Louisiana Property and Casualty Practice Exam.

What is a hazard?

An increase in the possibility that a loss might occur

the purpose of insurance is to?

Transfer risk from a person, business, or organization to an insurance company that agrees to pay for losses in exchange for a premium.

mutual company

type of insurance company in which the policyholder is considered an owner, with the right to vote and share in the profits.

$50

the renewal fee for a Louisiana producer license.

b McCarran-Ferguson Act

the federal law that says the federal government can only regulate insurance companies to the extent they are not regulated by state law.

Adhesion Contract

an insurance policy is prepared by the insurance company, with little or no input from the insured. this means that an insurance policy is a

HO-6

an individual who owns and lives in a condominium can obtain broad coverage for personal property in the condo under which Homeowners form?

experience rating

what rating method involves modifying the premium based on the insured's loss experience over a specified period of time?

pain and suffering

which type of benefits is generally not provided by a state's workers compensation law?

foreign

which of the following describes an insurance company doing business in a state other than the where it is incorporated?

open peril policy

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

replacement cost-depreciation

which of the following describes actual cash value?

Actual Cash Value (ACV)

Recplacement Cost - Depreciation Cost

$5000

an insured purchased new furniture for $6000. At the time of a fire loss, it had depreciated $2000. The same furniture will cost $7000 to replace. What is the actual cash value of the destroyed furniture?

Loss of income resulting from property damage at the insured's property

the primary purpose of the business income coverage forms is to reimburse the insured for?

HO-2

the homeowners form that provides open peril coverage on the dwelling and broad coverage on personal property is the...

damage from an explosion caused by the centrifugal force of moving parts

which of the following losses to covered equipment would be covered under the EQUIPMENT BREAKDOWN PROTECTION coverage form?

10

according to the cancellation condition in the Common Policy-Conditions form, if the insurance company is cancelling a Commercial Package policy for nonpayment of premium, the insured must be given at least how many days notice of cancellation?

liability

which of the following coverages IS included in the Homeowners Policy but is NOT included in an unendorsed Dwelling policy?

HO-5

open peril coverage for both the dwelling and personal property is provided by the...

$48000

the insured's home is covered by a DP-3. Two years ago, the insured brought the home for $58000. Today, it's replacement value is $60000. How much coverage A does the insured need to qualify for replacement cost coverage ?

$50000

if an HO-3 policy has a coverage limit of $100000 on the dwelling, how much coverage would automatically apply to cover the insured's personal property under Coverage C?

Indemnification

which of the following insurance principles permits a policy holder to be reimbursed for losses experienced?

risk

uncertainty concerning financial loss best describes the concept of...

direct loss to the auto caused by collision with another object

collision insurance covers which of the following?

falling objects

all of the following perils are covered by a basic property insurance policy EXCEPT...

Subrogation

by entering into an insurance contract, a policy holder transfers the right of legal action against a responsible third party to the insurer. this process is known as...

hazard

a condition creating or increasing the chance for loss i known as a...

in the air or on the ground

aviation insurance provides an insured with liability protection while an insured is...

ACV

replacement cost less depreciation

reimburse the mortgagee for its interest in the damaged property

all of the following statements are correct regarding the duties of an insured following a loss except the insured must...

within 100 feet of the described premises

personal business property out in the open is covered under a commercial property policy only while...

binder

a short term proof of insurance coverage provided to an applicant until a policy can be produced is known as...

the claims made policy provides coverage fro claims first made during the policy period

What is the primary difference between a claims-made and occurrence form of a CGL policy?

Be covered under the broad form-dwelling policy

if a neighbor accidentally drives his vehicle into the insured's fence, this would...

bodily injury to the insured

uninsured motorist coverage in an auto policy provides payments for which of the following...

when a claim is reported and filed

in which of the following instances would coverage be triggered under a claims made form...

Risk of loss is a speculative risk

Which one of the following is NOT an element of insurability?

a. Loss must be calculable

b. Risk of loss must represent a financial harship

c. Cost of insurance must be affordable

d. Risk of loss is a speculative risk

declarations

What part of an insurance policy personalizes the policy as to who and what are insured?

outdoor curbside signs

each of the following is covered under a commercial property policy EXCEPT...

bailee policy

the owner of a Laundromat who dry-cleans clothing belonging to others would purchase which of the following...

$75000

jaime has an automobile policy with limits of $50000 per person and $100000 per occurrence. An accident occurs and two people are injured, one with $25000 in injuries and the other with $75000 in injuries. If Jaime is found responsible, what is the maximum amount his policy will pay for the injuries?

either by repairing or replacing the damaged part or by paying the difference between the actual cash value before and after the loss

the pair and set clause found in property insurance policies states that in the event of a loss to only part of a pair or set, losses will be settled...

Completed Operations Liability

an auto repairman forgets to replace the oil drain plug in a customer's engine that results in a loss of oil during the next several days. the loss of oil causes the engine o seize. Which of the following coverages would protect the repairman in this situation?

declaration page

a portion of an insurance contract that informs who and what is covered, in addition to when coverage is effective, is known as the...

costs the insured incurs in hiring their own attorney

all of the following are supplemental payments found in liability policies except...

conditions

a list of the insured's duties following a loss can be found in which of the following policy sections...

robbery

the dishonest taking of property while placing another person in fear of physical violence best describes...

property damage liability

if a driver loses control of his auto and damages the fence of a neighbor, the damages will be paid for by the drivers...

occurrence policy

tony has a liability policy that covers his business. Sometime during the policy period a loss occurs, but tony does not become aware of the loss until several years after his policy expires. Which of the following types of policies would cover the loss?