ALL Exams Combined
The insured owns a $750,000 home but only insures it for $600,000. The policy the insured bought has an 80% coinsurance provision. Unfortunately, the insured has suffered a $300,000 loss. Not including the policy deductible, how much will the insured be paid?
$300,000 X [$600,000 ÷ ($750,000 X 0.8)] = $300,000 (Coinsurance Formula)
Barney is injured by Aunt Bea in an automobile accident between each of their respective vehicles. Barney had $6,000 in medical bills and had purchased PIP with a $500 deductible. 1) How much will Barney collect from his insurance company? 2) What tort right amount does Barney have against Aunt Bea?
1) Barney recovers $4,400 from his own PIP. ($6,000 - $500) x 80% 2)$1,600. The full amount of the economic loss not paid or payable from PIP
Jack and Jill Insured have an insurance policy with Acme Insurance Company with a $300,000 Dwelling limit. The policy has a 2% Hurricane Deductible and an All Other Peril (AOP) Deductible of $2,500. How much will Jack and Jill be paid in the following loss scenarios? 1) What is the dollar amount of their Hurricane Deductible? 2) $50,000 Hurricane Loss? 3) $5,000 Hurricane Loss?
1)$6,000 (calculated as $300,000 Dwelling x 2% stated hurricane deductible) 2)$44,000 payment by the insurance company (calculated as $50,000 damages - $6,000 deductible) 3)$0 payment by the insurance company as the damages are less than the hurricane deductible
Insurance policies protect policyholders as owners of property and also afford coverage and hence protection for ______ who have provided ______ and leases to the insureds when acquiring the property.
Creditors Loans
TRUE/FALSE: Requiring "Insurable Interest" in a Property and Casualty policy upholds the principal of adhesion.
FALSE (that upholds the principal of indemnity)
TRUE/FALSE: Insurance contracts require the person insured to have insurable interest at the time of loss.
True
A _____ insurer is one formed under the laws of this state. a) Domestic b) Foreign c) Alien d) None of the above
a) Domestic
Jill Brown accepted a position at Big-Time Insurance Agency; which Big-Time Agency employee provides Jill with her authority in the agency? a) Jill's authority comes from her Supervising Agent b) Jill's authority comes from Florida s Attorney General c) Jill's authority comes from the Department of Corporations d) Jill's authority comes from her license solely
a) Jill's authority comes from her Supervising Agent
Liability insurance means any insurance where payment by the insurance company will be paid on behalf of the insured to another. Payment by the insurer will be based upon the insured's _______ to the payee/claimant. a) Liability b) Demand c) Deference d) Property
a) Liability
Florida law deems information provided by the insured in an insurance application to be ______ and not _______. a) Representations and not warranties b) Warranties and not representations c) Representations and not perjuries d) Warranties and not perjuries
a) Representations and not warranties
The key to prevention of E&O claims is the practice of ______ procedures. a) Standardized b) Annualized c) Social media d) Internet security
a) Standardized
At Big-Time Insurance Agency your IT department stresses "internet security". What are the primary reasons for their concern? (more than one answer applies) a) Theft of customer information b) Crash of agency network c) IT manager is "high-strung" d) The best defense is a good offense
a) Theft of customer information b) Crash of agency network
In your brand-new position with Big-Time Agency you have sold a policy to an existing customer that cost more than twice what the insured was paying before. Have you met your fiduciary responsibility to your insured? a) You have met your fiduciary responsibility to your insured if the coverage is what the insured needs, wants, and can afford b) You have met your fiduciary responsibility if the sale helps you to meet your sales quota c) You have met your fiduciary responsibility as long as the insured does not resist d) You have met your fiduciary responsibility if your insured can afford to pay the premium
a) You have met your fiduciary responsibility to your insured if the coverage is what the insured needs, wants, and can afford
The HO-6 Condo policy is required to have a minimum of $2,000 for the Coverage of Loss Assessment; and the coverage is statutorily _____ over any other insurance. a) "primary" b) "excess" c) "pro-rata" d) "equal shares"
b) "excess"
Shelby was injured in an auto accident and has $90,000 in injuries and has a $1,000 PIP deductible. How much will Shelby receive as a claims payout from her insurance company? a) $90,000 b) $10,000 c) $9,000 d) $7,000
b) $10,000 $90,000 injuries - $1,000 deductible = $89,000 x 80% = $71,200 available for payment but the maximum PIP benefit is $10,000
A long-standing agency insured has purchased a new policy to cover a new investment property. The insured advises she is "just about to board her plan" for a two-week vacation to Zanzibar. She has asked you to sign the Application for her until she gets back. What is your response? a) You tell her "Will do", we have your signature on file at the agency and you sign the application for her b) You thank her for her "vote of confidence" and then sign the application for her c) You tell her that you cannot lawfully sign the application for her and discuss other options. d) You tell her you already knew about her vacation and that you already signed the application for her
c) You tell her that you cannot lawfully sign the application for her and discuss other options.
When is it okay to misrepresent policy benefits or coverages? a) It is okay if it is just like a "little white lie" b) It is okay if it is spoken to make an insured "feel more comfortable" with their purchase c) It is okay if it keeps an insured from moving their business to another agency d) It is never okay to misrepresent policy benefits or coverages to an insured
d) It is never okay to misrepresent policy benefits or coverages to an insured
All of the following are high level Customer Representative "core competencies" EXCEPT: a) Communication skills b) Time management skills c) Planning and organization skills d) Using Facebook and Instagram
d) Using Facebook and Instagram
When would you write coverage for one of your insureds in the Excess and Surplus markets? a) When the E&S market has a lower premium b) When the E&S market offers broader coverage c) When the E&S market has lower deductibles for the same coverage d) When the exposure is not insurable by the standard markets
d) When the exposure is not insurable by the standard markets
Insurable Interest is the actual, lawful and substantial _______ interest in the safety or _______ of the subject of the insurance free from loss, _______, or pecuniary damage or impairment.
Economic Preservation Destruction
TRUE/FALSE: Cancellation conditions in general allow the insurance company to cancel at any time.
False. An insured can cancel at any time. Insurance Companies must give advance notice to the insured before cancellations.
Formula for Coinsurance
Loss X [Limit of Insurance ÷ (Value of Property X coinsurance Percentage)] = Loss Settlement NOTE: If the coverage amount is equal the agreed percentage of the property value, or more, the coinsurance clause does not have an impact on the claim payment to the insured.
Fill in the blank with "occupied" and/or "vacant". Dwelling under construction is ___________. Dwelling being renovated is ____________.
Occupied Vacant
TRUE/FALSE: Binders are issued before the Policy is issued; basically overage is put into effect, or "bound", PRIOR to the delivery of the policy.
True
TRUE/FALSE: Medical Payments coverage is primary, with respect to other available medical payments coverage, when occupying owned automobiles, and excess when occupying non-owned autos.
True
TRUE/FALSE: The FCRA mandates that anyone can dispute incomplete or inaccurate information in their credit file.
True
If financial responsibility did not exist at the time of an accident, two things must happen for the owner and/or operator to avoid penalties; select the two things which must happen to avoid penalties from the options below. a) The legally valid claims of others must be satisfied b) The owner and operator must provide SR-922 satisfaction c) The owner and operator must provide SR-22 certification d) A $10,000 fine must be paid to the Department of Motorist Vehicles
a) The legally valid claims of others must be satisfied c) The owner and operator must provide SR-22 certification
________ is by and large when a property is without occupant or contents (entirely and materially empty). a) Vacancy b) Immaterial occupancy c) Inoccupancy d) Incurably empty
a) Vacancy
You are at a baseball game with an insured and initiate a conversation about a Personal Umbrella policy you believe the customer needs. a) You are transacting insurance b) You are not transacting business unless you collect a premium c) You are not transacting business unless you tell the customer that he is covered d) You are not transacting business unless you complete an application
a) You are transacting insurance
The medical benefits paid under Personal Injury Protection are up to _____% of reasonable expenses for necessary medical services. a) 100 b) 80 c) 50 d) 25
b) 80
_______ is the unethical act of persuading a client to cancel a policy for the purpose of selling them another policy without regard to any negative affect it may have on the client. a) Defamation b) Twisting c) Unfair discrimination d) "unfairing"
b) Twisting
If a non-renewal is for a personal or commercial residential property insurance policy the company is: a) Required to provide a 120 day notice of the non-renewal b) Required to provide the reason for non-renewal c) Both answers are correct d) Neither answer is correct
c) Both answers are correct
Which doctrine holds that an unbroken chain of events which causes injury or property damage is the substantial and effective cause of the loss. a) Hard rule of contributory negligence b) Comparative negligence c) The doctrine of proximate causation d) Strict or absolute liability
c) The doctrine of proximate causation
If an accident occurs in the state of Florida, the named insured's PIP benefits apply to a residing relative if injured as an occupant of the insured's vehicles. If the accident occurs outside of the state of Florida is the residing relative still covered? a) No, there is no coverage for residing relative outside of the state of Florida b) No, there is no PIP coverage applicable to any accident outside of the state of Florida c) Yes, if the residing relative's injury occurred in one of the named insured's vehicles d) Yes, if the residing relative's injury occurred in one of the residing relative's vehicles
c) Yes, if the residing relative's injury occurred in one of the named insured's vehicles
Kevin has four vehicles, and he insures all of them with $10,000 per person and $20,000 per occurrence of "stacked" Uninsured Motorists Bodily Injury. Kevin was involved in an auto accident with a hit and run driver (accident was the other driver's fault). Kevin was alone in his car, what is the maximum recoverable amount Kevin could receive under his Uninsured Motorist Bodily Injury coverage? a) $10,000 b) $20,000 c) $30,000 d) $40,000
d) $40,000
The "policy territory" for the Personal Auto Policy includes all EXCEPT which of the following? a) U.S., its territories, or possessions b) Puerto Rico c) Canada d) Bahamas
d) Bahamas
A _________ in insurance terms is the reduction and/or destruction in use, value, access, custody, or function of or in property. a) Contract b) Policy c) Restitution d) Loss
d) Loss
Fred and Wilma Fieldstone have an insurance policy with Acme Insurance Company with a $100,000 Dwelling limit. The policy has a $500 franchise deductible and they have suffered a fire loss. How much will Fred and Wilma be paid in the following loss scenario? 1) What is the dollar amount of the Deductible? 2) $3,000 Loss 3) $400 Loss
1) $500 2) $3,000 payout as the damages exceeded the $500 deductible (the franchise deductible "disappears") 3) $0 payout as the damages were less than the deductible
Shirley Shell's home is valued at $1,000,000. She has an insurance policy with your agency with a Dwelling limit of $600,000; the policy has an 80% Coinsurance Clause. Shirley's home suffered a $300,000 loss. 1) What is the coinsurance formula? 2) How much will the insured be paid? 3) Why didn't the insured receive 100% of her loss as a payout?
1) Loss (X) Limit of Insurance / [Value of Property (X) Coinsurance Percentage] = Loss Settlement 2) $300,000 X $600,000 / [$1,000,000 (x) 80%] = $225,000 Loss Settlement (payment to insured) 3) The insured will collect $225,000 of the $300,000 loss. The $600,000 of Dwelling coverage was only 75% of the coinsurance requirement ($600,000 divided by [the Dwelling Value of $1,000,000 multiplied by the 80% coinsurance percentage]; which equals $600,000 divided by $800,000 which equals 75%).
The law requires an operator of a motor vehicle involved in an accident (one involving bodily injury or property damage rendering a vehicle inoperable) OR convicted of certain traffic offenses to respond for such damages and show proof of financial responsibility for damages in future accidents. Proof of financial responsibility can be all BUT which of the following? a) $30,000 line of credit at the bank b) 10/20/10 auto liability limits at the time of the occurrence c) Being a qualified self-insurer for 10/20/10 limits d) Posting a cash bond that guarantees responsibility to 10/20/10 limits
a) $30,000 line of credit at the bank
An insured has a $500 collision deductible on her auto policy. The insured lightly backed into a wall scratching the rear bumper cover on her car, resulting in $800 in damages. How much will the insurance company pay the insured for her loss? a) $300 b) $800 c) $500 d) $0
a) $300
Florida is a pure "comparative negligence" legal venue. If you are 90% at fault in an accident, what percent of your damages can you collect from the other party that was 10% responsible for the accident? a) 10% b) 50% c) 90% d) 100%
a) 10%
The following is an example of what? The information transmitted in this fax/email, including all attachments, is intended only for the individual(S), entity or entities to which it is addressed and might contain confidential, proprietary and/or privileged information. a) A confidentiality statement b) Terms and conditions c) Refund policy d) Proprietary information disclosure statement
a) A confidentiality statement
All of the following are true regarding "contracts of adhesion" EXCEPT which of the following? a) Ambiguities are resolved in favor of the insurance company b) The insured cannot negotiate language of policy c) Insurance companies draft the policy language d) The parties to the contract have "uneven" bargaining power
a) Ambiguities are resolved in favor of the insurance company
The insured has had a $60,000 loss and it has been discovered that she has two liability policies which both apply to the same loss on a pro-rata basis. The first policy has a $1,000,000 limit and the second policy has a $2,000,000 limit. How much will each company pay towards this loss? a) The first company will pay $60,000 and the second company will pay $60,000 b) The first company will pay $20,000 and the second company will pay $40,000 c) The first company will pay $1,000,000 and the second company will pay $2,000,000 d) The first company will pay $40,000 and the second company will pay $20,000
a) Ambiguities are resolved in favor of the insurance company
No-Fault PIP benefits apply in what amounts? (choose all that apply) a) Medical Benefits are paid at 80% of medical expenses b) Work Loss is paid at 60% of loss of income c) Household/Replacement Services are paid at 50% d) A $100,000 Death Benefit
a) Medical Benefits are paid at 80% of medical expenses b) Work Loss is paid at 60% of loss of income
Which of the following statements if any are true? STATEMENT ONE: Binders can be oral or in writing. STATEMENT TWO: Binders are issued after the issuance of a policy. a) Only statement one is true b) Only statement two is true c) Both statements are true d) Neither statement is true
a) Only statement one is true
Judy has a PIP claim with $5,000 in injuries and a $1,000 PIP deductible. How much will Judy receive as a claim payment from her insurance company? a) $5,000 b) $3,200 c) $1,000
b) $3,200 $5,000 Judy's Damage - $1,000 Judy's Deductible) x 80% = $3,200
FIGA handles the claims of insolvent property and casualty insurance companies. It covers up to _____ in damages and will pay up to an additional ____ if the claim is a homeowner's claim with structure and contents damage. a) $300,000 damages and an additional $100,000 if a homeowner's claim with structure and contents damage b) $300,000 damages and an additional $200,000 if a homeowner's claim with structure and contents damage c) $300,000 damages and an additional $300,000 if a homeowner's claim with structure and contents damage d) $500,000 damages and an additional $200,000 if a homeowner's claim with structure and contents damage
b) $300,000 damages and an additional $200,000 if a homeowner's claim with structure and contents damage
Greg has a PIP claim with $25,000 in injuries and a $1,000 PIP deductible. How will Greg's PIP claim be calculated? a) $25,000 Injuries x 80% = $20,000 PIP Payout b) ($25,000 Injuries - $1,000 PIP Deductible) x 80% = $19,200... but the maximum PIP Coverage is a $10,000 Payout c) ($25,000 Injuries - $1,000 PIP Deductible) x 80% = $19,200 PIP Payout
b) ($25,000 Injuries - $1,000 PIP Deductible) x 80% = $19,200... but the maximum PIP Coverage is a $10,000 Payout
Collision Coverage and Other Thank Collision Coverage for a "newly acquired auto" begins on the date you become the owner. However, for this coverage to apply, you must ask us to insure it within ____ days if the Declarations indicate that collision Coverage applies to at least one auto will have the broadest coverage now provided for any auto shown in the Declaration. a) 7 b) 14 c) 21 d) 30
b) 14
Johanna's laptop was stolen and a brand new one cost $1,200. Her insurance company pays her $800 ($1,200 new less $400 of Depreciation); this is an example of? a) Replacement cost value basis b) Actual cash value basis c) "Not-new" basis d) None of these apply
b) Actual cash value basis
The Acme Corporations has five warehouses at one location and Acme insures all five warehouses with one single $2,000,000 limit. Is this SPECIFIC or BLANKET insurance coverage on the warehouses? a) Specific b) Blanket
b) Blanket
_____ is the conduct of business with regard to laws and regulations set by a state or government authority. a) Governance b) Compliance c) Regulation d) Authority
b) Compliance
Insurance is a ______ whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies. a) Requirement b) Contract c) Gamble d) Risk retention technique
b) Contract
Joe Insured owns a $200,000 Home and has a $150,000 mortgage with Gold Coin Mortgage Company. Joe loses his job and, in a panic, believes he can't make his mortgage payment any longer; Joe subsequently sets fire to the house and the house is a Total Loss. Which if any of the following are true regarding a claims payment by the insurance company? a) Joe can collect up to his $50,000 of equity b) Gold Coin Mortgage can collect up to their $150,000 of equity c) Joe can collect up to $200,000 the value of the home d) Gold Coin Mortgage can collect up to the $200,000 the value of the home
b) Gold Coin Mortgage can collect up to their $150,000 of equity
A ______ is defined as a private passenger auto, pickup, van or trailer not owned by or furnished to or available for the regular use of the named insured or a family member which the insured hires, rents, leases, or borrows. a) Non-owned auto b) Hired auto c) Non-furnished auto d) Limited-use auto
b) Hired auto
Big-Time Agency may be held ______ if an insured has requested coverage and you (in your Customer Representative capacity) have agreed to provide that coverage but either do not place the insurance or do not do so in a timely fashion. a) Irresponsible b) Liable c) Faulty d) "a bad agency"
b) Liable
Straight deductibles specify the deduction of a flat amount from a loss, regardless of the ______ of the loss. a) Percentage b) Size c) Proportion d) None of the above
b) Size
Where do the Customer Representatives and Agents at Big-Time Insurance Agency document all agency activities? a) Personal journals/logs b) The agency's Agency Management System c) Both are correct
b) The agency's Agency Management System
An agent at Big-Time Insurance Agency was just fired because the agent induced a client to make a large insurance purchase by promising to and then giving the client part of his commission. Why was the agent fired? a) The agent was fired because he did not give all his commission to the client b) The agent was fired because he rebated his commission as an inducement to a sale c) The agent was fired because the manager did not like the agent or his client d) The agent was unjustly fired as rebating is a common, excepted, and lawful practice
b) The agent was fired because he rebated his commission as an inducement to a sale
Property Insurance policies with hurricane deductibles: a) The deductibles are on a per occurrence basis not a calendar year basis b) The deductibles are on a calendar year basis and not a per occurrence basis
b) The deductibles are on a calendar year basis and not a per occurrence basis
An "_____" insurer is one which does not have a certificate of authority issued by the department to transact insurance in this state. a) Authorized b) Unauthorized c) Stock d) Mutual
b) Unauthorized
Insurance policies require all changes to the policy to be made in ______ to the insurance company. a) Person b) Writing c) Fax d) None of the above
b) Writing
Herbert was permanently injured in an auto accident caused by the negligence of John. Herbert's injuries were valued at $200,000. Herbert has PIP and has recovered his full $10,000 limit, and he has a $300,000 single limit Uninsured Motorist coverage in his Personal Auto Policy (PAP). John has a Personal Auto Policy (PAP) with Bodily Injury Liability limits of $50,000 per person and $100,000 per occurrence. What is the dollar amount of Herbert's Uninsured Motorist Bodily Injury claim? a) $200,000 b) $190,000 c) $140,000 d) $0
c) $140,000 $200,000 of injuries - $10,000 PIP recovery less the $50,000 of Bodily Injury coverage from John's policy
Brenda has a PIP claim with $8,000 in injuries and a $0 PIP deductible. How much will Brenda receive as a claims payment from her insurance company? a) $10,000 b) $8,000 c) $6,400 d) $0
c) $6,400 $8,000 injuries - $0 deductible = $8,000 x 80%
Your insured has a Homeowners insurance policy and has filed a mold claim. It has been determined by the insurance company that she has $8,000 in mold damage. How much of this will be paid under a standard Homeowners insurance policy? a) $1,000 will be paid, as this is the typical fungi limit in a Homeowners policy b) $5,000 will be paid, as this is the typical fungi limit in a Homeowners policy c) $8,000 will be paid, as the typical fungi limit is $10,000 in a Homeowners policy d) $0 as mold is typically not covered in a Homeowners insurance policy
c) $8,000 will be paid, as the typical fungi limit is $10,000 in a Homeowners policy
Medical Payments are payments (without regard to fault or legal liabilities) for necessary medical and funeral expenses rendered within ____ years from the date of accident to an "insured". a) 1 b) 2 c) 3 d) 4
c) 3
The National Weather Service (NWS) categorizes storms as a hurricane which includes the time of a warning/watch all the way through to ___ hours after the NWS terminates the warning. a) 24 b) 48 c) 72 d) 96
c) 72
No-Fault requirements for non-residents who are not required to register their vehicles in Florida ARE subject to the No-Fault law if they have a motor vehicle physically present in Florida for more than ____ of the preceding 365 days. a) 30 b) 60 c) 90 d) 180
c) 90
Which, if any, of the following are covered by PIP? a) A non-permissive user involved in an accident b) Use of an insured vehicle to injure oneself purposefully c) A permissive user involved in an accident d) Use of an insured vehicle in the commission of a felony
c) A permissive user involved in an accident
Your supervising Agent overhears an Agent in the office discussing an insurance company with a potential customer and all the Agent is talking to the client about is the Insurance Company's television commercials. To make sure you are not somehow swayed by the Agent's tactics your Supervising Agent tells you the most important aspect of quoting and selling insurance to the consuming public is: a) Your Supervising Agent agrees with the Agent and says that mass advertising is the most important aspect in selling insurance b) Making a profit for the agency so "we can keep the lights on" c) Adequately insuring each customer d) Getting referrals
c) Adequately insuring each customer
In the Personal Auto Policy (PAP), payment for legal liability on behalf of the insured is for ______ and _______ to others. a) Property injury and medical damage b) Intentional acts and work-related injuries c) Bodily injury and property damage d) Strict and absolute liability
c) Bodily injury and property damage
Which of the following, if any, are correct regarding authorized and unauthorized insurers? a) An unauthorized insurer does not have a certificate of authority b) An authorized insurer is one duly authorized by a subsisting certificate of authority c) Both statements are correct d) Neither statement is correct
c) Both statements are correct
Which if any of the following statements are true? STATEMENT ONE: Pure Risk is only the chance of financial loss. STATEMENT TWO: Speculative Risk is the chance of loss or gain. a) Only statement one is true b) Only statement two is true c) Both statements are true d) Neither statement is true
c) Both statements are true
An insurance policy can be changed by adding a(n) _______ to a policy. a) Modification b) Indemnity c) Endorsement d) Exception
c) Endorsement
An act or a failure to act by your agency which leads to a financial loss to an agency's insured, insurance company partner, or claimant is referred to as an _______ or _______. a) Error or Omniscient b) Error or Emission c) Error or Omission d) Error or Admission
c) Error or Omission
The Customer Representative license requires the license holder to operate in ______ when dealing with the insurance consuming public. a) Full-time basis b) A friendly and courteous basis c) Good faith d) Faith good
c) Good faith
What is the key distinction between an insurer and a reinsurer? a) Insurance companies protect against fortuitous events and reinsurers do not b) Insurance companies are domestic and reinsurers are alien c) Insurers primarily engage in the direct protection of individuals and business and reinsurers insure insurers d) Insurers are organized as mutuals and reinsurers are organized as stock companies
c) Insurers primarily engage in the direct protection of individuals and business and reinsurers insure insurers
Jack has PIP coverage, and his neighbor Jill has PIP coverage. Jack and Jill are involved in a car accident; Jack was at fault in the accident. Jill's injuries total $3,000. a) Jill can sue Jack in court to recover the $3,000 b) Jill can make a claim against Jack's PIP c) Jack is exempt from any claim or suit d) None of these apply
c) Jack is exempt from any claim or suit
An insurance company owned by stockholders is a... a) Mutual Insurer b) Reciprocal Exchange c) Stock Insurance Company d) Lloyds of London
c) Stock Insurance Company
A man steps off a curb into busy traffic while he was texting on his iPhone; he stepped directly in front of a car which was forced to slam on their brakes. Unfortunately, the car skidded into a food truck which then ricocheted into the food truck next to it. What was the proximate cause of all the damage? a) Car skidding into the first food truck b) The food truck ricocheting into the second food truck c) The man stepping into oncoming traffic d) None of the above
c) The man stepping into oncoming traffic
Insurance contracts are personal contracts where the focus is on? a) The property being insured b) The operations being insured c) The person or persons being insured d) All of the above
c) The person or persons being insured
You have been advised by your agency manager that your agency will now be using a premium finance company for your large Homeowners Insurance policies. The premium finance company you are using charges 15% simple interest to the insured. Is the charge of 15% simple interest lawful? a) There are no laws which constrain a stated maximum interest rate by a premium finance company b) No, 15% simple interest is unlawful as it exceeds the 8% legal maximum c) Yes, 15% simple interest is lawful as it did not exceed the 18% legal maximum d) Any % of simple interest is acceptable but there is a 12% maximum on compound interest
c) Yes, 15% simple interest is lawful as it did not exceed the 18% legal maximum
Your co-worker (also licensed 4-40 Customer Representative) has a work habit of scanning bound Applications into Big-Time Agency's management system. The co-worker doesn't want to "waste paper" and uses the reverse side of those Applications as a notepad to take notes and phone messages. You've noticed that those "re-used" Applications with insured's personal info is often thrown into the trash after making notes and taking voice messages instead of being shredded. a) Your co-worker is guilty of insurance "double-dipping" b) You should turn your co-worker into the police c) You should bring this situation to the attention of your Supervising Agent d) You should take the Applications from your co-workers trash can and shred them yourself
c) You should bring this situation to the attention of your Supervising Agent
Insurance companies are required to provide __ day notice of either policy renewal or non-renewal. a) 10 b) 20 c) 30 d) 45
d) 45
Which, if any, of the following are "elements" of the No-Fault Law? a) Those that are subject to the law, and comply with the law, are immune from legal liability for causing bodily injuries to others b) Personal Injury Protection (PIP), is the first party coverage which affords coverage to those injured in automobile accidents without regard to fault c) The No-Fault law requires PIP coverage be carried by the owners of motor vehicles; and imposes penalties for failing to do so d) All the above
d) All the above
Which, if any, of the following are non-compliance penalties for not complying with the Florida No-Fault Law? a) No "immunity" from legal liabilities which are granted to those who do not comply b) Personally responsible for payment of PIP benefits to those entitled to receive such benefits c) Suspension of driver's license and vehicle registration d) All the above
d) All the above
The Uninsured Motorists (UM) law requires that every policy that provides primary Liability coverage for a specific motor vehicle must include "stacked" UM at the same limits as apply for Liability coverage, unless the insured, in writing does which if any of the following: a) Rejects UM coverage b) Elects UM coverage at limits lower than those that apply for Liability c) Elects "Non-stacked" UM coverage d) All the above are options for the insured
d) All the above are options for the insured
Catastrophic ground cover collapse is the geological activity resulting in ALL of the following EXCEPT: a) Abrupt collapse of the ground cover b) Depression in the ground cover clearly visible to the naked eye c) Structural damage to the building/dwelling d) Condemnation of the building/dwelling by the insurance company
d) Condemnation of the building/dwelling by the insurance company
All of the following are possible consequences for aiding and abetting an "unauthorized insurer" EXCEPT? a) Responsibility to pay for all unpaid claims b) Suspension and/or revocation of insurance licenses c) Third degree felony d) Double "secret" probation
d) Double "secret" probation
What does it mean "insurance contracts are contracts of adhesion"? a) The insured cannot negotiate the language of the contract b) Ambiguities are resolved in favor of the insured c) Insurance contracts are written by the insurance companies d) Each of these is correct
d) Each of these is correct Contracts of adhesion are drafted by one party; non-drafting parties have little or no ability to negotiate the language of the contract; inasmuch, ambiguities are resolved in favor of the non-drafting party.
All of the following are true regarding "insurable interest" EXCEPT: a) It is the economic interest in property. b) It must exist before an insurance policy will pay for a loss. c) It is the extent to which an insured might be indemnified. d) Insurable interest is not required in a property insurance policy.
d) Insurable interest is not required in a property insurance policy.
The amount of contents to satisfy the "CONTENT" requirement to demonstrate an insured property is occupied is... a) There is no "contents requirement" b) $100,000 of contents c) $40,000 of contents d) Is normally implied to be that to maintain a functional and habitable dwelling
d) Is normally implied to be that to maintain a functional and habitable dwelling
PIP exceptions aka "thresholds" permit the recovery of non-economic loss (i.e. action for pain, suffering, mental anguish, inconvenience) if the injury results in all EXCEPT which of the following? a) Significant and permanent loss of a bodily function b) Permanent injury other than scarring and disfigurement c) Significant and permanent scarring or disfigurement d) Loss of work longer than 21 days
d) Loss of work longer than 21 days
All of the following are true regarding the Insuring Agreement in Liability insurance policies EXCEPT: a) The insurance company agrees to pay on behalf of the insured for property damages b) The insurance company agrees to pay on behalf of the insured for bodily injuries c) The insured must be legally obligated to make restitution before the insurance company will pay d) Payments are made directly to the insured or the insured's family members
d) Payments are made directly to the insured or the insured's family members
Needs-based selling includes all BUT which of the following? a) Presenting products to clients that meet their needs b) Presenting products to clients that they can afford c) Educating the customer so they can make informed decisions d) Selling products which pay the highest commission
d) Selling products which pay the highest commission
Judy has a loss that was caused by another party. She makes a claim with her own insurance company and now her insurance company is ________ to Judy's right of recover against the responsible party. a) Transferated b) Damagated c) Insuranceated d) Subrogated
d) Subrogated
What type of "close" is the following statement when made to an insured to "close a sale"? "If you don't buy this policy today you will never be eligible for it again." a) Good agent- bad agent close b) Time-pressure close c) "No time like the present" close d) The statement is not a closing technique; the statement is unlawful coercion
d) The statement is not a closing technique; the statement is unlawful coercion
You are at a friend's party when you are introduced as "an insurance guru" to a couple you have never met before. The couple starts asking questions and goes to their car to bring you a copy of their auto insurance declarations page. The couple wants to know if they are adequately insured. You tell them that they are under-insured and schedule an appointment with them for next week. Is this considered "transacting insurance"? a) You are not transacting business unless you complete an application b) You are not transacting business unless you collect a premium c) You are not transacting business unless you tell the customer "coverage is bound" d) This would be considered the transacting of insurance
d) This would be considered the transacting of insurance
