Property and Casualty Exam Louisiana with Complete Solutions!

Roy brought his house 10 years ago for 150,000 but it would cost 200,000 to rebuild it today. Because his house is in a highly desirable area, it's Fair Market Value $275,000. What amount should the agent recommend that Roy insure his house for to provide replacement cost for a total loss? A) 150,000 B) 160,000 C)275,000 D) the ACV of the house - ANSWER-B) 160,000 A participating company headquartered in a Guam authorized to do business in your state would be described as which company? A) an admitted, foreign mutual company B) an admitted, alien mutual company C) an authorized foreign stock company D) an authorized alien mutual company - ANSWER-A) an admitted, foreign mutual company Ned purchases his business insurance on a calendar year basis. Even though his $10,000 premium is pre-paid through December 31 he decides to cancel on July 1 because he is selling his business. If he is due a prorated refund what should he receive? - ANSWER-A) Somewhat more than 5,000 B) Somewhat less than 5,000 C) 5,000 ** D) imposible to determine from the information given A company has Liability insurance from two policies written for different amounts. If the company sustains a covered loss, how are the laws be paid? - ANSWER-A)Double benefits will be paid B)The policy purchased first will pay the entire claim C) Pro rata benefits equal to the proportion of the policy limits each will be paid **** D) No benefits are payable since this is illegal Which type of hazard is it example of a person who increases the chance of loss through carelessness or irresponsible actions? - ANSWER-A) Moral hazard B) Physical hazard C) Morale Hazard **** D) Reckless Hazard With a commercial lines policy, who does The insurance company deal directly with on issues like claims, renewals, and policy changes? - ANSWER-A) Insured B) Named Insured C) Loss payee D) First named insured*** Which of the following is eligible for a business owners policy? - ANSWER-A) Contractor with payroll of 500,000 B) a convenience store with a gasoline pump *** C) an owner occupier four family dwelling with three residential units D) motor vehicles subject to motor vehicle registration What should be reviewed to determine if a particular loss is covered by an H03? - ANSWER-A)Declarations B)Insuring Clause C) Conditions D) Exclusions ***** Which of the following best defines a personal insurance contract? - ANSWER-The insurance contract is designed to transfer risk from the insured to the insurer. A policy owner is considering upgrading his homeowners coverage from H -O2 to an H-O3 w