LOUISIANA INSURANCE EXAM PREP (TITLE),
LOUISIANA TITLE INSURANCE EXAM
QUESTIONS AND ANSWERS
CONTRACTS - Aleatory Contract - CORRECT ANSWER- A contract in which the
performance of either party's obligation depends on an uncertain event
INSURANCE - Benchmark Rate(s) - CORRECT ANSWER- The rate set annually by the
Commissioner of Insurance by line, relative to which the flexibility bands and statutory
rate limitations apply.
INSURANCE - Churning - CORRECT ANSWER- Can occur when an agent persuades
a consumer to borrow against an existing life insurance policy to pay the premium on a
new one.
INSURANCE - Dividend - CORRECT ANSWER- The amount of money an insurance
company may decide to distribute to policyholders.
INSURANCE - Insurable Interest - CORRECT ANSWER- A financial interest in the
property insured, prerequisite to a valid contract of insurance. In life insurance, a
person's or party's interest, financial or emotional, in the continuing life of the insured.
INSURANCE - Misrepresentation (Material) - CORRECT ANSWER- A significant
misstatement in an application form. If a company had access to the correct information
at the time of application, the company might not have agreed to accept the application.
INSURANCE - Rated Policy - CORRECT ANSWER- A policy issued at a higher
premium to cover a person classified as a greater-than-average risk, usually due to
impaired health or a dangerous occupation.
INSURANCE - Redlining - CORRECT ANSWER- Refusal by an insurance company to
underwrite or to continue to underwrite questionable risks in a given geographical area.
INSURANCE - Surplus Lines - CORRECT ANSWER- Insurance coverage not available
from an admitted company in the regular market; thus a surplus lines broker/agent
representing an applicant seeks coverage in the surplus lines market from a
nonadmitted insurer according to the insurance regulations of a particular state.
,INSURANCE - Underwriting - CORRECT ANSWER- An insurance company issues a
policy when it believes you have a certain level of "risk" or chance of a claim.
Underwriting is the process the company uses to decide whether to accept or reject an
application. Companies do not make their underwriting guidelines public because they
are considered to be trade secrets.
INSURANCE - Unearned Premium - CORRECT ANSWER- The insured's remaining
premium equity in his policy; that part of the policy premium that has not been "used
up."
INSURANCE - Annuity - CORRECT ANSWER- contract sold by insurance companies
that pays a monthly (or quarterly, semiannual, or annual) income benefit for the life of a
person (annuitant), for the lives of two or more persons, or for a specified period of time.
INSURANCE - Binder - CORRECT ANSWER- temporary insurance contract providing
coverage until a permanent policy is issued.
INSURANCE - Reinsurance - CORRECT ANSWER- form of insurance that insurance
companies buy for their own protection, "a sharing of insurance." An insurer (the
reinsured) reduces its possible maximum loss on either an individual risk or a large
number of risks by giving (ceding) a portion of liability to another insurance company
(reinsurer).
PROPERTY - Real Property - CORRECT ANSWER- immovable property
PROPERTY - Personal Property - CORRECT ANSWER- movable property, exluded
from sale
PROPERTY RIGHTS - Appurtenances - CORRECT ANSWER- rights, privileges,
improvements that will pass to the new owner upon conveyance of the land
PROPERTY - Improvements - CORRECT ANSWER- immovable object that has been
attached to the land and increases the value, such as fences and driveways
PROPERTY RIGHTS (Surface) - Riparian - CORRECT ANSWER- having to do with
water
PROPERTY RIGHTS (Surface) - Riparian (navigable waters) - CORRECT ANSWER-
identified waterway on a federal survey map, owned by the state, can be sold or leased,
leased term is 15 years
,PROPERTY RIGHTS (Surface) - Riparian (non-navigable) - CORRECT ANSWER-
water way that is not recorded; can be owned by the homeowner
PROPERTY RIGHTS (Surface) - Accretion - CORRECT ANSWER- gaining of
additional land through the gradual deposit of solid material
PROPERTY RIGHTS (Surface) - Accession - CORRECT ANSWER- whenever
additional land is acquired through natural causes or by joining or union with other
property
PROPERTY RIGHTS (Surface) - Avulsion - CORRECT ANSWER- land is taken away
due to natural causes, usually more sudden than accretion
SALE - Bill of Sale - CORRECT ANSWER- sale of personal property is noted with this
document
PROPERTY RIGHTS (Surface) - Emblement Rights - CORRECT ANSWER- tenant
may take the harvest of an annual crop even if the harvest occurred after the tenancy
had ended
PROPERTY - Trade Fixtures - CORRECT ANSWER- articles attached by the tenant to
the building for use in conducting a trade or business; considered personal property
OWNERSAHIP - Allodial System - CORRECT ANSWER- property ownership
recognized in the US; land is held free and clear of any rent or service owed to the
government
OWNERSHIP - Eminent Domain - CORRECT ANSWER- right of the government to
take privately owned land for public purpose, but must compensate
OWNERSHIP - Eminent Domain (condemnation) - CORRECT ANSWER- process by
which the government can take land by eminent domain
OWNERSHIP LIMITATIONS - Deed Restrictions - CORRECT ANSWER- private
limitation on the use of the land that restrict or specify; example cutting down trees or
building a fence
OWNERSHIP LIMITATIONS - Easements - CORRECT ANSWER- legal right that one
has to use the lands of another for a special and necessary purpose
, OWNERSHIP LIMITATION - Leases - CORRECT ANSWER- owner gives a tenant right
to use the property and the owner gives up his right of possession in the process
PROPERTY RIGHTS - Freehold Estates - CORRECT ANSWER- estates that last for an
indefinite period of time, at least as long as a lifetime
PROPERTY RIGHTS - Fee Simple - CORRECT ANSWER- estate in land that lasts
forever; highest degree of ownership recognized by law
PROPERTY RIGHTS - Life Estate - CORRECT ANSWER- estate in land that lasts a
lifetime
PROPERTY RIGHTS - Reversion - CORRECT ANSWER- possession of a property will
revert to the grantor upon the death of a life tenant
PROPERTY RIGHTS - Remainderman - CORRECT ANSWER- the one in whom an
estate vests after termination of a prior estate
PROPERTY RIGHTS - Tenancy for Years - CORRECT ANSWER- lease for a definite
period of time, even though it does not have to be a year; do not need to give advance
notice
PROPERTY RIGHTS - Periodic Tenancy - CORRECT ANSWER- lease for an indefinite
period of time, but you need to give advance notice
PROPERTY RIGHTS - Tenancy at Will - CORRECT ANSWER- lease that is not as
prevalent; no payment of rent
PROPERTY RIGHTS - Tenancy at Sufferance - CORRECT ANSWER- tenant comes
into possession lawfully yet unlawfully remains in possession
TRANSFER of PROPERTY - Holographic Will - CORRECT ANSWER- an unwitnessed
will that is the testator's handwriting and signed by him
TRANSFER of PROPERTY - Adverse Possession - CORRECT ANSWER- taking title to
real estate by possessing it for a certain period of time; 30 years for improved property
and 60 years for unimproved property; actual, open, hostile, exclusive, continuous,
uninterrupted, visible, and notorious
LOUISIANA TITLE INSURANCE EXAM
QUESTIONS AND ANSWERS
CONTRACTS - Aleatory Contract - CORRECT ANSWER- A contract in which the
performance of either party's obligation depends on an uncertain event
INSURANCE - Benchmark Rate(s) - CORRECT ANSWER- The rate set annually by the
Commissioner of Insurance by line, relative to which the flexibility bands and statutory
rate limitations apply.
INSURANCE - Churning - CORRECT ANSWER- Can occur when an agent persuades
a consumer to borrow against an existing life insurance policy to pay the premium on a
new one.
INSURANCE - Dividend - CORRECT ANSWER- The amount of money an insurance
company may decide to distribute to policyholders.
INSURANCE - Insurable Interest - CORRECT ANSWER- A financial interest in the
property insured, prerequisite to a valid contract of insurance. In life insurance, a
person's or party's interest, financial or emotional, in the continuing life of the insured.
INSURANCE - Misrepresentation (Material) - CORRECT ANSWER- A significant
misstatement in an application form. If a company had access to the correct information
at the time of application, the company might not have agreed to accept the application.
INSURANCE - Rated Policy - CORRECT ANSWER- A policy issued at a higher
premium to cover a person classified as a greater-than-average risk, usually due to
impaired health or a dangerous occupation.
INSURANCE - Redlining - CORRECT ANSWER- Refusal by an insurance company to
underwrite or to continue to underwrite questionable risks in a given geographical area.
INSURANCE - Surplus Lines - CORRECT ANSWER- Insurance coverage not available
from an admitted company in the regular market; thus a surplus lines broker/agent
representing an applicant seeks coverage in the surplus lines market from a
nonadmitted insurer according to the insurance regulations of a particular state.
,INSURANCE - Underwriting - CORRECT ANSWER- An insurance company issues a
policy when it believes you have a certain level of "risk" or chance of a claim.
Underwriting is the process the company uses to decide whether to accept or reject an
application. Companies do not make their underwriting guidelines public because they
are considered to be trade secrets.
INSURANCE - Unearned Premium - CORRECT ANSWER- The insured's remaining
premium equity in his policy; that part of the policy premium that has not been "used
up."
INSURANCE - Annuity - CORRECT ANSWER- contract sold by insurance companies
that pays a monthly (or quarterly, semiannual, or annual) income benefit for the life of a
person (annuitant), for the lives of two or more persons, or for a specified period of time.
INSURANCE - Binder - CORRECT ANSWER- temporary insurance contract providing
coverage until a permanent policy is issued.
INSURANCE - Reinsurance - CORRECT ANSWER- form of insurance that insurance
companies buy for their own protection, "a sharing of insurance." An insurer (the
reinsured) reduces its possible maximum loss on either an individual risk or a large
number of risks by giving (ceding) a portion of liability to another insurance company
(reinsurer).
PROPERTY - Real Property - CORRECT ANSWER- immovable property
PROPERTY - Personal Property - CORRECT ANSWER- movable property, exluded
from sale
PROPERTY RIGHTS - Appurtenances - CORRECT ANSWER- rights, privileges,
improvements that will pass to the new owner upon conveyance of the land
PROPERTY - Improvements - CORRECT ANSWER- immovable object that has been
attached to the land and increases the value, such as fences and driveways
PROPERTY RIGHTS (Surface) - Riparian - CORRECT ANSWER- having to do with
water
PROPERTY RIGHTS (Surface) - Riparian (navigable waters) - CORRECT ANSWER-
identified waterway on a federal survey map, owned by the state, can be sold or leased,
leased term is 15 years
,PROPERTY RIGHTS (Surface) - Riparian (non-navigable) - CORRECT ANSWER-
water way that is not recorded; can be owned by the homeowner
PROPERTY RIGHTS (Surface) - Accretion - CORRECT ANSWER- gaining of
additional land through the gradual deposit of solid material
PROPERTY RIGHTS (Surface) - Accession - CORRECT ANSWER- whenever
additional land is acquired through natural causes or by joining or union with other
property
PROPERTY RIGHTS (Surface) - Avulsion - CORRECT ANSWER- land is taken away
due to natural causes, usually more sudden than accretion
SALE - Bill of Sale - CORRECT ANSWER- sale of personal property is noted with this
document
PROPERTY RIGHTS (Surface) - Emblement Rights - CORRECT ANSWER- tenant
may take the harvest of an annual crop even if the harvest occurred after the tenancy
had ended
PROPERTY - Trade Fixtures - CORRECT ANSWER- articles attached by the tenant to
the building for use in conducting a trade or business; considered personal property
OWNERSAHIP - Allodial System - CORRECT ANSWER- property ownership
recognized in the US; land is held free and clear of any rent or service owed to the
government
OWNERSHIP - Eminent Domain - CORRECT ANSWER- right of the government to
take privately owned land for public purpose, but must compensate
OWNERSHIP - Eminent Domain (condemnation) - CORRECT ANSWER- process by
which the government can take land by eminent domain
OWNERSHIP LIMITATIONS - Deed Restrictions - CORRECT ANSWER- private
limitation on the use of the land that restrict or specify; example cutting down trees or
building a fence
OWNERSHIP LIMITATIONS - Easements - CORRECT ANSWER- legal right that one
has to use the lands of another for a special and necessary purpose
, OWNERSHIP LIMITATION - Leases - CORRECT ANSWER- owner gives a tenant right
to use the property and the owner gives up his right of possession in the process
PROPERTY RIGHTS - Freehold Estates - CORRECT ANSWER- estates that last for an
indefinite period of time, at least as long as a lifetime
PROPERTY RIGHTS - Fee Simple - CORRECT ANSWER- estate in land that lasts
forever; highest degree of ownership recognized by law
PROPERTY RIGHTS - Life Estate - CORRECT ANSWER- estate in land that lasts a
lifetime
PROPERTY RIGHTS - Reversion - CORRECT ANSWER- possession of a property will
revert to the grantor upon the death of a life tenant
PROPERTY RIGHTS - Remainderman - CORRECT ANSWER- the one in whom an
estate vests after termination of a prior estate
PROPERTY RIGHTS - Tenancy for Years - CORRECT ANSWER- lease for a definite
period of time, even though it does not have to be a year; do not need to give advance
notice
PROPERTY RIGHTS - Periodic Tenancy - CORRECT ANSWER- lease for an indefinite
period of time, but you need to give advance notice
PROPERTY RIGHTS - Tenancy at Will - CORRECT ANSWER- lease that is not as
prevalent; no payment of rent
PROPERTY RIGHTS - Tenancy at Sufferance - CORRECT ANSWER- tenant comes
into possession lawfully yet unlawfully remains in possession
TRANSFER of PROPERTY - Holographic Will - CORRECT ANSWER- an unwitnessed
will that is the testator's handwriting and signed by him
TRANSFER of PROPERTY - Adverse Possession - CORRECT ANSWER- taking title to
real estate by possessing it for a certain period of time; 30 years for improved property
and 60 years for unimproved property; actual, open, hostile, exclusive, continuous,
uninterrupted, visible, and notorious
