LOUISIANA PROPERTY AND CASUALTY
INSURANCE EXAM LATEST 2024 ACTUAL
QUESTIONS AND CORRECT ANSWERS
|GRADED A+
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must
be replaced. The new roof will cost $6,000 at today's prices. If the roof has been depreciating at
$200 per year and the insured's policy is written on the actual cash value(ACV), how much will
the policy pay toward the insured's new roof? - ANSWER>>$5,000
A property insurance policy which pays a specified amount in the event of a total loss which is
not related to the extent of the actual financial loss, is called - ANSWER>>A valued policy.
Which method of loss valuation is contrary to the basic concept of indemnity? -
ANSWER>>Replacement cost
Where is the policy period stated? - ANSWER>>On the declarations page of the policy
The part of the insurance contract that describes the covered perils and the nature of coverage
of the contractual agreement between the insurer and the insured is called the -
ANSWER>>Insuring agreement.
The abandonment provision in property insurance policies states that - ANSWER>>The insured
may not relinquish ownership of damaged property to claim a total loss, but must protect
damaged property from further loss.
All of the following are found in the declarations section of a policy EXCEPT the -
ANSWER>>Exclusions.
The other insurance provision that limits the liability of the insurer to a portion of the loss no
greater than the amount the insurer bears to all the insurance covering the property is called -
ANSWER>>Pro rata liability.
The ABC Corporation has $100,000 of coverage on its building through insurance Company A,
and $50,000 of identical coverage on the same building through insurance Company B.
Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is
, used, how much will each insurer pay? - ANSWER>>Company A will pay $16,000; Company B
will pay $8,000.
When real property insured under a fire policy is totally destroyed by fire, which of the
following conditions would prevent the Nebraska valued policy law from being applied to the
loss settlement? - ANSWER>>The fire was determined to be an arson by the insured
The insured's house is located one mile from the county's new landfill and across the road from
the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something
happened to it, but when the insured tried to sell it, the best offer he received was $80,000.
The insurance company will insure the house for only $80,000. What method of valuation is
used to insure this property? - ANSWER>>Market value
Illegal use of narcotics would be an example of a - ANSWER>>Moral hazard.
Which part of an insurance policy covers claims-related expenses, reasonable expenses
incurred by an insured to protect damaged property from further loss, or defense expenses? -
ANSWER>>Additional coverage
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? - ANSWER>>The loss is payable to the insured and the mortgagee.
An insured's business is damaged because of a fire, and he is forced to close the business
temporarily for repairs. As a result, the insured lost income. What type of loss is this? -
ANSWER>>Consequential
Which of the following is defined as the cost to replace damaged property with less expensive
and more modern construction or equipment? - ANSWER>>Functional replacement cost
Which of the following provisions requires that the insured protects the damaged property
from further damage, cooperates with the insurer in settling the loss, and submits to the
insurer signed proof of loss within a specified period of time? - ANSWER>>Duties after loss
Which of the following terms describes the concept of disrupting the chain of events? -
ANSWER>>Intervening cause
INSURANCE EXAM LATEST 2024 ACTUAL
QUESTIONS AND CORRECT ANSWERS
|GRADED A+
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must
be replaced. The new roof will cost $6,000 at today's prices. If the roof has been depreciating at
$200 per year and the insured's policy is written on the actual cash value(ACV), how much will
the policy pay toward the insured's new roof? - ANSWER>>$5,000
A property insurance policy which pays a specified amount in the event of a total loss which is
not related to the extent of the actual financial loss, is called - ANSWER>>A valued policy.
Which method of loss valuation is contrary to the basic concept of indemnity? -
ANSWER>>Replacement cost
Where is the policy period stated? - ANSWER>>On the declarations page of the policy
The part of the insurance contract that describes the covered perils and the nature of coverage
of the contractual agreement between the insurer and the insured is called the -
ANSWER>>Insuring agreement.
The abandonment provision in property insurance policies states that - ANSWER>>The insured
may not relinquish ownership of damaged property to claim a total loss, but must protect
damaged property from further loss.
All of the following are found in the declarations section of a policy EXCEPT the -
ANSWER>>Exclusions.
The other insurance provision that limits the liability of the insurer to a portion of the loss no
greater than the amount the insurer bears to all the insurance covering the property is called -
ANSWER>>Pro rata liability.
The ABC Corporation has $100,000 of coverage on its building through insurance Company A,
and $50,000 of identical coverage on the same building through insurance Company B.
Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is
, used, how much will each insurer pay? - ANSWER>>Company A will pay $16,000; Company B
will pay $8,000.
When real property insured under a fire policy is totally destroyed by fire, which of the
following conditions would prevent the Nebraska valued policy law from being applied to the
loss settlement? - ANSWER>>The fire was determined to be an arson by the insured
The insured's house is located one mile from the county's new landfill and across the road from
the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something
happened to it, but when the insured tried to sell it, the best offer he received was $80,000.
The insurance company will insure the house for only $80,000. What method of valuation is
used to insure this property? - ANSWER>>Market value
Illegal use of narcotics would be an example of a - ANSWER>>Moral hazard.
Which part of an insurance policy covers claims-related expenses, reasonable expenses
incurred by an insured to protect damaged property from further loss, or defense expenses? -
ANSWER>>Additional coverage
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? - ANSWER>>The loss is payable to the insured and the mortgagee.
An insured's business is damaged because of a fire, and he is forced to close the business
temporarily for repairs. As a result, the insured lost income. What type of loss is this? -
ANSWER>>Consequential
Which of the following is defined as the cost to replace damaged property with less expensive
and more modern construction or equipment? - ANSWER>>Functional replacement cost
Which of the following provisions requires that the insured protects the damaged property
from further damage, cooperates with the insurer in settling the loss, and submits to the
insurer signed proof of loss within a specified period of time? - ANSWER>>Duties after loss
Which of the following terms describes the concept of disrupting the chain of events? -
ANSWER>>Intervening cause
