General Insurance Property & Causality
Louisiana exam questions and answers
The owner of a small business applies for a fire insurance policy with limits equal to
100% of the property's value. The owner has huge unsold inventories and a large
personal gambling debt. From an underwriting standpoint, this might indicate - Answer-
A moral hazard
Which of the following best describes an insurance company that has been formed
under the laws of this state? - Answer-Domestic
Which are the following are the authorities that an agent can hold? - Answer-Expressed
and Implied
An insurer has made all of the decisions regarding the provisions included in the
insured's policy. The insured finds an objectionable provision and wants to negotiate it
with the insurer but is not allowed to do so. Her only option is to reject the policy or
accept it as is. Which contract feature does this describe? - Answer-Adhesion
The causes of loss insured against an insurance policy are known as - Answer-Perils
Which of the following is a unit of measurement an underwriter uses when determining
the premium rates of insurance? - Answer-Exposure
Illegal use of narcotics would be an example of a - Answer-Moral Hazard
An insured pays $100 premium every month for his insurance coverage, yet the insurer
promises to pay $10,000 for a covered loss. What characteristics of an insurance
contract does this describe? - Answer-Aleatory
Because an agent is using stationary with logo of an insurance company, applicants for
insurance assume that the agent is authorized to transact on behalf of that insurer.
What type of agent authority does this describe/ - Answer-Apparent
All of the following are examples of risk retention except - Answer-Premiums
A situation in which a person can only lose or have no change represents - Answer-
Pure Risk
In insurance policies, the insured is not legally bound to any particular action in the
insurance contract, but the insurer is legally obligated to pay losses covered by the
policy. What contract element does this describe? - Answer-Unilateral
Louisiana exam questions and answers
The owner of a small business applies for a fire insurance policy with limits equal to
100% of the property's value. The owner has huge unsold inventories and a large
personal gambling debt. From an underwriting standpoint, this might indicate - Answer-
A moral hazard
Which of the following best describes an insurance company that has been formed
under the laws of this state? - Answer-Domestic
Which are the following are the authorities that an agent can hold? - Answer-Expressed
and Implied
An insurer has made all of the decisions regarding the provisions included in the
insured's policy. The insured finds an objectionable provision and wants to negotiate it
with the insurer but is not allowed to do so. Her only option is to reject the policy or
accept it as is. Which contract feature does this describe? - Answer-Adhesion
The causes of loss insured against an insurance policy are known as - Answer-Perils
Which of the following is a unit of measurement an underwriter uses when determining
the premium rates of insurance? - Answer-Exposure
Illegal use of narcotics would be an example of a - Answer-Moral Hazard
An insured pays $100 premium every month for his insurance coverage, yet the insurer
promises to pay $10,000 for a covered loss. What characteristics of an insurance
contract does this describe? - Answer-Aleatory
Because an agent is using stationary with logo of an insurance company, applicants for
insurance assume that the agent is authorized to transact on behalf of that insurer.
What type of agent authority does this describe/ - Answer-Apparent
All of the following are examples of risk retention except - Answer-Premiums
A situation in which a person can only lose or have no change represents - Answer-
Pure Risk
In insurance policies, the insured is not legally bound to any particular action in the
insurance contract, but the insurer is legally obligated to pay losses covered by the
policy. What contract element does this describe? - Answer-Unilateral
