Property & Casualty

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

conditions

The part of a property policy that shows the amount of insurance, premium, and policy term is the

declarations

The part of a policy that clarifies terms in the policy is the

definitions

An insurer has just cancelled an insured's policy. How long does the insurer have to explain this cancellation?

6 months

A commercial policy has been in effect for less than 60 days and is not a renewal policy. If the insurer decides to cancel the policy for any reason other than nonpayment of premium, how much notice must it give the first named insured?

60 days

An insured's home is mortgaged by the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true?

Losses will be paid to the mortgagee and mortgagor as their interest appears

Which of the following does the term proximate cause refer to?

Negligence that leads to an injury

The abandonment provisions in property insurance policies states that

The insured may not relinquish ownership of damaged property to claim a total loss, but must protect damaged property from further loss

What will happen if a house covered by a standard mortgage cause is a total loss?

The insurer pays the mortgagee according to the mortgagee's interest in the property

Which of the following would NOT be classified as personal property for insurance purposes?

a house

The declarations page of the homeowners policy provides all of the following information EXCEPT

a statement that earthquake damage is not covered

The property condition that precludes the insured form simply turning over damaged property to the insurer and claiming a total loss is called

abandonment

Which part of insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

additional coverage

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?

adhesion

Which documentation grants express authority to be an agent?

agent's contract with the principal

Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur?

aggregate limit of liability

The insured's house is located one mile from the county's new landfill and across the road from the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something happened to it, but when the insured tried to sell it, the best offer he received was $80,000. The insurance company will insure the house for only $80,000. What method of valuation is used to insure this property?

market value

According to the standard mortgage clause, who has the right to bring a suit in their own name to recover damages, pay policy premiums, and submit a proof of loss?

mortgagee

Duties of the insurer found in property policy conditions include all of the following EXCEPT

notify the insured in the event of financial difficulty

In the event of a member insurer's insolvency, the Association's obligation to pay a covered claim is the lesser of the amount of the loss, the limits of the insurance coverage, or

$300,000

In the event that an insurance company is going to cancel an insurance policy, which of the following must receive written notice of their intent to cancel?

1. The named insured 2. A mortgage, if any 3. Any person shown on the policy as having a financial interest in any loss insured against

Insurers are required to pay the amount of any claim within

30 days of receiving a satisfactory proof of loss

The policy conditions define

How parties to the contract must act following a loss.

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

insuring agreement

An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?

per occurrence

All of the following are considered parts of the policy structure EXCEPT

provisions

In what way can an agent demonstrate a high standard of ethics?

putting the client's best interests before their own

A Standard Fire Policy may be written to cover all of the following EXCEPT

reinsurance

A type of policy that is used to provide a specific amount of replacement cost for a given risk after an insured property has ben destroyed is called a(n)

valued policy

Funding for the operation and administration of the Louisiana Insurance Guaranty Association comes from

annual assessments paid by member insurers

Which of the following describes contributory negligence?

any degree of negligence by the injured party may bar recovery

Insurable interest in a property policy must be proven

at the time of the loss

A policy which insures all property at multiple locations for a single amount is referred to as

blanket

Which of the following must an insurer obtain in order to transact insurance within a given state?

certificate of authority

Which of the following is a statutory defense?

comparative negligence

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

conditional

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

conditions

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

each policy will pay $25,000 of the loss

Which of the following is not included in a binder or temporary contract for a Standard Fire Policy?

effective hour that coverages commences

Which of the following would modify the original insurance contract by either adding or removing coverage?

endorsements

All of the following are found in the declarations section of a policy EXCEPT the

exclusions

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the

exclusions

The requirement that agents not commingle insurance monies with their own funds is known as

fiduciary responsibility

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

implied

All of the following are conditions commonly found in the insurance policy EXCEPT

insuring agreement

Melt Away Diet, Inc circulates a flyer that falsely reports that its competitor, Sea Food Diet, markets a product that causes hair loss and skin rashes. This is an example of

libel

An insurer may cancel or nonrenew a Homeowners policy based on any of the following, EXCEPT

loss resulting from an Act of God

Where is the policy period stated?

on the declarations page of the policy

What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?

open peril policy

Which of the following is not required to be printed at the head of a Standard Fire Policy?

policy exclusions

The value placed on property insured under a fire insurance policy is used to determine the policy's

premium

The policy that pays first in an event of a covered loss is known as the

primary policy

Which of the following is NOT one of the four primary elements considered in establishing negligence?

proof of carelessness

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?

reasonable expectations

Local sportscaster Fred Fillmore states on the air during a news telecast that the local pro football coach has a lousy record, which is untrue. This is an example of

slander

What are the two types of compensatory damages?

special and general

A nonadmitted insurer who provides insurance coverages that are not available from an insurer is called

surplus lines insurer