Property and Casualty Exam Louisiana ACCURATE QUESTIONS AND DETAILED ANSWERS | GUARANTEED PASS | GRADED A | LATEST UPDATE

Which statements concerning the personal auto policy's other-than-collision coverage is true? A) It covers only named perils B) It only applies to leased vehicles C) It requires a separate endorsement D) It is an open peril coverage Rationale: Other-than-collision coverage under a personal auto policy is considered open peril, meaning it covers all losses not specifically excluded. Which term means legal obligation for injury caused by the failure to perform a duty? A) Subrogation B) Assignment C) Liability D) Arbitration Rationale: Liability refers to legal responsibility for harm caused by negligence or failure to meet a legal duty. In comparing a commercial policy Broad Form cause of loss to a Special Form, which statement is true? A) Broad Form has fewer exclusions B) The Special Form has more listed exclusions C) Broad Form provides more comprehensive coverage D) There is no difference in exclusions Rationale: The Special Form is more inclusive but specifically lists more exclusions due to its broader coverage base. Randy and his daughter are hit by a negligent driver. Will Randy's personal auto policy pay medical payments coverage? A) No, the driver must be sued B) Yes C) Only if Randy was driving D) Only for his daughter Rationale: Medical Payments coverage under a personal auto policy covers occupants and pedestrians injured by an auto, regardless of fault. John’s $200,000 home with a 10-year-old roof was fully replaced after hail damage, only paying the deductible. What must be true? A) He had only actual cash value coverage B) John has at least $160,000 in dwelling coverage C) The roof was under warranty D) The storm was not covered Rationale: To receive full replacement cost coverage, most homeowner policies require the insured to carry at least 80% of the home’s replacement cost, which is $160,000 in this case. The limits of liability are found in which part of the casualty policy? A) Conditions B) Insuring agreement C) Declarations D) Definitions Rationale: The declarations section specifies key policy details including limits of liability. Which activity would not be covered under a boat owners policy? A) Towing a water skier B) Officially racing the boat C) Boating after dark D) Saltwater fishing Rationale: Competitive racing is typically excluded under standard boatowners policies. Under a commercial auto policy, liability coverage includes: A) Theft B) Supplementary payments C) Physical damage only D) Personal property Rationale: Liability coverage includes supplementary payments like legal defense and court costs. Which personal auto policy coverage pays for injury by an uninsured driver? A) Part A – Liability B) Part B – Medical Payments C) Part C – Uninsured/Underinsured Motorist D) Part D – Damage to Your Auto Rationale: Part C specifically covers bodily injury from uninsured or underinsured motorists. Theft of construction materials is excluded under an HO-3 homeowners policy until: A) They are stored inside B) A building permit is issued C) The dwelling is finished and occupied D) Security measures are in place Rationale: Theft of construction materials is excluded until the dwelling is both completed and occupied. Under a commercial auto policy, in a total loss, which is considered in value determination? A) Replacement cost only B) Loan balance C) Actual cash value D) Market value Rationale: Actual cash value is calculated by considering depreciation and physical condition of the vehicle. Which statement about commercial property policy coverage is true? A) It is the same for all policies B) Only listed perils are covered C) The location and selected perils determine coverage D) Coverage applies globally Rationale: Coverage depends on the insured property’s location and the perils chosen in the policy. The Business Owners Policy cannot be sold to a: A) Bakery B) Dry cleaning store C) Movie theater D) Barber shop Rationale: Certain high-risk businesses like theaters are excluded from BOP eligibility. Jackie’s boat injures a swimmer. Her homeowners policy: A) Will never pay boat-related injuries B) Will only pay for motorboats C) Will pay if the sailboat is under 26 feet D) Requires a marine rider Rationale: HO policies typically cover small watercraft like sailboats under 26 feet in length. To be eligible for Workers’ Compensation benefits, an employee must: A) Be salaried B) Be injured in a work-related incident C) Prove employer negligence D) Work full-time Rationale: Workers’ Compensation covers employees injured in the course of employment, regardless of fault. Which vehicle is covered under Symbol 7 in commercial auto policies? A) All autos B) Specifically described autos C) Hired autos D) Non-owned autos Rationale: Symbol 7 applies to autos specifically listed in the policy declarations. Which is NOT necessary to establish negligence? A) Duty B) Breach of duty C) Proximate cause D) Admission of guilt Rationale: Guilt admission isn’t required to prove negligence; legal criteria include duty, breach, causation, and damages. What triggers coverage under a Business Income form with extra expense? A) Theft loss B) Carpet cleaning after water main break C) Routine maintenance D) Fireproofing costs Rationale: The policy is triggered by physical loss or damage that necessitates income interruption and extra expense.