Certification Test
What specifies that the insured may not transfer rights of ownership without the insurer's prior written consent? A) Appraisal B) Arbitration C) Recession D) Assignment
D) Assignment
Whose consent is required to transfer or assign interest in an insurance contract to another? A) The insurance company B)The insured C) The insurance department D) The mortgagee
A) The insurance company
Which type of coverage will replace damaged or destroyed property with the equivalent at current cost? A) Stated amount B) Actual cash value C) Replacement cost D) Market value
C) Replacement cost
An award to an injured party for compensatory damages of losses that cannot be assigned a specific dollar value are known as: A) Punitive Damages B) General Damages C) Special Damages D) Vicarious Liability
A) Punitive Damages
Gambling is an example of which type of risk? A) Speculative B) Partial C) Whole D) Pure
A) Speculative
Under Homeowner's Section II, Damage of Property to Others pays up to: A) $1,000 B)$5,000 C)$1,500 D)$10,000
A) $1,000
How many credit hours of continuing education must a new agent complete every 2 years? A) 20 (with 4 hours of law and ethics) B) 12 (with 5 hours of law and ethics) C) 30 (with 5 hours of law and ethics) D) 24 (19 elective with 5 hours of law and ethics)
A) 20 (with 4 hours of law and ethics)
A Florida insurer must give the named insured at least __ days' advance written notice of nonrenewal: A) 30 B) 15 C) 20 D) 45
A) 30
Which of the following individuals would not be considered a family member covered by a Personal Auto Policy? A) A brother living out of state B) A foster Child C) A resident member of the household D) A blood relation
A) A brother living out of state
Under section II of the homeowners policy, who is NOT an insured? A) A friend residing in your home B) Any person or organization legally responsible for animals which are owned by you C) Resident relatives D) The homeowner
A) A friend residing in your home
When must an insurable interest exist in a property policy? A) At the time of a loss B) At the time of the first premium is paid C) At the time of policy delivery D) At the time of application
A) At the time of a loss
By what other name is the Dwelling form DP-2 known? A) Broad form B) Blanket form C) Basic form D) Special form
A) Broad Form
Evidence that specific types of insurance were purchased by the insured at certain limits on a specific date is called a: A) Certificate of Insurance B) Application C) Endorsement D) Binder
A) Certificate of Insurance
Liability involving a degree of negligence that is established by a court of law, best describes: A) Contributory Negligence B) Assumed Liability C) Assumption of the Risk D) Comparative Negligence
A) Contributory Negligence
Which concept is designed to eliminate small claims and help in reducing the cost of insurance? A) Deductibles B) Exclusions C) Franchise D) Coinsurance
A) Deductibles
Which part of the insurance contract specifies the risks the policy will not cover? A) Exclusions B) Declarations C) Insuring agreement D) Conditions
A) Exclusions
A reinsurance agreement that allows ceding and reinsurance companies the opportunity to negotiate coverage for individual risks is a: A) Facultative Agreement B) Treaty Agreement C) Risk Sharing Plan D) Breach of Trust
A) Facultative Agreement
Which homeowner policy form is for dwelling owners who do not wish to insure their older homes for replacement cost? A) HO-8 B) HO-3 C) HO-6 D) HO-2
A) HO-8
Which homeowner policy form is for dwelling owners who do not wish to insure their older homes for replacement cost? A) HO-8 B) HO-6 C) HO-2 D) HO-3
A) HO-8
The Personal Articles Floater provides for all of the following, except: A) Insures commercial property B) Coverage is provided for open perils C) Worldwide coverage D) Claims are settled on an actual cash value basis
A) Insures commercial property
The price a willing buyer will pay for a property from a willing seller is: A)Market Value B)Actual Appraised Value C) A Valued Policy D) Actual Cash Value
A) Market Value
Who are the owners of a mutual insurance policy? A) Policyholers B) Directors C) Stockholders D) Underwriters
A) Policyholders
An auto insurance policy must provide personal injury protection to all of the following, except: A) The thief of a stolen vehicle B) The named insured C) Persons operating the insured motor vehicle D) Passengers in the motor vehicle
A) The thief of a stolen vehicle.
Which of the following coverages will protect the insured against drivers who have inadequate or insufficient coverage to respond to claims? A) Underinsured B) Other than Collision C) Uninsured D) At-Fault
A) Underinsured
What is an inherent vice? A) The cause of a loss B) A quality within property that causes it to damage or destroy itself C) The increase in the cause of a loss D) Coverage for only certain perils
B) A quality within property that causes it to damage or destroy itself.
Which term describes the cost to replace property minus the deduction for depreciation? A) Fair Market Value B) Actual Cash Value C) Stated Value D) Replacement Cost
B) Actual Cash Value
Which of the following terms describes an insurance company that has been organized outside the United States or its possessions? A) Foreign B) Alien C) Authorized D) Domestic
B) Alien
An insured and insurer will utilize which of the following when they are unable to agree on the amount of a claim to be paid? A) Subrogation B) Appraisal C) Assignment D) Recession
B) Appraisal
By what other name is the Dwelling form DP-2 known? A) Blanket Form B) Broad Form C) Special Form D) Basic Form
B) Broad form
What is another name for the Homeowners Form HO-5? A) Special Form B) Comprehensive Form C) Modified Coverage Form D) Broad Form
B) Comprehensive Form
Which of the following does not fall within the Florida definition of "transacting" insurance? A) Negotiating with a possible client prior to the execution of the contract B) Direction as to the specific use of commissions generated by the sale of the insurance C) Endorsing or modifying the policy after its sale D) The solicitation of insurance from the general public
B) Direction as to the specific use of commissions generated by the sale of the insurance
Which of the following is an example of a peril? A) Unlocked front door to a home B) Earthquake C) Gasoline stored on the premises
B) Earthquake
Attachments that broaden or amend coverage in a property or casualty policy are known as: A) Rider B) Endorsements C) Binders D) Amendments
B) Endorsements
The federal act that protects consumer privacy by ensuring that data collected is confidential, accurate and used for a proper and specific purpose is the: A) Terrorism Risk Insurance Act B) Fair Credit Reporting Act C) Gramm-Leach Bailee Act D) USA patriot act
B) Fair credit reporting act
Which peril is covered under the Dwelling form DP-1? A) Falling Objects B) Fire C) Weight of ice, snow, or sleet D) Freezing
B) Fire
If an insured's claim was denied, the mortgagee can collect under the policy as long as the mortgagee meets all of the following requirements, except: A) Pays any premium due under the policy on demand if the insured fails to do so B) Hire a private investigator to follow the insured C) Notifies the insurer of any change of ownership or change in risk if aware of those changes D) Submit proof of loss to the insurer if the insured fails to do so
B) Hire a private investigator to follow the insured
The attempt to restore an insured to their pre-loss condition is known as: A) Appraisal B) Indemnification C) Coinsurance D) Subrogation
B) Indemnification
Which provision requires the insured to maintain a certain limit of insurance? A) Insuring Agreement B) Limit of Liability C) Replacement Cost D) Coinsurance
B) Limit of Liability
Which peril is NOT covered under Part D of the Personal Auto Policy? A) Riot B) Losses due to war or nuclear hazard C) Earthquake D) Flood
B) Losses due to war or nuclear hazard
Which coverage is provided under Part B of the Personal Auto Policy? A) Damage to the insured auto B) Medical Payments C) Uninsured motorist's coverage D) Liability coverage
B) Medical Payments
Which tort is unintentional? A) Trespassing B) Negligence C) Battery D) Assault
B) Negligence
A licensed individual who is limited to transacting business related to property and casualty insurance sold to individuals and families for noncommercial purposes is a: A) Public Adjuster B) Personal Lines Agent C) Customer Service Representative D) General Lines Agent
B) Personal Lines Agent
The Department of Financial Services has the power to do all of the following, except: A) Oversee the insurance industry based on the Insurance Code B)Regulate the state Medicaid program C) Regulate policy forms and rates D) Guard against unauthorized insurance activities.
B) Regulate the state Medicaid program.
The right of the insurer to take possession of damaged property after paying for its loss is called: A) Arbitration B) Right of salvage C) Assignment D) Liberalization
B) Right of salvage
Which peril is NOT covered under Part D of the Personal Auto Policy? A) Earthquake B) Road damage to tires C) Flood D) Riot
B) Road damage to tires
All of the following are a regulatory concern with unlicensed entities transacting insurance business in Florida, except: A) Potential for unpaid claims due to dishonesty and lack of sound actuarial decisions B) State or federal guaranty funds will cover unpaid claims of unlicensed entities as a priority C) Lack of oversight by state or federal regulatory agencies D) Potential for criminal activity
B) State or federal guaranty funds will cover unpaid claims of unlicensed entities as a priority.
Which condition provides the insurer the right to collect against a responsible third party? A) No Benefit to Bailee B) Subrogation C) Liberalization D) Restoration
B) Subrogation
All of the following are correct regarding the Florida Insurance Guaranty Association, except: A)The association's liability does not exceed $300,000 per claim. B) The association is responsible for penalties and interest. C) All insurers authorized to conduct business in Florida must be members. D) The association is divided into 2 separate accounts.
B) The association is responsible for penalties and interest.
What is the definition of a risk? A) Hazard B) The chance of a loss C) The loss itself D) A peril
B) The chance of a loss
Choose the false statement about mobile home insurance: A) When threatened by a covered peril, the policy provides $500 for reasonable expenses for moving the mobile home B) The mobile home and contents may be written only on a named peril basis C) Coverage A insures the mobile home and property installed on a permanent basis D) While being moved to a new location, an optional endorsement will provide coverage for collision up to 30 days.
B) The mobile home and contents may be written only on a named peril basis.
The liability assigned to one party for the conduct of another, based solely on a relationship between the two is: A) Personal injury B) Vicarious Liability C) Gross Negligence D) General Liability
B) Vicarious Liability
Which term describes the cost to replace property minus the deduction for depreciation? A) Fair Market Value B) Stated Value C) Replacement Cost D) Actual Cash Value
D) Actual Cash Value
After the first 24 hours, the earthquake endorsement covers damage for how many additional hours? A) 36 B) 72 C) 48 D) 24
C) 48
Which vehicle is considered a temporary substitute auto? A) A vehicle rented by the insured on vacation B) An auto being test-driven by an insured for possible purchase C) A dealer's loaner car used while the insured's auto is being repaired D) A neighbor's auto borrowed by an insured over a weekend
C) A dealer's loaner car used while the insured's auto is being repaired
All of the following statements are correct regarding the treatment of motorcycles, except: A) The rider education course requires a minimum of 12 hours of instruction with at least 6 hours of actual motorcycle operation B) The Florida motorcycle Safety Education Program establishes and administers motorcycle safety courses C) A helmet is required for all riders in Florida D) A motorcycle is defined as having a seat or saddle for the use of the rider and designed to travel on not more than 3 wheels in contact with the ground.
C) A helmet is required for all riders in Florida
An agreement between 2 parties enforceable by law describes: A) A representation B) Legal Purpose C) An Insurance Contract D) A warranty
C) An insurance contract
Which loss is an example of a direct loss? A) Expediting expenses B) Loss of income C) Collapse D) Loss of rents
C) Collapse
Which of the following is an example of a peril? A) Indifference B) Gasoline stored on the premises C) Earthquake D) Unlocked front door to a home
C) Earthquake
Which peril is covered under the Dwelling Form DP-1? A) Freezing B) Weight of ice, snow or sleet C) Lightning D) Falling Objects
C) Lightning
A nonadmitted insurer is a company: A) Organized in another state in which its home office is located. B) With nonadmitted assets C) Not licensed by the state insurance department to transact business. D) That has been issued a Certificate of Authority
C) Not licensed by the state insurance department to transact business.
A continuous or repeated exposure is a condition describing which of the following? A) Concurrency B) Accident C) Occurrence D) Proximate Cause
C) Occurrence
Which action would not constitute an unfair claim settlement practice on the part of an insurance company in its claim handling or processing? A) Offering an insured substantially less than a lawsuit would award him/her B) Disclosing a history of appealing arbitrated decisions in order to threaten the claimant into accepting less than the settlement awarded C) Offering an insured a prompt explanation in denial of a claim or offer of compromise D) Making claim payments that are not accompanied buy statements containing the coverage under which payments are being made
C) Offering an insured a prompt explanation in denial of a claim or offer of compromise
A formal statement made by the insured that provides necessary details for the insurer to determine liability under a policy is a: A) Certificate of Insurance B) Certificate of Authority C) Proof of Loss D) Declaration
C) Proof of Loss
Lightning strikes a home and starts a fire that destroys the structure and its contents. The lightning is the: A) Indirect Loss B) Peril C) Proximate Cause D) Risk
C) Proximate Cause
Which of the following is NOT considered a fiduciary responsibility of an agent in Florida? A) Maintain funds belonging to the insurer in a separate account B) Have knowledge of state laws C) Use insurer funds to cover agency expenses D) Accept premiums on behalf of the insurer
C) Use insurer funds to cover agency expenses
For insurance purposes, an unfurnished beach house is considered ______ because no one is living there. A) Empty B) Unoccupied C) Vacant D) Unused
C) Vacant
Answers to specific questions on an insurance application that are guaranteed to be true best defines: A) Concealments B) Misrepresentations C) Warranties D) Representations
C) Warranties
Which loss would NOT be covered by the National Flood Insurance Program? A) Unusual and rapid accumulation or runoff of surface waters B) Mudflow caused by accumulation of water C) Water main breaks D) Overflow of inland or tidal waters
C) Water Main break
An insured has an automobile policy with bodily injury limits of $100,000/$300,000. Two persons are struck by the insured's auto and are awarded $15,000 and $90,000 respectively. How much will the insured's automobile policy pay? A) $100,000 B) $101,000 C) $105,000 D) $105,000, plus defense costs
D) $105,000, plus defense costs
All of the following are minimum financial responsibility limits of liability for automobile insurance in Florida for the owner of a motor vehicle, except: A) $10,000 property damage B) $10,000 bodily injury per person C) $20,000 bodily injury per accident D) $20,000 property damage
D) $20,000 property damage
An agent must communicate with the department regarding any change in address within __ days. A) 60 B) 10 C) 90 D) 30
D) 30
With regard to binders, which of the following statements is correct? A) Binders are valid for 15 days after the policy is issued B) A binder is not usually valid for more than 90 days C) A binder may be oral or written D) A binder may be canceled by the insured with 2 days' notice.
D) A binder may be canceled by the insured with 2 days' notice
A hurricane occurrence: A) Is determined by the insurer covering the claim B) Is the time period during which hurricane conditions exist in a particular county C) Ends 36-48 hours after the last watch or warning has been issued D) Begins when a hurricane watch or warning is issued for any part of Florida by the National Hurricane Center of the National Weather Service
D) Begins when a hurricane watch or warning is issued for any part of Florida by the National Hurricane Center of the National Weather Service
Which of the following is incorrect with regard to commissions and compensation? A) An agent may not share a commission with anyone who does not have a license and appointment for the type of insurance sold. B) An insurer and producer must keep a copy of their producer compensation agreement for 3 years. C) Commissions are a percentage of the first year premium, and thereafter, a percentage of subsequent renewal premiums. D) Commissions may be shared with a person who is licensed and appointed in a different line of business.
D) Commissions may be shared with a person who is licensed and appointed in a different line of business.
Which section of an insurance policy states the obligations of the parties to the contract? A) Exclusions B) Insuring Clause C) Declarations D) Conditions
D) Conditions
Catastrophic Ground Cover Collapse is a geological activity that results in all of the following, except: A) The abrupt collapse of the ground cover. B) Structural damage to the covered building. C) A depression in the ground cover visible to the naked eye. D) Damage consisting merely of the settling or cracking of a foundation, structure, or building.
D) Damage consisting merely of the settling or cracking of a foundation, structure, or building.
Which concept is designed to eliminate small claims and help in reducing the cost of insurance? A) Franchise B) Coinsurance C) Exclusions D) Deductibles
D) Deductibles
Which of the following forms provides open perils coverage for coverage's A and B? A) HO-8 B) HO-6 C) HO-5 D) HO-3
D) HO-3
Which of the following Forms provides open perils coverage for Coverages A, B, and C? A) HO-3 B) HO-6 C) HO-8 D) HO-5
D) HO-5
Which of the following forms provides named perils coverage to the owner of a condominium or cooperative unit? A) HO-5 B) HO-4 C) HO-8 D) HO-6
D) HO-6
An applicant for general and personal lines licensing must qualify by all of the following, except: A) Be at least age 21 B) Be a U.S Citizen C) Be honest and trustworthy D) Have a place of business in Florida identifiable and accessible by the public.
D) Have a place of business in Florida identifiable and accessible by the public.
An uncontrollable fire is a: A) Friendly fire B) Mysterious Disappearance C) Binder D) Hostile Fire
D) Hostile Fire
The personal articles floater provides for all of the following, except: A) Coverage is provided for open perils B) Worldwide coverage C) Claims are settled on a cash value basis D) Insures commercial property
D) Insures commercial property
Which of the following hazards is a careless attitude or general indifference on the part of the insured toward the occurrence of a loss? A) Physical B) Legal C) Moral D) Morale
D) Morale
A written notification provided by the insured to an insurer that specifies the details about the time, place and circumstances surrounding a loss is a: A) Notice of Occurrence B) Notice of Accident C) Certificate of Insurance D) Notice of Loss
D) Notice of Loss
Liability coverage is excluded under a personal auto policy for ownership, maintenance, or use of all of the following, except: A) Motorcycle B) A company car C) Vehicles preparing for a race D) Off- road vehicle used by insured in an emergency
D) Off-road vehicle used by insured in an emergency
An insurance company is considered a domestic insurer in Florida if it is: A) Domiciled and organized under the laws of any state B) Admitted to do business in Florida C) Organized under the laws of another country D) Organized and admitted in Florida
D) Organized and admitted in Florida
Lightning strikes a home and starts a fire that destroys the structure and its contents. The lightning is the: A) Indirect loss B) Pure risk C) Speculative risk D) Proximate cause
D) Proximate cause
An award to an injured party for compensatory damages of actual known expenses such as loss of earnings is known as: A) Medical payments B) General Damages C) Special Damages D) Punitive Damages
D) Punitive Damages
Marie was mugged on the street when a stranger grabbed her purse and threatened to knock her down. This act describes which of the following? A) Burglary B) Larceny C) Theft D) Robbery
D) Robbery
The scrap value of damaged property is the: A) Arbitration value B) Appraisal Value C) Actual Cash Value D) Salvage Value
D) Salvage Value
All of the following perils are automatically covered under the DP-3 policy, except: A) Damage by burglars B) Hail C) Vandalism D) Scorched countertops
D) Scorched countertops
All of the following are duties of the insured following a loss, except: A) Protect property from additional damage B) Notify the insurance department in case of loss C) Inventory lost property D) Separate damaged from undamaged property
D) Separate damaged from undamaged property
What is another name for the Homeowners form HO-4? A) Special B) Broad C) Modified Coverage D) Tenants
D) Tenants
Which of the following is NOT correct with regards to the Chief Financial Officer? A) The administration of Florida insurance law is the responsibility of the CFO B) The CFO oversees Divisions of Insurance Agents and Agency Services, Insurance Fraud, Consumer Services and Office of Consumer Advocate C) The CFO acts as head of Department of financial Services D) The CFO is appointed by the Governor
D) The CFO is appointed by the Govrenor.