LOUISIANA PROPERTY AND CASUALTY
INSURANCE FINAL PAPER 2026 COMPLETE
QUESTIONS WITH SOLUTIONS
◉What documentation grants express authority to an agent?
A. Fiduciary contract
B. State provisions
C. Agent's contract with the principal
D. Agent's insurance license. Answer: C. Agent's contract with the
principal
The principal grants authority to an agent through the agent's
contract.
◉If a court ordered payment for a loss that was not covered in the
policy even if it was clearly worded, it would be an example of which
legal concept?
A. Indemnity
,B. Reasonable expectations
C. Cease and desist
D. Nonforfeiture. Answer: B. Reasonable expectations
If, because of advertising or sales literature or statements by an
agent, an insured could reasonably expect the coverage, the courts
have held that the insurer must provide that coverage.
◉Following a career change, an insured is no longer required to
perform many physical activities, so he has 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. Answer: A. Reduction
The insured's change in lifestyle and habits would likely reduce the
chances of health problems.
◉Which of the following does the term proximate cause refer to?
,A. Duty of the defendant to act
B. Reason for filing a lawsuit
C. Negligence that leads to an injury
D. Injury that leads to monetary compensation. Answer: C.
Negligence that leads to an injury
Proximate cause is the reasonably foreseeable act or event that
results in an injury or damage. Negligence may often be the
proximate cause of the damage; without it, the accident would not
have happened. This is also called direct liability.
◉The policy conditions define
A. The amount of coverage.
B. How parties to the contract must act following a loss.
C. The basic underwriting information.
D. The excluded perils.. Answer: B. How parties to the contract must
act following a loss.
Conditions is an essential part of a policy structure. Conditions
define what each party to the policy is required to do contractually
in the event of a loss.
, ◉All of the following are considered parts of the policy structure
EXCEPT
A. Conditions.
B. Provisions.
C. Exclusions.
D. Insuring clause.. Answer: B. Provisions.
Provisions is a broad term used to refer to the sections or clauses of
an insurance policy that communicate the policy's benefits,
conditions, etc. The essential parts of the policy are declarations,
insuring clause, conditions and exclusions.
◉What are the two types of compensatory damages?
A. Special and general
B. Pure and speculative
C. Tort and general
D. Normal and punitive. Answer: A. Special and general
Compensatory damages are intended to compensate someone for
both tangible and intangible elements of a loss. Special damages are
for the actual measurable losses, such as value of property or
INSURANCE FINAL PAPER 2026 COMPLETE
QUESTIONS WITH SOLUTIONS
◉What documentation grants express authority to an agent?
A. Fiduciary contract
B. State provisions
C. Agent's contract with the principal
D. Agent's insurance license. Answer: C. Agent's contract with the
principal
The principal grants authority to an agent through the agent's
contract.
◉If a court ordered payment for a loss that was not covered in the
policy even if it was clearly worded, it would be an example of which
legal concept?
A. Indemnity
,B. Reasonable expectations
C. Cease and desist
D. Nonforfeiture. Answer: B. Reasonable expectations
If, because of advertising or sales literature or statements by an
agent, an insured could reasonably expect the coverage, the courts
have held that the insurer must provide that coverage.
◉Following a career change, an insured is no longer required to
perform many physical activities, so he has 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. Answer: A. Reduction
The insured's change in lifestyle and habits would likely reduce the
chances of health problems.
◉Which of the following does the term proximate cause refer to?
,A. Duty of the defendant to act
B. Reason for filing a lawsuit
C. Negligence that leads to an injury
D. Injury that leads to monetary compensation. Answer: C.
Negligence that leads to an injury
Proximate cause is the reasonably foreseeable act or event that
results in an injury or damage. Negligence may often be the
proximate cause of the damage; without it, the accident would not
have happened. This is also called direct liability.
◉The policy conditions define
A. The amount of coverage.
B. How parties to the contract must act following a loss.
C. The basic underwriting information.
D. The excluded perils.. Answer: B. How parties to the contract must
act following a loss.
Conditions is an essential part of a policy structure. Conditions
define what each party to the policy is required to do contractually
in the event of a loss.
, ◉All of the following are considered parts of the policy structure
EXCEPT
A. Conditions.
B. Provisions.
C. Exclusions.
D. Insuring clause.. Answer: B. Provisions.
Provisions is a broad term used to refer to the sections or clauses of
an insurance policy that communicate the policy's benefits,
conditions, etc. The essential parts of the policy are declarations,
insuring clause, conditions and exclusions.
◉What are the two types of compensatory damages?
A. Special and general
B. Pure and speculative
C. Tort and general
D. Normal and punitive. Answer: A. Special and general
Compensatory damages are intended to compensate someone for
both tangible and intangible elements of a loss. Special damages are
for the actual measurable losses, such as value of property or
