Florida Licensing
An insured has A SPLIT limit liability policy with 10/20/10 limits. He owes the following people liability bodily injuries claims of: Passenger 1 = $12,000, Passenger 2 = $10,000, Passenger 3 = $18,000. How much liability insurance will his policy pay for these claims?
$20,000
An insured has a home with a replacement cost / value of $100,000, on which he carries an insurance policy for $80,000 with an 80% Coinsurance clause. The insured has a $20,000 partial loss, the insurance company will pay how much for this partial loss of $20,000? (Remember $80,000 is 80% of $100,000)
$20,000
Under the commercial property form, what length of time must expire before a building is considered "vacant", thus suspending some coverages, while reducing payment on others?
60 days
Both commercial property and liability were combined into one policy, thus saving money on underwriting expense. What is this combination called?
A Package Policy
All of the following are eligible for a Homeowners Policy EXCEPT: • A person who rents an apartment • A condominium owner • Owner-occupant of a four-family dwelling • A beach house owned by ACME Corporation
A beach house owned by ACME Corporation
To turn partially damaged property over to the insurance company and ask them to pay for a total loss is called
Abandonment
An insurance contract which may contain a "gray area" or an ambiguity that is generally resolved in favor of the insured because insurance is a contract of:
Adhesion
Aunt Mary lives with the insured Homeowner. A thief steals her hearing aid. The HO-3 will:
Cover within the limits of the H/O policy
Which of the following is NOT one of the rating factors used in determining a H/O (Homeowners) premium?
Gender of owner
Which of the following is eligible for a Homeowners Policy? I. Susie, who has purchased a condo unit for her residence II. John, who buys a duplex and lives in one side III. Sam, who rents an apartment for his residence
I, II and III
A ship loaded with lumber encountered a terrible storm, and some of the lumber was thrown overboard to save the ship - this action is called:
Jettison
Jack and Connie agree to have Jack burn down Connie's house for $10,000. What element of a valid contract is missing?
Legal Purpose
Jane has a dwelling policy with the house insured for $40,000. If her detached shed, which is valued at $4500, is destroyed by a covered peril, what can she expect?
She can expect $4,000 to be paid, because unattached structures are covered up to 10% of the dwelling amount
Which of the following is NOT covered under the HO-Coverage C, Personal Property? • An insured's suitcase and clothing, valued at $1.500 stolen from his motel room while at a convention • A fire breaks out in the residence and an overnight guest loses hi clothes in the fire • The insured's daughter's golf clubs are stolen from her locker at school • The dead fish when the insured accidentally overturns his tropical fish tank and all the fish die from lack of oxygen
The dead fish when the insured accidentally overturns his tropical fish tank and all the fish die from lack of oxygen
When is the named insured NOT entitled to PIP benefits? • Injured in Florida while a pedestrian struck by a defined motor vehicle • Injured outside of Florida in their own insured Florida vehicle • Injured outside of Florida while a pedestrian struck by a defined motor vehicle • Injured in Florida in a borrowed defined motor vehicle
• Injured outside of Florida while a pedestrian struck by a defined motor vehicle
Lender's interests in REAL property are protected with a Mortgage clause, how are lender's interests protected in personal property - such as automobiles? • Waiver clause • Mortgage clause • Loss payable clause • Assignment clause
• Loss payable clause
Under CGL Claims-made form, the Supplemental extended reporting period: • is a 90 day period following policy expiration • May extend the reporting period from one year to an indefinite time • must be selected before expiration of policy • none of the above
• May extend the reporting period from one year to an indefinite time
Which of the following is true concerning the extended PIP endorsement? • Medical expense reimbursement is raised from 60% to 100% • Medical expense reimbursement is raised from 60% to 80% • Medical expense reimbursement is raised from 60% to 70% • Medical expense reimbursement is raised from 80% to 100%
• Medical expense reimbursement is raised from 80% to 100%
Insurance is considered a two-party contract, Surety Bonds are considered • not a contract • also a two-party contract • a three-party contract • final payments
• a three-party contract
Commercial leases have special coverages in the Leasehold Coverage Form due to the fact that • they are exactly like residential leases • they are long-term often with investment in the real estate • businesses do not enter into leases • None of the above
• they are long-term often with investment in the real estate
Under CGL, the Occurrence form - bodily injury or property damage must occur during the policy period - reporting of the claim may be: • within policy period or thereafter with no limit on time • made only within the policy period • made within policy period or a 60-day period following policy expiration • none of the above
• within policy period or thereafter with no limit on time
Under both the Dwelling and Homeowners, Coverage B - unattached structures - usually is:
10% of Coverage A - Structure
All of the following may qualify for a dwelling policy EXCEPT: • A 6 - family dwelling • A beach house owned by ACME Corporation • A small single family home, rented by a salesman • An old frame home, built upon piers, valued at $10,000 and occupied by the owner, Mrs. Jones. Company underwriting minimum for a homeowner policy is $50,000
A 6 - family dwelling
There are advantages of an agent recommending a commercial package policy over several monoline policies. Which of the following is an advantage? • The package policy is easier to rate and sell - more efficient • In the package policy, coverage gaps are less likely to occur • Premium savings may result from a package policy • All of the above
All of the above
Which of the following is TRUE concerning Subrogation?
Allows insurer to sue a negligent third party to recover a loss paid to an insured
A shipper contemplates 10 or 11 loads of produce to be shipped to Pennsylvania over the course of the next 12 months. What inland marine coverage best fits this exposure?
An annual transit policy
"Actual Cash Value" ACV means:
Current cost to replace minus depreciation
Which of the following forms is "all risks" on the dwelling policy?
DP-3 , or the special form
Homeowners Policies usually insure property for which of the following? • Rising water - Flood, back up of sewer or drain • Inherent vice, underground seepage, governmental action • Freezing, wear & tear, marring, deterioration • Fire, lightning, theft
Fire, lightning, theft
The coverage for damage to an aircraft under the care, custody, or control of the insured while the plane is in for storage or service is:
Hangarkeepers liability
XYZ Insurance Corp. filed its corporate charter in Tallahassee and has its home office in Tampa:
In Florida, XYZ is a domestic insurer
The goal of insurance is to restore the insured to the same economic position as before the covered loss, this is the principle of
Indemnity
Which of the following would be excluded (NOT covered) under a personal articles floater on an "all risks" basis? • Insects destroy a valuable postage stamp worth $500 • A personal art collection on display at a museum show is stolen • A sophisticated telescope is damaged in a fire • All of the above
Insects destroy a valuable postage stamp worth $500
Strict or absolute liability
Is assigned by law or statute
Insurance that covers the responsibility for loss arising out of negligence that results in payment to a party other than the insured is:
Liability Insurance
If a lender has an insurable interest in an auto, because of the money loaned to finance the purchase, the lender would appear on the policy as the: • Lessee • Loss Payee • Mortgagor • Mortgagee
Loss Payee
The principle of "insurable interest" is important in the dwelling policy as well as other kinds of insurance. Which of the following does not have "insurable interest" in the described property? • The one who holds title to the property • One who inherits title to property under the terms of a will • One who attends a Mary Kay party at a friend's property • A bank who holds a mortgage on a described property
One who attends a Mary Kay party at a friend's property
All of the following are ways that liability limits can be expressed except: • PIP Limit • Aggregate Limit • Split Limit • Single Limit
PIP Limit
If an insured sells his car to another person, the buyer may be prohibited from also receiving the insured's policy. This is because the insurance contract is a contract of:
Personal nature
Risks that are insurable are
Pure risks
Condominiums may be covered by both an Association (Commercial Condo) Policy and a Unit Owner's (Homeowners) Policy, which of the following is true? • The Unit Owners' Policy is primary and the Association Policy is excess • The Association Policy is primary and the Unit Owners' Policy is excess • There never would be both an Association Policy and a Unit Owner's Policy on the same property at the same time • None of the above statements are true
The Association Policy is primary and the Unit Owners' Policy is excess
An Umbrella Policy may be broader than the underlying policies and respond as primary coverage. When the Umbrella is PRIMARY, there is an amount to be paid by the insured before the Umbrella will pay. What is this amount called?
The self-insured retention
Firemen caused water damage to a property by spraying water to put out a fire. If the property insurance policy listed fire as the only named peril:
The water damage is covered due to the concept of proximate cause
All of the following are EXCLUSIONS under a personal articles floater (Personal Inland Marine Policy) EXCEPT: • Theft • Deterioration of insured article • Inherent vice - destruction contained within the object • Losses caused by vermin or insects
Theft
A community applied to be part of the National Flood Insurance Program. Until they are approved, what is the status of the community?
They are in the emergency program
Which of the following is false concerning flood insurance? • A community applies for flood coverage and during this time, it is in the "emergency program" • To be insured for flood, a new building only must have the walls up • Two acres must be inundated with water - flooded • Loss to a detached garage would be settled on an actual cash value basis
To be insured for flood, a new building only must have the walls up
If an insured has $100,000 of "unstacked" UM, and 2 cars on the policy, how much is available under a UM claim? • 0 • $100,000 • $200,000 • $300,000
• $100,000
Jack is involved in an accident - he is driving his car when hit by an at-fault driver, Sam. (Florida residents). Jack has two more cars at home. Both Jack and Sam have Basic PIP with no deductible, Med Pay coverage of $5,000, Liability of 50/100/50, and Stacked Uninsured Motorist of $50,000 on each car that they own. Jack has a medical claim of $215,000. How much will Jack's Uninsured Motorist pay for this claim? • 0 • $50,000 • $100,000 • $150,000
• $150,000
Your insured has purchased the minimum split limit policy that meets Financial Responsibility Law in Florida. He causes the following bodily injuries to passengers in his car: Carl $12,000 Jeanne $10,000 Charlie $10,000 How much will his policy pay? • Nothing • $10,000 each to all that were injured • $20,000 for the total BI portion of accident • $32,000 total for all injuries from Part A Liability
• $20,000 for the total BI portion of accident
If Jack has an accident that is his fault, Jack has liability insurance with 10/20/10 limits, Extended PIP with no deductible, & Med Pay of $2,000 ... what is the maximum potential payment from Jack's Personal Auto Policy to a guest passenger, who suffers injury and does not own an auto, has no auto insurance and has $42,000 in medical expenses? • $10,000 (80% PIP + $2,000 Med Pay) • $32,000 ($10,000 PIP; $2,000 Med Pay; $20,000 BI) • NONE - Needs to have Health Insurance • $22,000 (PIP $10,000; Med Pay $2,000; BI $10,000)
• $22,000 (PIP $10,000; Med Pay $2,000; BI $10,000)
If an insured is injured by an at-fault driver, and has injuries of $5,000, what amount will PIP pay if he has Florida No-Fault Basic PIP with a $1,000 deductible? • $3,000 • $3,200 • $4,000 • $5,000
• $3,200
Which of the following is the lowest single limit automobile liability that meets the requirements of the Florida Financial Responsibility Law? • $10,000 • $20,000 • $30,000 • $40,000
• $30,000
An insured has 25/50/25 limits and injured another person. The injured person won a tort claim for $30,000 against the insured and the insured's attorney charged $7,500 to defend the insured. How much is paid by the insured's insurance company? • 0, since the insured was at-fault • $50,000, the policy limit • $37,500, the actual damages and the attorney's fees for defense • $32,500, the policy limit and the attorney's fees for defense
• $32,500, the policy limit and the attorney's fees for defense
An insured has $100 deductible Other Than Collision, and $250 deductible Collision. If a rock breaks his windshield and repairs total $675, how much will be paid? • Payment only will be made if he is not at-fault • $425, under Collision with a $250 deductible • $575. under Other Than Collision, with a $100 deductible • $675, under Other Than Collision, with no deductible
• $675, under Other Than Collision, with no deductible
An insured has Basic PIP with no deductible, in an accident he incurs medical bills of $8,000, $1,000 in lost wages, and $500 in replacement services - how much will PIP portion of policy pay? • $7,500 • $9,500 • $6,400 • $8,000
• $7,500
An insured buys an ISO Mechanical Breakdown Coverage Policy on his used car. For what length of time and mileage will he have coverage? • 12 Months / 12,000 Miles • 24 Months / 24,000 Miles • 36 Months / 36,000 Miles • Not available for used cars
• 12 Months / 12,000 Miles
Which of the following is a "defined motor vehicle" under Florida No-Fault law? • Golf cart • Public transit bus • 9,500 pound SUV • Motorcycle
• 9,500 pound SUV
A health insurance policy was issued containing the provision that the insurance company must renew the policy to a particular age, but could adjust premiums. What is this policy called? • A non-cancelable policy • A major medical policy • A hospitalization policy • A guaranteed renewable policy
• A guaranteed renewable policy
Which of the following could NOT be considered an "owner" of a motor vehicle? • A debtor in possession • A long term lease of 3 months • The title holder of the auto • One who lease-purchases with a time frame of 6 or more months
• A long term lease of 3 months
A health insurance policy was issued containing the provision that the insurance company must renew the policy to a particular age and could not adjust the premiums. What is this policy called? • A non-cancelable policy • A major medical policy • An optionally renewable policy • A guaranteed renewable policy
• A non-cancelable policy
Under a CGL Occurrence liability form, which policy would cover an accident that occurred June 1, 1998, and was discovered and reported July 15, 2008: • A policy dated 1/1/98 to 12/31/98 • A policy dated 1/1/99 to 12/31/99 • A policy dated 1/1/08 to 12/31/08 • No policy would cover a claim filed in 2000 for an accident in 1998
• A policy dated 1/1/98 to 12/31/98
A claimant ate some undercooked fish and got violently ill at the restaurant. Which of the following would pay for this occurrence? • A products and completed operations form • A premises and operations form • An owner's and contractor's protective liability form • A liquor liability form
• A premises and operations form
What is the limit on medical benefits under Workers Compensation? • 66 2/3 % of medical costs • All medical costs with no limit • All medical costs up to the $150,000 death benefit • All medical costs up to the 100/100/500 employer liability limit
• All medical costs with no limit
The Surety attempts to avoid default by investigating the principal with regard to: • Character • Capability • Collateral • All of the above
• All of the above
Which of the following could be covered by crime insurance? • A burglar breaks into a locked safe and steals a ruby necklace • An employee is robbed while taking the daily cash receipts to the bank • A computer hacker breaks into a business computer and transfers a deposit to an account in the Cayman Islands • All of the above
• All of the above
Which of the following are covered exposures for bodily injury and property damage under the CGL (Commercial General Liability) Policy: • Products and completed operations • Contractual Liability • Contingent Liability • All of the above are available in the CGL policy
• All of the above are available in the CGL policy
Who is covered for their exposure under the CGL - Commercial General Liability Policy? • Employees of the business • Volunteers, legal representative, trustee • Real estate manager • All of the above are covered
• All of the above are covered
The "trigger" of the financial responsibility law is: • Carrying a gun in a personal auto • Buying a second personal auto • An accident involving bodily injury or property damage rendering the vehicle inoperable or a serious violation such as DUI. • All of the above
• An accident involving bodily injury or property damage rendering the vehicle inoperable or a serious violation such as DUI.
Which of the following is true concerning the definition of "accident" under the CGL (Commercial General Liability)? • An accident may include continuous and repeated exposure to the same condition • The accident must occur within the state where the insurance policy is written • An accident must be a one-time occurrence, defined by time • None of the above are true
• An accident may include continuous and repeated exposure to the same condition
The Surety bond that guarantees that companies will not misrepresent securities is • Lost Instrument bond • SEC Bond • IPO Bond • Blue Sky Bond
• Blue Sky Bond
A loss discovered during the policy period that occurred before the inception of the current policy may be covered by? • Discovery Form • Loss Sustained Form • Outside Premises or Events Insuring Agreement • Coverage like this is not available
• Discovery Form
A health policy often has a provision which states a period of time between issuance and acceptance before sickness benefits begin. This eliminates people only buying health insurance when they find out that they are ill. This is called a/an: • Grace period • Pre-exisiting period • Elimination period • None of the above
• Elimination period
If an insured's administrative assistant fraudulently forged the insured's name on a check, and cashed it, which of the following would cover this event? • Employee theft • Forgery or alteration • Robbery • Premises Burglary
• Employee theft
Insurance agents and adjusters may have their professional activities covered under a type of liability insurance called: • Owners Protective Liability • Employment Related Practices Liability • Malpractice Liability • Errors and Omissions Liability
• Errors and Omissions Liability
When an Additional PIP Endorsement is added to the Personal Auto Policy, we know that the policy already has • UM coverage • Named Non-owned Endorsement • Extended PIP Endorsement • None of the above apply
• Extended PIP Endorsement
A home oxygen service must continue to supply its customers even if the facility is destroyed by a fire. Consequently, the service may make purchases from one of its competitors to keep their own customers supplied with medically necessary equipment in order to have the opportunity to stay in business. Where is this type of insurance coverage found ? • Building and Personal Property Coverage form • Extra Expense Coverage form • Leasehold Interest Coverage form • Legal Liability Coverage form
• Extra Expense Coverage form
A Surety Bond that guarantees the performance of a person appointed by a court, or named in a will or trust to take possession of property, collect assets, make investments, pay debts, sell assets, carry on a business, distribute property to heirs, or any related tasks is what type ? • Fiduciary Bond • Federal Guarantee Bond • Performance Bond • Blue Sky Bond
• Fiduciary Bond
What type of health insurance plan usually offers the broadest coverage at the lowest cost with the most freedom of choice? • Group insurance PPO • Group insurance HMO • Private insurance policy • Private insurance HMO
• Group insurance PPO
Nonresidents must comply with the Florida No Fault law: • They do not ever come under this law • If they are driving in Florida • If their auto is in Florida 30 consecutive days • If their auto is in Florida over 90 of the last 365 days
• If their auto is in Florida over 90 of the last 365 days
An Insurance Policy is a contract with all the following characteristics, EXCEPT: • It is a personal contract • parties are of unequal power with ambiguities or unclear working resolved in favor of the insured because it is a contract of adhesion • Indemnity is not part of an insurance contract • There are conditions imposed on both the insurer and insured
• Indemnity is not part of an insurance contract
Which of the following statements is false concerning No-Fault Auto Insurance? • There is not complete immunity under Florida's No Fault law • covers insured's resident relatives • Negligence must be established • It covers loss of income due to injuries from an auto accident
• Negligence must be established
Two of Any Corp. employees were working and one was accidentally pushed into a machine that cut his arm. How would Any Corp's general liability respond? • The liability section of the CGL would not pay, unless the medical payment section paid first • The medical payment section would pay up to $5,000 • The CGL would not pay, since only property damage is covered under CGL • Neither CGL nor the med pay section would respond, and coverage for this accident is found under Workers Compensation
• Neither CGL nor the med pay section would respond, and coverage for this accident is found under Workers Compensation
While driving on the Pennsylvania Turnpike, William's auto has a collision with a deer that jumps in front of his car. In order for coverage to be afforded, William's Personal Auto Policy must have: • Extended Non-Owned coverage • Uninsured Motorists • Collision coverage • Other than Collision coverage
• Other than Collision coverage
An insured had an accident in another state that required liability limits of 25/50/25. Our insured had 10/20/10 limits. What happens if the liability he incurs exceeds 10/20/10? • Our insured's license will be revoked since he did not comply with the other state's requirements • Our insured's policy will respond to the higher limit of the other state • Our insured's policy will pay up to its 10/20/10 limits and the insured will be responsible for any balance • None of the above
• Our insured's policy will respond to the higher limit of the other state
When searching for insurance solutions to pay for personal injuries from an auto accident, the order of payment in Florida in most cases would be: • PIP, Uninsured Motorist, Med Pay, Liability • Med Pay, Uninsured Motorist, PIP, Liability • PIP, Med Pay, Liability, Uninsured Motorist • Liability, PIP, Med Pay, Uninsured Motorist
• PIP, Med Pay, Liability, Uninsured Motorist
All of the following are true for Medicare Supplement Insurance EXCEPT: • Offered to people over 65 and certain disability receivers • Covers some expenses not paid by Medicare • Policy must contain a 180 day "free look" • Pre-existing conditions may not be excluded for more than 180 days
• Policy must contain a 180 day "free look"
The following are employees who must have workers compensation EXCEPT: • Government employees • Pro athletes • Construction industry workers in companies with 1 employee • Private employers with 4 or more employees
• Pro athletes
Sam was injured on the job and missed 22 days of work. Which of the following best describes the Workers Compensation payment to Sam? • Sam will be paid for 7 days, since there is a 7-day waiting period • Sam will be paid for 14 days, since there is a 7 day waiting period • Sam will be paid for all 22 days, since the 7 day waiting period is not imposed if the disability lasts more than 21 days • Sam will be paid for 29 days, the period of disability, plus the 7 day waiting period
• Sam will be paid for all 22 days, since the 7 day waiting period is not imposed if the disability lasts more than 21 days
All of the following describe insurable interest EXCEPT: • It must exist at the time of the loss • It must exist for insurance to respond • Shows a similarity between insurance and wagering • The insured would suffer an economic loss
• Shows a similarity between insurance and wagering
Joe has 10/20/10 liability limits, and he borrows Sue's car. Sue has 15/30/15 limits of liability. Joe injures a pedestrian while driving Sue's car and the pedestrian's medical bills due from liability total $22,000 (PIP & Med Pay are paid out in full). How much is paid from Liability? • Sue's policy pays $15,000 & Joe's policy pays $7,000 • Sue's policy pays $11,000 & Joe's policy pays $11,000 (pro-rata) • Sue's policy pays $15,000 & Joe's policy pays $10,000 • Sue's policy pays $ 7,000 & Joe's policy pays $15,000
• Sue's policy pays $15,000 & Joe's policy pays $7,000
Which of the following type of employee theft best fits a business with a large turnover in its personnel? • The Name Schedule coverage • The Basic Extended Reporting Period • The Blanket coverage • The firm should reduce its number of employees
• The Blanket coverage
Under one form of crime insurance, losses must occur during the policy period and be discovered within 1 year of policy expiration. This is: • The calculated period • The Loss Sustained Form • The waiting period • The Discovery Form
• The Loss Sustained Form
An insured and his spouse have two cars insured under a Personal Auto Policy. What coverage is available for a car that the wife borrows from a friend to use for the weekend? • there is no automatic coverage • The borrowed car would have the same coverage as the least covered vehicle • The borrowed car would have the broadest coverage available on the policy • coverage would extend to the borrowed car if notified her insurer prior to use
• The borrowed car would have the broadest coverage available on the policy
A furniture manufacturing business wanted to serve free beer at its company picnic. What is required for this business to have liability coverage for liquor consumption at the picnic? • The business CGL policy will cover this exposure • The business CGL requires the liquor liability form in this case • The business CGL should have the "extension of coverage" endorsement • There is no way liability for alcoholic beverages can be included under CGL
• The business CGL policy will cover this exposure
A contractor was concerned some of his tools, such as a welder, could be stolen from the job site. What inland marine form is best suited for this exposure? • The personal articles floater • The installation coverage form • The contractors equipment floater • The business auto policy
• The contractors equipment floater
A builder contracted for framing on a new section of a hospital. There is a surety bond purchased to guarantee completion of the project. Which of the following best describes the hospital position in the surety bond? • The hospital is the oblige • The hospital is the principal • The hospital is the surety • The hospital is the indemnitor
• The hospital is the oblige
Which of the following is NOT one of the "thresholds" in the "No-Fault" law? • Death of the insured • The temporary injury of the insured • A permanent loss of a bodily function • A permanent scarring on the face of an actress
• The temporary injury of the insured
A florist wanted coverage on business contents that vary in amount over the course of a year. Which form best covers this situation? • The value reporting endorsement • The peak season endorsement • The automatic increase in insurance endorsement • none of the above
• The value reporting endorsement
All the following are components of the Workers Compensation EXCEPT: • Unlimited death benefits • Reimbursement for medical expenses incurred • Replacement for lost wages on a percentage basis • Funeral costs up to $7500
• Unlimited death benefits
UM (Uninsured Motorist) coverage under the PAP (Personal Auto Policy) pays for: • damage to the insured's car caused by hit and run driver • bodily injury to the insured caused by hit and run driver • injury to a pedestrian caused by the insured • none of the above
• bodily injury to the insured caused by hit and run driver
