extended reporting period, that triggers coverage.

An Occurrence Basis Liability policy covers claims that occur in the policy period, even if

turned in after the expiration date.

The "pro rata" liability (or other insurance) clause on a property policy allows

two or more policies insuring the same property to pay claims proportionately.

On a PAP, Collision and Other Than Collision (OTC) coverages are subject to

two separate and distinct deductibles.

Under workers compensation, "supplemental earnings benefits" may be awarded when an employee is?

unable to earn wages equal to 90% or more of their wages at the time of their injury.

Surplus Lines coverage is usually sold by?

unauthorized companies, such as Lloyd's of London.

It is unlawful for a producer to sell insurance on behalf of an?

unauthorized insurer, except through a licensed surplus lines broker.

A policy may not be voided due to?

unequal consideration.

In order for additional living expense coverage to apply, the covered loss must cause the property to be

uninhabitable.

Exclusions eliminate

uninsurable perils (like flood).

Although a non-owned car that you drive on a "regular use" basis is not covered on your PAP, it is not considered to be an

uninsured motor vehicle, since the owner's policy will provide coverage.

Under auto UM, autos covered by self-insured plans or a surety bond are not considered to be

uninsured.

Medical expenses are covered by Workers Compensation on an

unlimited basis.

Temporary licenses may be issued, without exam, for?

up to 180 days to the surviving spouse or next of kin of a licensed producer who dies or becomes disabled.

Auto rates may be based upon the

use of the car, the garaging address and the age, gender and driving record of the driver.

According to the common conditions section of a BOP, an insurer may cancel a policy if the building has been

vacant or unoccupied for 60 or more consecutive days.

Insurers and producers may not pay a commission to any person for selling, soliciting, or negotiating insurance unless such person holds a?

valid license as required by law.

An insurance rate is a

value used to measure the premium charged for the coverage provided, such as a rate per $100 of value to be insured. The premium, then, is the rate multiplied by the number of units of insurance purchased.

If a dwelling has been vacant for 60 days neither

vandalism or malicious mischief or breakage of glass will be covered.

On a BOP, if the building has been vacant for more than 60 consecutive days, there is no coverage for

vandalism, sprinkler leakage, glass breakage, water damage or theft.

Surplus Lines coverage is written by

various unauthorized companies, not just Lloyds of London.

Louisiana has a Compulsory Motor Vehicle Liability Safety law which requires?

vehicles to be covered by auto liability insurance, a surety bond, cash or securities deposited with the state treasurer or a satisfactory certificate of self-insurance.

If a landlord fails to properly maintain a rental property, they have

violated a legal duty.

If the insured commits fraud or material misrepresentation it could cause the policy to be

voided.

DP policies contain general exclusions for damage due to

war, nuclear hazard and flood, but not wind.

Under a CGL, an insured's 'products' include

warranties of the product, warnings on how to use the product and containers, but not vending machines selling the product.

Renewal or other deferred commissions may be paid to a person who?

was properly licensed at the time the sale was made.

Federal flood insurance will cover

water damage resulting from the rapid runoff of surface waters on the insured's own property, but it will not cover landslide or mudslide.

An HO policy will not cover theft that occurs off the residence premises of

watercraft, their furnishings, equipment and outboard motors.

On the PAP, exclusions under Other Than Collision include

wear and tear, freezing and mechanical breakdown.

Typical exclusions on an open-peril (special form) policy include

wear and tear, war, inherent vice and damage caused by birds, rodents or insects.

Flood insurance will not cover

wharves, piers or docks.

When a property/casualty policy contains a provision entitled "contribution by equal shares", it means that

when two policies cover the same loss, each insurer will pay the claim equally, until their limits are exhausted.

The Commissioner may exam an authorized insurer how much?

whenever necessary to protect the public.

On a liability policy, refer to the exclusions to determine

which expected or intended acts are covered.

Insurers may 'arbitrate' against one another to determine

which insurer is liable for a loss.

Adjusters must disclose

which part of the policy a claim denial is based upon.

On a Businessowners policy (BOP), loss of business income is covered

without dollar limit for a maximum of 12 months.

How much will The P&C Guaranty Association will pay the claims of insolvent workers compensation insurers?

without limit.

By law, all employers must provide?

workers compensation insurance for their employees.

An Excess Limits policy, such as an umbrella, is one

written over and above a primary policy.

Unoccupied means

you are on an extended vacation, but your furniture is still there and you will return.

Your own PAP will not cover

you driving a non-owned auto furnished for your regular use.

Vacancy means

you have moved out of your home and taken your furniture with you.

A first-party claim is presented by

you to your insurer when your house burns down.

While PD Liability on a PAP excludes damage to your own property, damage to your own garage is covered by

your HO if you run in to it.

Your PAP does not cover

your own property in transit.

Your PAP will not cover anyone using your covered auto without

your permission, unless they are a family member.