Number 2

Which of the following is not an element of negligence?

Assumption of risk

When property is valued on a replacement cost basis, losses will be paid:

At today's costs, without any deduction for depreciation

Under the Cameras Floater, which of the following is true?

Automatic coverage is provided on newly acquired items for 30 days, up to 25% of the policy amount

In Florida, how much must be covered at a minimum under a unit owner's residential property policy in property loss assessment coverage?

$2,000

A general lines agent can finance insurance premiums and charge service charges up to______ per installment.

$3.00

Which of the following is a legal liability imposed without demonstrated negligence?

Absolute Liability

Theft is specifically defined as:

Any act of stealing

The Florida Insurance Guaranty Association will assume the contractual obligations of an insolvent insurer up to _________ for any one policy.

$300,000

Company A's per person Limit of Liability is $100,000 and Company B's is $200,000 for the same insured. How much will Company B have to pay for a covered $6,000 loss caused by the insured?

$4,000

A liability policy contains a per person bodily injury limit of $25,000 and a per occurrence limit of $50,000. If an accident were to occur and three persons have claims of $20,000 each, the total amount paid is:

$50,000

An insured placed with the FAJUA must be notified in writing that the insurance coverage is not through the private market within _________ of placement.

10 days

Policy A provides liability coverage to Fred's Grocery up to $500,000. Policy B provides coverage for the same risks up to $1.5 million. Both policies pay on a pro rata basis. If Fred's Grocery is determined to have a legal liability of $400,000 to a claimant who was injured on the property, how much will Policy A pay?

100,000

D's neighbor H keeps a venomous snake as a pet. D's son is bitten after teasing the snake with a stick. After being sued by D's parents, H's insurance company claimed that the boy was acting negligently, and therefore, H was not liable. The boy's lawyer claimed that the pet was so dangerous that it did not relieve the owner of liability, an example of which principle?

Absolute liability

An unintended and unforeseen event from which a loss results is called which of the following?

Accident

All of the following are methods of loss valuation, except:

Blanket value

A rate request will be determined to be excessive if it:

Expenses are unreasonably high in relation to services rendered

Which state entity decides conflicts between insurance companies and policyholders?

State judicial system

All of the following are true of torts, except:

They must be committed intentionally

Which of the following best describes the reason to purchase an HO-8?

When insuring an older home that might create a moral hazard when insurance is written at replacement cost

Under the Basic Dwelling Form, when is damage caused by vandalism included as covered peril?

When the VMM Endorsement is added to the DP-1

Which of the following statements is correct concerning proof of loss requirements?

When the insurer receives a notice of claim, the insurer must provide the claimant forms for filing proof of loss within 15 days

A diligent effort for a residential structure with a dwelling replacement cost of $250,000 means rejections from how many authorized insurers are required?

3

All insurance carriers authorized in Florida must be audited by the Office of Financial Regulation once every __________.

3 years

All of the following statements about binders are true, except:

A binder specifies the premium amount

Coverage E of a Homeowners Policy would cover which of the following?

Bodily Injury to a guest caused by the insured's pet dog

Which coverage is written with a per occurrence limit?

Bodily injury and property damage

All of the following statements regarding liability losses are correct, except:

Bodily injury includes personal injury, physical injury, sickness, and disease

Physical damage to the insured auto that is not covered under collision, and is not otherwise excluded, would be covered under:

Comprehensive

Choose the false statement about the Contributory Negligence Law.

Contributory fault bars recovery in any other means

Which of the following defenses against negligence prevents recovery for injuries caused by a negligent party if the claimant was also negligent?

Contributory negligence

Under all the Dwelling Forms, the dwelling described in the Declarations is covered under:

Coverage A

Which of these statements is not true about Uninsured Motorist coverage?

Coverage is automatically provided for the damage to the insured vehicle

Which of the following statements is correct concerning coverage for a catastrophic ground cover collapse?

Every insurer authorized to transact property insurance in Florida must provide coverage for a catastrophic ground cover collapse

What is the name for a type of policy that doesn't pay benefits until the limits of the primary policy has been exhausted?

Excess policy

Which of the following is true about an aggregate limit?

It applies to losses from all occurrences within a specified policy period

Which statement defines a peril?

It is the specific cause of loss

All of the following are true of automobile liability coverage, except:

It pays up to $500/day for loss of income by the insured

Choose the statement that is false about the FAIR plan.

It provides property coverage to both residential and farm dwellings

Which term describes the situation that occurs when two policies covering the same property contain different policy periods?

Nonconcurrency

Which of the following is the broad term for an accident that also includes a continuous and repeated exposure?

Occurrence

While driving in another state with higher coverage requirements, which of the following sections of the PAP automatically provides the required coverage?

Out of State Coverage

The voluntary surrender of a right is known as which of the following?

Waiver

An agent is best described as which of the following?

A producer who has a contract with an insurer to represent that insurer in the sale of its products

Which of the following is covered under a Personal Auto Policy?

A vehicle driven with permission by an unlicensed driver

Which of the following is incorrect about insurance company appointments?

An agent must be appointed for property and casualty insurance separately

Which of the following is an example of vicarious liability?

An employer's liability for the acts of an employee

If a fire burns the home and property of an insured, what must the insured provide?

An inventory of the damaged property

Under the Personal Auto Policy, when the insured and the insurer do not agree on the insured's legal right to recovery of damages or the amount recoverable by the insured, what system is used to resolve the disagreement?

Arbitration

The provision that the insured's interest in a property insurance policy may not be transferred to another person without the consent of the insurance company, is called:

Assignment

Which of the following is not a duty of the Florida Surplus Lines Service Office?

Collect a service fee of up to 3.0% of the total gross premium of each surplus lines policy for the cost of operation of the service office

Which of the following describes the policy liability limits that may be applied to either bodily injury or property damage, in any combination?

Combined single limits

Which of the following is incorrect with regard to commissions and compensation?

Commissions may be shared with a person who is licensed and appointed in a different line of business

When damages are reduced in proportion to the degree of negligence, this is an example of:

Comparative Negligence

The Additional Coverages part of a property insurance policy provides:

Coverage that supplements the basic coverages in the insuring agreement which is automatically included without an additional premium

When firefighters extinguish a house fire with water, the water damage is considered a(n):

Direct loss

Under the Other Insurance condition, when two property policies cover the same property, how is a loss apportioned?

Each policy will share proportionately according to the total insurance

A homeowner agent may share a commission or any valuable consideration with anyone who:

Has an appointment and license to sell homeowner insurance

When filing a claim, the insured is required to do all of the following, except:

Hire an appraiser

Which of the following is FALSE about a claim payment for a Part D under Personal Auto?

If the insurer returns a stolen car to the insured, it doesn't have to pay claims for vehicle damage

Which of the following is correct regarding Other Insurance under Part A of the Personal Auto Policy?

If there is other liability coverage applicable to the insured auto, the policy will pay the proportion that the limit of liability bears to the total of all limits

When an individual faces the risk of economic loss in the event of property damage, this indicates which of the following?

Insurable interest

Which of the following definitions is correct?

Insurers are persons engaged as indemnitors, sureties, or contractors in the business of entering into contracts of insurance

For a claim to be paid, insurable interest for a property or casualty contract must exist at the time of:

Loss

Bodily Injury may include which of the following?

Loss of earnings

Choose the physical damage claim that would be covered under the Personal Auto Policy.

Malicious mischief to the tires

Which of the following is not a Supplementary Payment under Part A of the Personal Auto Policy?

Medical payments for an occupant of an insured vehicle

The person specifically designated in the policy as the person with whom the contract of insurance has been made is considered to be the:

Named insured

Which term describes coverage that applies only to loss by the perils stated in a policy?

Named peril

Q runs a stop sign causing an oncoming vehicle to swerve and hit a tree. Q is guilty of:

Negligence

Liability coverage under the PAP will cover which of the following?

Non-owned golf cart

The maximum amount that a coverage will pay for loss to any one injured party regardless of overall policy limits, is known as the:

Per person limit

A state requiring that the Commissioner agree that a company's rates are appropriate before they are made effective uses which type of rating approval?

Prior approval

Which of the following is not covered under Section II of the Homeowners Policy?

Property of the insured

The Division of Financial Services also has the power to do the following, except:

Regulate the state Medicaid program

An employee, whose duties are related to the maintenance of the residence premises, is defined as which of the following under Section II of the Homeowners Policy?

Residence employee

A hazard is best defined as:

Something that increases the chance of a loss

Which of the following handles unclaimed property?

The Department of Commerce Division of Unclaimed Funds

Which of the following is not true about an insurance policy?

The Insuring Agreement includes the name of the insured

Which of the following is true about binders?

The amount of insurance is stated in a binder

All of the following statements regarding coinsurance are true, except:

The coinsurance clause increases the policy's deductible amount

Under Florida law, how is the deductible determined when there are hurricane losses on multiple policies issued by the same insurer within a calendar year?

The deductible will be the highest amount stated in any one of the policies

Short-rate cancellation occurs when:

The insured cancels the policy mid-term

All of the following are true regarding the structure of a property policy, except:

The insured's duties in case of loss are found in the Insuring Agreement

Which of the following is true about the right of salvage?

The insurer has the right to take possession of damaged property after payment of a loss

Which of the following statements correctly describes a Guaranteed Renewable health insurance policy?

The insurer must renew the policy to a stated age, but may increase the premium in the underwriting class

Choose the limit of benefits that is incorrect.

The minimum financial responsibility limits of liability for automobile insurance in Florida for the owner of a motor vehicle are 15/30/10

Which statement regarding liability coverage and limits is false?

The per occurrence limit is the maximum amount recoverable during the policy period

The Reasonable Expectations Doctrine states that:

The reasonable expectations of policyowners will be honored even if the strict terms of the policy do not support these expectations

Which of the following statements is NOT correct with respect to premium financing?

The service charge allowed for a premium finance company is the same as the service charge allowed for an agent

Policyholder G wants her PAP to insure her sedan, primarily used for sales calls, her husband's SUV for car-pooling, the station wagon that their daughter uses to drive to school, and the van their son uses part-time to deliver dry-cleaning. Which of the following cars will G's agent tell her is not eligible?

The van

All of the following are true of liability policies, except:

They will cover damage to the insured's own property

Which of the following is NOT a purpose of licensing?

To authorize the agent to insure risks

When the insurance company and insured cannot agree upon the amount of the loss, the person selected to help the two hired appraisers is called a(n):

Umpire

Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following?

Unfair discrimination

In the event of the total loss of a building, the insurer's liability under the policy if caused by a covered peril will be the amount of money for which the property was insured. This describes which of the following?

Valued Policy Law

Statements in the application that are guaranteed true, but later found to be false at the time of application, may result in which of the following?

Voidance of the contract

Which of the following is not an example of a pure risk?

Wall Street's decline in the stock market

Which of the following perils would be covered under a Dwelling policy?

Water discharged by a plumbing failure

All of the following are covered perils under the Extended Coverage Endorsement to the DP-1, except:

Weight of ice, snow, or sleet

Which of the following constitutes the acceptance of an offer?

When an insurer issues a binder