Louisiana Property & Casualty Exam - PSI & ExamFX

A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called...

Claims-made form

According to the Insured Duties after a Loss provision in homeowners policies, in the event of loss, the insured must do all of the following EXCEPT...

a) Promptly hire an adjuster to evaluate the property damage. Hiring an adjuster is not one of the requirements for the insured. The rest of the options are required insured's duties.

Coverage B - Personal and Advertising Injury Liability responds to claims arising from...

a) Suits alleging infringement of a copyright. Coverage B combines both personal injury and advertising injury into a single insuring agreement and limit of liability.

Which of the following is a federal act that covers crews of ships the same as railroad workers?

a) The Jones Act The Jones Act is a federal act that covers ships' crews with the same remedy available to railroad workers.

All of the following are true about the cancellation provision of a commercial insurance policy EXCEPT...

a) The insurer is required to provide proof that the insured received the cancellation notice prior to cancelling the policy. If the notice of cancellation is mailed, the insurance company is not required to prove that the insured actually received the notice. It is required to prove only it was mailed to the first named insured at the mailing address as shown on the policy.

Insureds covered under a Mobile Homeowners Policy move their mobile home to prevent it from being damaged by a fire. What is the maximum amount the policy will pay for this?

b) $500 A Mobile Homeowners Policy will pay up to $500 if the insured moves the mobile home to a safer area to protect it from loss by a covered peril.

If a producer allows his license to lapse, within what time period may the producer reinstate the same license?

b) 2 years Producers who allow their license to lapse may reinstate them same license within 2 years, upon proof of fulfilling all continuing education requirements through the date of reinstatement, & by paying all overdue fees.

What is the waiting period for transportation expenses coverage for a loss other than theft of a covered vehicle?

b) 24 hours Expense payments begin after a 24- hour waiting period for reasons other than theft.

Which of the following would NOT be eligible for coverage under a personal auto policy?

b) A vehicle purchased 90 days ago A covered auto includes automobiles listed in the declarations, owned trailers, newly acquired autos (for 30 days), nonowned temporary substitute vehicles, and additional temporary vehicles due to repair, servicing, breakdown, or loss.

Under a commercial general liability policy, which of the following is NOT considered mobile equipment?

b) An automobile used as a company car by a real estate company Mobile equipment is defined as bulldozers, farm machinery, forklifts and other vehicles, including attached equipment, designed for use off public roads; vehicles maintained for use solely on or next to the insured premises; vehicles that travel on crawler treads; vehicles used primarily to provide mobility to power cranes; loaders, diggers, drills; any other road construction or resurfacing equipment.

Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. Which of the following statements is NOT true of this coverage?

b) Any loss paid under Coverage B reduces the Coverage A limit of liability. The automatic limit for Coverage B is 10% of the limit of liability that applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability.

Rita drops off her wedding down at Vicky's Dry Cleaners for a final pressing. The store's press breaks, so Vicky takes Rita's dress to her other store across town. On the way to the other store, Vicky is held at gunpoint until she gives the man the wedding dress. What crime coverage form would pay for the loss of the gown in this situation?

b) Extortion - Commercial Entities

Which of the following injuries under Coverage C - Medical Payments of a commercial general liability policy?

b) Injuries to a member of the general public that occurs on premises Medical payments coverage makes payment of necessary medical & first aid for injuries to third parties occurring on the insured premises, regardless...

The garage coverage from is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. Which of the following coverages are not included in a garage policy?

b) Physical damage on a customer's auto The garage policy has a care, custody and control exclusion which would eliminate coverage for any damage to a customer's auto. This exposure would need to be covered under a garagekeepers policy.

The defendant being released on a surety bail bond is the

b) Principal. The defendant has made a promise to show up in court at the specified time. The principal makes a promise to perform.

A agent's license may be suspended or revoked for all of the following reasons EXCEPT...

b) Sharing commissions with another agent. The Commissioner has the power to suspend, revoke, or refuse to renew a producer's license for failure to comply with the Insurance Code or licensing regulations, as well as for fraud and failure to pay income taxes, among other violations. Sharing commissions is allowed as long as both agents are properly licensed.

A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damage, why would its commercial general liability policy cover the customer's claim for bodily injury?

b) The appliance was manufactured in the U.S. Coverage territory means anywhere in the world if injury or damage results from goods or products manufactured or sold in a coverage territory.

An insured has $5,000 of medical coverage under a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. The insured's medical expenses are $8,000. The first passenger's total $4,000; the second passenger's total $6,500; and the third passenger's total $1,200. How much will the policy pay under the medical payments coverage?

c) $15,200 The medical payments coverage is provided by a limit of liability per person. In this example, the limit for the policy is $5,000 per person, so the policy will pay the maximum ($10,000) for the insured and the second passenger because their medical expenses exceed the limit. All of the expenses for the first passenger and third passenger would be paid ($5,200). The grand total paid under medical expenses is $15,200.

How long is the period of time in which a licensee must renew his or her license?

c) 90 days prior to expiration Licensees may renew their license 90 days prior to its expiration.

Which of the following perils is NOT covered the DP-2?

c) Damage to pets, birds, or fish DP-2 covers perils caused by breakage of glass, weight of ice 7 snow, or falling objects. Not damage to pets, birds or Fish

Which is NOT true of workers compensation coverages?

c) Medical Payment benefits are limited. Workers compensation medical payments are unlimited.

Which provision defines how the policy will respond if there is other valid insurance written on the same risk?

c) Other insurance Other insurance is a provision in an insurance policy that defines how the policy will respond if there is other valid insurance written on the same risk.

Which of the following perils will be EXCLUDED from coverage under HO-4 Tenant Broad Form of a homeowners policy?

c) Sewer water backup Water damage, including sewer water backup, is among general property exclusions for all HO policy forms.

The owner of a rental dwelling, insured under a DP-2, turns off the heat in the insured dwelling during the winter months because the dwelling is not occupied. The building's water pipes freeze and break, causing damage. How will the policy react to this loss?

c) This loss is excluded from coverage. Freezing and breaking of pipes is not covered unless the insured maintains heat in the building.

Which of the following would be eligible for Homeowners Coverage F - Medical Payments in the event of injury at the insured's premises?

d) A full-time maid Medical payments on the HO policy cover costs incurred for up to three years after the accident. Coverage does not apply to any insured or a regular resident of the premises, except resident employees not covered by workers compensation.

Which of the following terms means termination of an insurance policy at its expiration date by not offering a policy continuation or replacement?

d) Nonrenewal Nonrenewal is the termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy.

HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year?

d) Peak season The peak season endorsement provides higher limits when needed for a known time period. Reporting forms are appropriate for risks whole value fluctuate both up an down throughout the policy period.

Which of the following types of property would be covered under Coverage C - Personal Property in a dwelling policy?

d) Rowboats Aircraft designed for flights 7 carrying people, motor vehicles, and motor-powered boats are excluded. However, rowboats & canoes would be covered.

Which of the following would qualify as a competent party in an insurance contract?

d) The applicant has a prior felony conviction.

The limit on controlled business is...

25%

The commercial general liability Coverage Part A - Bodily Injury & Property Damage provides coverage for which of the following?

a) Premises Premises, operations, products, and completed operations coverage are included in a general liability coverage part.

An applicant may challenge information discovered as a result of an investigative consumer report under which of the following Acts?

a) Fair Credit Reporting Act The federal Fair Credit Reporting Act regulates consumer investigative reports that are ordered in connection with applications for credit, insurance or employment. If an insurer takes adverse action against an applicant based upon incorrect information received in a credit report, the Act contains procedures for the applicant to follow in order to get it corrected, without the need to file a lawsuit.

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?

a) 3 days If a consumer report is requested, the insurer must notify the consumer at least 3 following the initial request.

What type of policy, which may be added by endorsement or purchased separately, may an insured purchase in order to provide coverage for other types of contracts?

a) A contractual liability policy In order to provide coverage for other types of contracts, the insured may purchase a contractual liability policy, which may be added by endorsement or purchased separately. With this coverage, the insurer agrees to pay for bodily injury or property damage liability that the insured has agreed to assume under a written contractual agreement.

Which of the following risks would be eligible for coverage under a dwelling policy form?

a) A duplex that is occupied by two families, each of which have a bedroom rented to a broader. Eligible dwelling properties do not need to be exclusively residential, but any incidental business must provide service rather than sales and must not have more than 2 persons working on the premises. Risk cannot be located on a farm.

The obligation to compensate injured workers without regard to fault or negligence is known as...

a) Absolute liability. Absolute liability is the obligation to compensate injured workers without regard to fault or negligence.

In order to get a nonresident license in Louisiana, producers must

a) Apply & pay a fee to a nonresident state that reciprocates In order to get a nonresident license in this state, producers must apply & pay a fee to a nonresident state that reciprocates.

Two men are partners in a moving company. They have two trucks used to move property of others. They should insure their trucks under a ...

a) Business auto policy The business auto policy would be the correct policy to insure vehicles used in business. A minimum of 5 vehicles would be necessary to insure as a fleet.

Which of the following is NOT found in a commercial package policy?

a) Common policy declarations b) Interline endorsements c) Certificate of authority d) Common policy conditions

Which of the following entities is eligible for a businessowners policy?

a) Convenience stores Convenience stores are eligible for coverage.

Which of the following statements is NOT true of a commercial umbrella liability policy?

a) It would automatically cover all losses as they occur. There is usually a minimum limit of liability the insured must carry & maintain on the basic policies, such as $1,000,000 for commercial risks. In addition, there are usually retained limits (called a self-insured retention, or SIR) that the insured must satisfy before the umbrella policy will respond to certain kinds of losses.