Free LA Property & Casualty Exam Flashcards

The primary state insurance regulator for Louisiana. Licenses producers, oversees insurer solvency and market conduct, and enforces Louisiana insurance laws. Administered by a Commissioner of Insurance who is elected statewide.

The combined Property & Casualty producer licensing exam for Louisiana. Administered by PSI Services LLC. Contains 150 scored questions with a 160-minute time limit. Passing score is 70%. Exam fee is $58.

The primary statutory title codifying Louisiana insurance law. Covers producer licensing, insurer regulation, guaranty associations, and policy requirements. Key citation anchor for Louisiana-specific exam questions.

The Louisiana Commissioner of Insurance is elected statewide by voters, not appointed by the governor or legislature. This differs from states where the commissioner is appointed. The commissioner heads LDI.

24 hours every two-year cycle, including at least 3 hours of ethics and 3 hours of flood training. Missing a required subcomponent makes the producer noncompliant even if the total hour count is met. Renewal is tied to the producer's birth month.

None. Louisiana eliminated the mandatory 40-hour pre-licensing course requirement effective June 3, 2022. Candidates may schedule Series 106 directly without completing a pre-license course, though prep is strongly recommended.

Louisiana follows reciprocity. A nonresident must hold active home-state authority and apply for Louisiana nonresident authority, typically through NIPR. Louisiana pre-licensing education is not required for nonresidents.

LDI may suspend or revoke a producer license through administrative process, with notice and hearing, when a producer violates Louisiana insurance law. Transacting insurance with a lapsed license is unlicensed activity and can trigger enforcement action.

A peril is the cause of loss (fire, wind, theft). A hazard is a condition that increases the likelihood or severity of a peril. Hazards can be physical (faulty wiring), moral (dishonesty), or morale (carelessness).

A financial stake in the insured property or person such that a loss would cause economic harm. Required at policy inception for property insurance and at time of loss for life insurance. Without insurable interest, a contract is not valid insurance.

Replacement cost pays to repair or replace with like kind and quality without deducting for depreciation. ACV reflects depreciation, producing a lower claim payment for older property. RC generally costs more in premium.

Open-peril forms cover all direct physical loss causes except listed exclusions. Named-peril forms cover only causes specifically listed in the policy. Open-peril is broader; named-peril requires the insured to prove the cause is listed.

The deductible is the insured's retained portion of a covered loss. It is subtracted from the covered loss amount before the insurer pays up to policy limits. Higher deductibles lower premium but increase out-of-pocket exposure at claim time.

The named insured is the party specifically identified on the declarations page with full policy rights. An additional insured is added by endorsement and receives coverage extensions, often with narrower scope and only for scheduled operations or locations.

Covers the dwelling structure itself, the residence building. This is the primary building coverage on a homeowners policy. The limit should reflect replacement cost of the structure, not market value or tax assessment.

Covers other structures separated from the dwelling by clear space, such as detached garages, sheds, and fences. Typically limited to 10% of Coverage A unless increased by endorsement.

Covers personal property (contents) of the insured anywhere in the world, subject to policy limits and special sublimits for classes like jewelry, firearms, and cash. Off-premises coverage is often limited to a percentage of the Coverage C limit.

Covers loss of use, including additional living expenses when a covered loss makes the residence uninhabitable. Can also cover fair rental value for rented portions. Triggered only by a covered cause of loss.

A basic named-peril dwelling form covering only specifically listed causes of loss. Typically used for non-owner-occupied rental properties. Broader protection is available through DP-2 (broad named-peril) and DP-3 (open-peril on the dwelling).

Generally provides the broadest dwelling coverage among standard dwelling forms, covering the dwelling on an open-peril basis. Used primarily for tenant-occupied or non-owner-occupied residential properties where a homeowners form does not fit.

Scheduling lists specific high-value items (jewelry, fine arts, antiques) for higher limits and broader coverage than standard Contents sublimits provide. Often removes or reduces the deductible for scheduled items and can cover mysterious disappearance.

Requires the insured to carry insurance close to the property value (commonly 80%, 90%, or 100%). If underinsured at time of loss, the claim payment is reduced by a coinsurance penalty formula. Purpose is to encourage adequate insurance-to-value.

Requires a covered direct physical loss at the insured premises that causes a suspension of operations. Pure economic downturn or market competition alone does not trigger coverage. The causal link between physical damage and income loss is essential.

Covers increased rebuilding costs caused by current building code requirements during reconstruction after a covered loss. Includes demolition, increased cost of construction, and code-upgrade expenses that base forms typically exclude or limit. Especially relevant for older coastal structures.

Insures buildings and structures during construction. Covers materials, fixtures, and equipment at the construction site. Differs from completed-structure property forms. Essential because construction-stage losses (fire, theft, wind) are common and severe.

When a building is unoccupied beyond a policy threshold (often 60 days), coverage can be limited or reduced for certain perils like vandalism, sprinkler leakage, or glass breakage. Vacancy increases loss frequency and severity, making it a key underwriting and claims issue.

Special form (broad form) starts with broad direct physical loss coverage and then lists exclusions. Basic form covers only specifically named causes. Special is broader and generally costs more. Understanding this structural difference is essential for commercial property placement.

$15,000 bodily injury per person, $30,000 bodily injury per accident (all injured persons combined), and $25,000 property damage per accident. These are Louisiana's compulsory motor vehicle financial responsibility minimums. All registered vehicles must carry at least these limits.

First number = bodily injury limit per person. Second number = bodily injury limit per accident (total for all injured). Third number = property damage limit per accident. In 15/30/25, the middle $30,000 caps total BI payout regardless of how many are injured.

Louisiana is a direct-action tort state, not a no-fault state. The at-fault driver's liability insurer pays for damages. There is no PIP coverage requirement unlike true no-fault states. Injured parties can sue the at-fault driver and, in qualifying cases, the insurer directly.

Optional auto coverage that pays reasonable medical expenses for the insured and passengers injured in a covered auto accident, regardless of fault. Pays quickly on a no-fault basis for the insured's own vehicle occupants. Distinct from liability coverage which pays third parties.

Pays the insured when injured by a driver with no liability coverage or insufficient limits. In Louisiana, producers must offer UM coverage in writing and the insured must formally reject or select lower limits in writing. Critical protection given the uninsured driver population.

With 15/30/25 limits and two injured parties claiming $20,000 and $18,000: BI per person caps at $15,000 each ($30,000 total), BI per accident caps at $30,000, and property damage caps at $25,000. If PD loss is $40,000, the insurer pays $25,000. Total policy payout = $30,000 BI + $25,000 PD = $55,000.

The core insuring agreement of a Commercial General Liability policy. Covers bodily injury and property damage liability arising from the insured's operations, premises, products, and completed work. Subject to exclusions and the policy's aggregate and per-occurrence limits.

Covers personal injury (false arrest, detention, malicious prosecution, humiliation) and advertising injury (libel, slander, copyright infringement in ads) arising from the insured's business activities. Distinct from bodily injury coverage under Coverage A.

Pays reasonable medical expenses for minor injuries sustained by non-employees on the insured's premises or due to operations, regardless of fault. Designed to prevent small claims from becoming lawsuits. No deductible typically applies and payment does not require legal liability.

Symbol 1 means 'any auto' and is the broadest liability trigger on a business auto policy. It covers owned, hired, and non-owned autos. Narrower symbols include Symbol 2 (owned autos only) and Symbol 7 (specifically described autos only). Symbol selection should match real fleet operations.

Commercial auto covers business use of vehicles (owned fleets, hired autos, non-owned use by employees). Personal auto policies typically exclude business use beyond incidental commuting. Correct form selection depends on vehicle ownership, use pattern, and business entity type.

Workers compensation is generally the exclusive remedy of an injured employee against the employer for covered workplace injury. The employee gives up the right to sue the employer in tort in exchange for statutory benefits regardless of fault. Limited exceptions exist (intentional acts, statutory violations).

Provides medical treatment, disability income (temporary total, permanent total, permanent partial), rehabilitation, and death benefits to dependents. Employers purchase coverage or self-insure with state approval. Benefits are statutory and not based on negligence.

A surety bond involves three parties: the principal (obligated party who must perform), the obligee (beneficiary protected by the bond), and the surety (insurer guaranteeing performance). If the principal defaults, the surety pays the obligee and then seeks reimbursement from the principal.

A fidelity bond covers an employer for employee dishonesty, theft, or embezzlement. A surety bond guarantees performance of a contractual obligation to a third party. Fidelity is first-party protection; surety is three-party guarantee.

Allows an injured party, in specified circumstances, to bring a lawsuit directly against the liability insurer rather than only against the insured. Listed bases include when the insured is deceased. The insurer's defenses remain limited by policy terms. Distinctive Louisiana liability rule compared to most states.

Limits recovery by uninsured owners or operators involved in auto accidents. An uninsured driver cannot recover the first $100,000 of bodily injury damages and the first $100,000 of property damage. Exceptions apply when the at-fault driver is convicted of DWI or pleads nolo contendere.

For a covered total loss to insured property from a covered peril, the insurer generally owes the policy amount applicable to that building interest rather than a depreciated estimate. Does not create coverage for excluded perils (flood remains excluded). Reduces post-loss valuation disputes on qualifying total losses.

The insurer of last resort for property risks that cannot obtain coverage in the voluntary admitted market. Designed for availability, not guaranteed lowest price. Eligibility requires good-faith denial from admitted carriers. Flood is generally not covered and must be insured separately.

Pays covered claims, up to statutory limits, when a member admitted insurer becomes insolvent. Protects policyholders of failed admitted carriers. Does NOT cover claims under surplus lines policies from nonadmitted insurers. Producers must not promise unlimited guaranty fund protection.

Surplus lines coverage is used when admitted insurers will not reasonably accept the risk. Nonadmitted insurer policies are NOT covered by LIGA. Producers must clearly disclose nonadmitted status and different guaranty-fund treatment before binding. Diligent search of the admitted market is typically required first.

Premium money collected from insureds must be handled in a fiduciary capacity, kept separate from personal or operating funds, and remitted promptly to the insurer per contractual and legal rules. Commingling or misusing premium funds is a serious producer-conduct violation that can trigger license suspension or revocation.

Misrepresenting policy benefits, terms, or exclusions to induce a sale is a prohibited unfair trade practice under Louisiana law. Producers must present coverage terms accurately so clients can make informed decisions. Recommending a policy primarily for higher commission despite weaker client fit is also an ethical conflict and unfair practice.