Louisiana Property and Casualty Exam Questions and Correct Answers

Specific Coverage Insures one property on one policy for one specific amount of insurance. One single property at one fixed location In 1980, G had a custom home built and purchased an HO-5 policy. In 2005, the house was sold to X who decided to purchase an HO-3 policy. In 2006, an electrical fire caused the home to suffer a TOTAL LOSS. What is correct about the loss. X is the only person that can collect on the loss because they were the insured at the time of loss. Insurable interest must exist at the time of the issuance and at the time of loss. Salvage value the estimated value of a fixed asset at the end of its useful life. when an insurer can recoup some loss paid to the insured after a property's useful life is over. M owned a factory warehouse that suffered a total loss due to a fire. The insurer discovers that they can scrap some of the metal beams left from the structure to recoup some of their loss paid to the insured. Which method of valuation would allow this to occur? Salvage value Fs toy company has just produced a childs toy that has sharp edges. Although Fs toy company guarantees the product is safe. if a child were to get hurt, the company would have Strict Liability Strict Liability The legal responsibility for damage or injury even if you are not negligent. applies to businesses that manufacture products. If product is defective, business is liable for all damages and no negligence need be proven Peril an immediate, specific cause of loss ex: fire, lightning, internal explosion