Insurance

What is the main distinction between a hired auto and a non-owned auto?

Who owns the auto; the distinction between a hired and non-owned auto does not depend on whether payment is made for the use of the auto, but rather on whether it is owned by an employee

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered

concealment; concealment is the legal term for the intentional withholding of information of a material fact that is crucial in making a decision. In insurance, concealment is the withholding of information that will result in an imprecise underwriting decision

A trucking company has a 1 million umbrella policy in place, the business owner agrees to maintain a 200/500/100 limit on auto liability and a personal liability of $400,000. After a car accident, the business is sued. Injuries are awarded to a single injured party in the amount of $300,000. It turned out that the business owner carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay?

$100,000; the umbrella policy pays as if the underlying limits were in effect. The underlying limit agreed to buy this business was $200,000 per person. Therefore, the umbrella would be the additional $100,000. The business itself would be responsible for the difference between what was required and what was actually provided

Instead of charging service charges for premium financing, and insurance agent may charge on any unpaid balance, an annual interest rate of up to

18%; in lieu of service charges on premium financing, and insurance agent or agency may charge an interest rate not to exceed 18% per year on any unpaid balances

For there to be negligent liability, all of the following must exist EXCEPT

A reasonable expectation that the act may cause injury or damage; Liability insurance covers injury or damage to others that is neither intended nor expected by the insured

Personal Umbrella Policy May act as excess over any of the following insurance coverage policies EXCEPT

Auto collision coverage; auto collision is not a liability coverage, therefore the personal umbrella will not act as excess

In Florida, the cost of mediation is paid by

Both parties; both parties must share the costs of mediation unless the mediator determines that one party has not mediated in good faith

When must an insurer provide forms of proof of loss to an insured?

Upon receiving a written request from a person who wants to submit a claim; an insurer is required to provide forms of proof of loss upon written request from a person who wants to submit a claim for a loss.

Under which legal defense is there an apportionment of damages based upon the degree of fault of each of the plaintiffs and the defendant?

Comparative negligence; under comparative negligence, the recovery by the plaintiff is lessened or increased depending upon the degree of each party's negligence

Which of the following elements of an insurance contract requires payment of premium?

Consideration; the binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss

Which of the following dwelling policies require insurance equal to at least 80% of the replacement value of the dwelling at the time of loss in order to provide replacement cost coverage?

DP-2 and DP-3; under a DP-2 or DP-3, in order to collect replacement cost amounts in the event of a loss, the amount of insurance must be not less than 80% of the replacement cost of the dwelling at the time of loss. If the amount of insurance is less than 80%, the penalty is an actual cash value (ACV) settlement

If an insurer appoints a customer representative appointment needs to be filed with which of the following entities

Department; each insurer appointing an agent, adjuster, service representative, customer representative, or managing general agent in Florida must file all appointments with the department and, at the same time, pay that applicable appointment fee and taxes

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Insuring agreement; the part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the insuring government

Which of the following describes an insurers responsibility for payment under a policy, as stated in the common policy provisions?

Limits of liability; limits of liability are the insurance liability for payment as stated in the insurance policy

Insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?

Misrepresentation; misrepresentation is the act of portraying sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends etc.

Due to appreciation, the amount of insurance on a business is less than 80% of its actual value on the day of the loss. Which of the following is true?

The coinsurance penalty applies; if the coverage does not equal at least 80% of the value on the date of the loss, the insured is responsible for part of the loss known as a coinsurance penalty

And insured has extended coverage on her dwelling that includes coverage for vandalism and malicious mischief. When evening, she is sitting in her living room when she is a crash and the sound of glass breaking. She runs to the door and discovers a break has been thrown through her glass door. To inform her and sure of a possible claim, she feels out a form detailing the events leading to the loss. What is the name of the form?

Notice of claim form; notice of claim is a form or statement from an insured to an insurer, informing the insurer that events leading to a possible claim have occurred. The notice will include information as to how, when, and where the loss took place

In the last 72 hours, there were 3 instances of volcanic eruptions that damaged a property covered by a dwelling policy. How many deductibles will the insured have to pay before the policy covers the damages caused by the eruptions

One; a volcanic eruption occurring within a 72-hour period (of the initial eruption) will be considered one occurrence. This means there will only be one deductible

The extended non-owned coverage provides protection to

Only the person(s) named on the policy; Only the person(s) name is covered. There is no automatic coverage for a spouse or other family members

In reference to insurable interest, which of the following is NOT an element of insurable risk

Personal; for any person or property covered under an insurance policy, insurable interest must exist. I'm sure of all interest is broken into three categories which include financial (a monetary interest), blood (a relative) and business (business partner)

Which of the following types of property is not movable?

Real property; personal property is property that is movable, real property is not movable

In the state of Florida, which of the following government entities is responsible for the administration and regulation of insurance?

The Department of financial services; the Department of financial services is responsible for the administration and regulation of insurance in Florida

And insured has decided to never drive another vehicle and wants to transfer his auto insurance policy to his wife. What does the insured need to transfer the policy?

The written consent of the insurer; The insured cannot transfer his or her rights or interest in the policy without the written consent of the insurer. If the named insured dies, coverage will be provided for the surviving spouse or legal representative of the insured, but only until the end of the policy period