4/10/25, 9:17 PM Louisiana Personal Lines Insurance Exam
Louisiana Personal Lines Insurance Exam NEWEST
VERSION QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+
Driver A has a personal c) $50,000
auto policy with Part C:
UM/UIM limits of 100/300. Underinsured motorist coverage acts as excess over the
He is at-fault motorist's coverage. It will pay the difference
injured by Driver B who has between the insured's UIM limits and the at-fault
Part A: Bodily Injury driver's bodily injury limits (in this scenario, $100,000 of
Liability limits of 50/100. It the insured's coverage minus $50,000 of the other
is driver's). Because of the per person limits of Driver A's
determined that Driver B is at underinsured
fault for the accident. Driver A motorist coverage, the policy will pay the amount
has $125,000 in medical necessary to bring payment up to the per person limit.
expenses. How much will The policy will not pay more than the limits of liability.
his Part C: UM/UIM
coverage pay?
a) $125,000
b) $75,000
c) $50,000
d) $25,000
1/55
,4/10/25, 9:17 PM Louisiana Personal Lines Insurance Exam
Which of the following is NOT A. To minimize the insured's level of liability in the event of loss
a goal of risk retention?
Retention usually results from three basic desires of the
A. To minimize the insured's insured: to reduce expenses and improve cash flow, to
level of liability in the event increase control of claim reserving and claims
of loss settlements, and to fund losses that cannot be
B. To reduce expenses and insured.
improve cash flow
C. To increase control of
claim reserving and
claims settlements
D. To fund losses that cannot
be insured
Pertaining to insurance, D. Promptly forwarding premiums to the insurance company
what is the definition of a
fiduciary responsibility? Fiduciary refers to a position of trust. When an agent is
handling the premiums that belong to an insurance
A. Helping insureds to file company, they are acting in a fiduciary capacity.
claims
B. Performing reviews of
insured's coverage
C. Offering additional coverage
to clients
D. Promptly forwarding
premiums to the
insurance company
2/55
,4/10/25, 9:17 PM Louisiana Personal Lines Insurance Exam
Who might receive dividends C. Policyholders
from a mutual insurer?
A mutual insurer has no stock, and is owned by the
A. Stockholders policyholders. Since they may receive a dividend (not
B. Agents guaranteed), such policies are known as participating
C. Policyholders policies. Dividends received by policyholders of a mutual insurer
are not taxable.
D. Subscribers
What documentation grants C. Agent's contract with the principal
express authority to an
agent? The principal grants authority to an agent through the agent's
contract.
A. Fiduciary contract
B. State provisions
C. Agent's contract with the
principal
D. Agent's insurance license
If a court ordered payment B. Reasonable expectations
for a loss that was not
covered in the policy even if it If, because of advertising or sales literature or
was clearly worded, it would statements by an agent, an insured could reasonably
be an example of which expect the coverage, the courts have held that the
legal concept? insurer must provide that coverage.
A. Indemnity
B. Reasonable expectations
C. Cease and desist
D. Nonforfeiture
3/55
, 4/10/25, 9:17 PM Louisiana Personal Lines Insurance Exam
Following a career change, an A. Reduction
insured is no longer required
to perform many physical The insured's change in lifestyle and habits would likely
activities, so he has reduce the chances of health problems.
implemented a
program where he walks and
jogs for 45
minutes each morning. The
insured has also eliminated
most fatty foods from his
diet. Which method of dealing
with risk does this scenario
describe?
A. Reduction
B. Transfer
C. Avoidance
D. Retention
Which of the following does C. Negligence that leads to an injury
the term proximate cause
refer to? Proximate cause is the reasonably foreseeable act or
event that results in an injury or damage. Negligence
A. Duty of the defendant to may often be the proximate cause of the damage;
act without it, the accident would not have happened.
B. Reason for filing a lawsuit This is also called direct liability.
C. Negligence that leads to an
injury
D. Injury that leads to
monetary compensation
4/55
Louisiana Personal Lines Insurance Exam NEWEST
VERSION QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES (VERIFIED
ANSWERS) |ALREADY GRADED A+
Driver A has a personal c) $50,000
auto policy with Part C:
UM/UIM limits of 100/300. Underinsured motorist coverage acts as excess over the
He is at-fault motorist's coverage. It will pay the difference
injured by Driver B who has between the insured's UIM limits and the at-fault
Part A: Bodily Injury driver's bodily injury limits (in this scenario, $100,000 of
Liability limits of 50/100. It the insured's coverage minus $50,000 of the other
is driver's). Because of the per person limits of Driver A's
determined that Driver B is at underinsured
fault for the accident. Driver A motorist coverage, the policy will pay the amount
has $125,000 in medical necessary to bring payment up to the per person limit.
expenses. How much will The policy will not pay more than the limits of liability.
his Part C: UM/UIM
coverage pay?
a) $125,000
b) $75,000
c) $50,000
d) $25,000
1/55
,4/10/25, 9:17 PM Louisiana Personal Lines Insurance Exam
Which of the following is NOT A. To minimize the insured's level of liability in the event of loss
a goal of risk retention?
Retention usually results from three basic desires of the
A. To minimize the insured's insured: to reduce expenses and improve cash flow, to
level of liability in the event increase control of claim reserving and claims
of loss settlements, and to fund losses that cannot be
B. To reduce expenses and insured.
improve cash flow
C. To increase control of
claim reserving and
claims settlements
D. To fund losses that cannot
be insured
Pertaining to insurance, D. Promptly forwarding premiums to the insurance company
what is the definition of a
fiduciary responsibility? Fiduciary refers to a position of trust. When an agent is
handling the premiums that belong to an insurance
A. Helping insureds to file company, they are acting in a fiduciary capacity.
claims
B. Performing reviews of
insured's coverage
C. Offering additional coverage
to clients
D. Promptly forwarding
premiums to the
insurance company
2/55
,4/10/25, 9:17 PM Louisiana Personal Lines Insurance Exam
Who might receive dividends C. Policyholders
from a mutual insurer?
A mutual insurer has no stock, and is owned by the
A. Stockholders policyholders. Since they may receive a dividend (not
B. Agents guaranteed), such policies are known as participating
C. Policyholders policies. Dividends received by policyholders of a mutual insurer
are not taxable.
D. Subscribers
What documentation grants C. Agent's contract with the principal
express authority to an
agent? The principal grants authority to an agent through the agent's
contract.
A. Fiduciary contract
B. State provisions
C. Agent's contract with the
principal
D. Agent's insurance license
If a court ordered payment B. Reasonable expectations
for a loss that was not
covered in the policy even if it If, because of advertising or sales literature or
was clearly worded, it would statements by an agent, an insured could reasonably
be an example of which expect the coverage, the courts have held that the
legal concept? insurer must provide that coverage.
A. Indemnity
B. Reasonable expectations
C. Cease and desist
D. Nonforfeiture
3/55
, 4/10/25, 9:17 PM Louisiana Personal Lines Insurance Exam
Following a career change, an A. Reduction
insured is no longer required
to perform many physical The insured's change in lifestyle and habits would likely
activities, so he has reduce the chances of health problems.
implemented a
program where he walks and
jogs for 45
minutes each morning. The
insured has also eliminated
most fatty foods from his
diet. Which method of dealing
with risk does this scenario
describe?
A. Reduction
B. Transfer
C. Avoidance
D. Retention
Which of the following does C. Negligence that leads to an injury
the term proximate cause
refer to? Proximate cause is the reasonably foreseeable act or
event that results in an injury or damage. Negligence
A. Duty of the defendant to may often be the proximate cause of the damage;
act without it, the accident would not have happened.
B. Reason for filing a lawsuit This is also called direct liability.
C. Negligence that leads to an
injury
D. Injury that leads to
monetary compensation
4/55
