LOUISIANA PROPERTY AND CASUALTY

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LOUISIANA PROPERTY AND CASUALTY

INSURANCE EXAM

EXAM WITH CORRECT SOLUTIONS.

Driver A has a personal auto policy with Part C: UM/UIM limits

of 100/300. He is injured by Driver B who has Part A: Bodily

Injury Liability limits of 50/100. It is determined that Driver B is at fault for the accident. Driver A has $125,000 in medical

expenses. How much will his Part C: UM/UIM coverage pay?

• $125,000
• $75,000
• $50,000
• $25,000 - correct answer- c) $50,000

Underinsured motorist coverage acts as excess over the at- fault motorist's coverage. It will pay the difference between the insured's UIM limits and the at-fault driver's bodily injury limits (in this scenario, $100,000 of the insured's coverage minus $50,000 of the other driver's). Because of the per person limits of Driver A's underinsured motorist coverage, the policy will pay the amount necessary to bring payment up to the per person limit. The policy will not pay more than the limits of liability.

Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this 1 / 4

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endorsement to her homeowners policy, which of the following statements would be correct?

a) The endorsement becomes primary coverage and the HO

contract is secondary.

b) Coverage C limits will no longer apply to the jewelry insured

by the endorsement.

c) The amount of coverage will be doubled.

d) The endorsement becomes excess coverage. - correct

answer- b) Coverage C limits will no longer apply to the jewelry insured by the endorsement.

When items are scheduled, they are excluded from Coverage C as insured items, and are covered only under the scheduled personal property endorsement.

Which of the following terms refers to a person's ability to do some work or the need to do alternative work?

a) Temporary total disability

b) Temporary partial disability

c) Permanent partial disability

d) Permanent total disability - correct answer- b) Temporary

partial disability

The insuring agreement is the part of the policy structure that describes the insured perils and the method of indemnification. 2 / 4

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

a) It provides excess liability coverage over underlying personal

liability.

b) It provides errors and omissions coverage for an agency.

c) It may cover certain exposures not provided under the

primary layer.

d) It may require the payment of a self-insured retention. -

correct answer- b) It provides errors and omissions coverage for an agency.

Personal umbrella policies cover the personal exposure of the insured. Errors and omissions coverage is provided only in a professional liability policy.

A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true?

a) The entire loss is payable to the insured.

b) The loss is payable to the insured and the mortgagee.

c) The mortgagee should submit a claim to its insurer, and the

insured should submit a claim to the HO policy. 3 / 4

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d) The entire loss is payable to the mortgagee. - correct

answer- b) The loss is payable to the insured and the mortgagee.

Loss is payable to the insured and mortgagee to protect the mortgage company's interest. This prevents the insured from cashing the check and not completing repairs.

Under which type of coverage does the insurer agree to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement?

a) Bodily injury liability policy

b) Contractual liability policy

c) Personal liability policy

d) Property damage liability policy - correct answer- b)

Contractual liability policy

With this coverage, the insurer agrees to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement.

In a personal auto policy, the medical payments coverage is similar to

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