Prelicensing exam

Ada borrows a friend's camping trailer. She tows it behind her car during a road trip until the trailer is damaged in a crash on the highway. Ada's personal auto policy (PAP) includes collision coverage on the trailer as a nonowned auto, subject to what limit? the fair market value of Ada's car $2,500 $1,000 $1,500

$1500

What is the maximum fine an individual pay for intentionally falsifying information on a proof of loss form? $1,000 $5,000 $100 $15,000

$5,000

Kerry insures three vehicles under his policy. All three vehicles have uninsured motorist coverage of $100,000/$300,000. Kerry pays for stacked UM coverage. In the event of an uninsured motorist claim, what limits are available to Kerry? $300,000/$900,000 The limits applicable to the vehicle in which he was injured. $200/000/$600,000 $100,000/$300,000

300,000/900,000

BBX Insurers terminated Henry's appointment as its life insurance agent on December 1. How long will Henry remain eligible to be appointed as a life insurance agent by another insurer? 48 months 36 months 12 months 24 months

48 months

If an auto insurance suspects fraud in a claim investigation, how many additional days can the insurer have to complete the investigation? 45 days 60 days 30 days 15 days

60 days

Which one of the following losses would most likely be excluded by one of the maintenance or wear-and-tear exclusions in a property insurance policy?

Bees build a nest under the siding.

Before buying a motorcycle, Luciano has the miscellaneous type vehicle endorsement added to his personal auto policy (PAP), but he excludes the passenger hazard. How does this affect his coverage? There is no coverage for other's property on the motorcycle. Bodily injury to a passenger is covered to meet state requirements. Bodily injury to a passenger is excluded only when the passenger is in a sidecar. Bodily injury to a passenger is excluded.

Bodily injury to a passenger is excluded.

Evidence indicates that Zeta Construction's negligence caused a stage collapse that resulted in the death of Bonita, a famous performer. Zeta's CGL policy with Alpha Insurance Company has a $300,000 limit that applies to the multimillion dollar claim of Bonita's estate. What must Alpha do under these circumstances? Compel Zeta and Bonita's estate to resolve the claim through arbitration. Pay $300,000 to Bonita's estate to immediately settle the claim. Seek a declaratory judgment to determine whether it must defend Zeta. Defend Zeta until Alpha has paid $300,000 in judgments or settlements.

Defend Zeta until Alpha has paid $300,000 in judgments or settlements.

Which of the following must HMO members use to receive covered care? HMO's network of providers and caregivers any licensed health care practitioner or caregiver providers and caregivers selected by the state HMO association the nearest provider or caregiver

HMO's network of providers and caregivers

Lucinda is selling her country home and is buying a condominium unit in the city. She had an HO 3 policy for her home and wants comparable coverage for her condo. Which homeowners insurance policy form is best suited for her needs? HO 5 HO 4 HO 6 HO 3

HO 6

Under the Terrorism Risk Insurance Act, all of the following lines of insurance are covered EXCEPT: homeowners and dwelling insurance workers compensation insurance commercial liability insurance commercial property insurance

Homeowners

The standard mortgage (mortgagee) clause in a property insurance policy covering real property does which of the following? It makes the lender the owner of the property if the borrower does not maintain insurance on the mortgaged property. It requires the lender to purchase property insurance on the mortgaged property. It requires the lender to pay off the mortgage should a loss occur on the mortgaged property. It ensures that the mortgage lender is paid if mortgaged property suffers a loss.

It ensures that the mortgage lender is paid if mortgaged property suffers a loss.

XYZ's workers compensation policy lists the insured as "Les Smith and Hiram Jones, a partnership doing business as XYZ." This firm is a new venture for Les and Hiram, both of whom also operate other businesses. For whom does XYZ's workers compensation policy provide coverage? Les and Hiram, but only for injuries to XYZ's employees Les and Hiram, for injuries to employees of any of their ventures Les only, because he is the first named insured Les and Hiram only, but not XYZ's employees

Les and Hiram, but only for injuries to XYZ's employees

White Insurance Company is a domestic insurer in Florida. By what date must it file an annual statement regarding its financial condition each year? March 1 February 1 May 1 January 1

March 1

Sasha, Kendall, Adam, and Julio are licensed agents in Florida. The Department of Financial Services would NOT be able to suspend or revoke which agent's license for engaging in the following acts? Julio, who used insurance premiums he collected to renovate his business office Adam, who offered season football tickets to prospects who purchased policies Kendall, who intentionally violated an order issued by the Office of Insurance Regulation Sasha, who sold insurance policies to family members and friends this year

Sasha, who sold insurance policies to family members and friends this year

Carol owns a sports car and has received numerous traffic citations for exceeding the speed limit. She submits applications to buy auto insurance from several auto insurance companies, but none has accepted her application because: The applicant is demonstrating adverse selection. The law of large numbers prohibits it. It is a speculative risk. The car is exposed to specified perils.

The applicant is demonstrating adverse selection.

While shopping for fruit, Walter was injured when he slipped on a banana peel that Geraldine had carelessly allowed to remain on the floor of her store. Walter sued Geraldine to recover damages. In Walter's civil action against Geraldine: Geraldine is the defendant and Geraldine's insurance company is the plaintiff. Walter is the plaintiff and Geraldine's insurance company is the defendant. Walter is the plaintiff and Geraldine is the defendant. Geraldine is the plaintiff and Walter is the defendant.

Walter is the plaintiff and Geraldine is the defendant

Ramiro's homeowners insurance policy refers to an "insured location." Which qualifies as an insured location? the parking space that Ramiro rents in the garage near his office the room in a nursing home where Ramiro's mother lives Ramiro's office in a downtown building owned by his employer a hotel room that Ramiro occupies while on a vacation

a hotel

"Replacement cost minus physical depreciation" describes which type of loss valuation method? functional replacement cost replacement cost market value actual cash value

actual cash value

A homeowner who owns a vicious dog may be more inclined to purchase liability insurance than one who doesn't own such an animal. What is this an example of? risk avoidance adverse selection an indirect loss a speculative risk

adverse selection

As compared with fire insurance policies, inland marine floaters typically provide coverage: against more causes of loss against specifically defined perils only with inadequate limits at fewer locations

against more causes of loss

The lessees of safe deposit boxes endorsement to a commercial crime policy is most likely to be used to cover: a gym that has lockers where patrons keep their street clothes and valuables hotel employees an insured's property that is kept in a bank safe deposit box a bank against claims by customers who rent safe deposit boxes

an insured's property that is kept in a bank safe deposit box

Although Todd and his insurer agree that his property claim is covered, they cannot agree on the damaged property's value. What clause in Todd's property insurance policy provides a method of resolving this dispute? appraisal subrogation arbitration other insurance

appraisal

Bill's children have grown up and moved away, but the tree house that he built for them now draws other neighborhood children despite his handmade "No Trespassing" sign. If a neighbor's child is injured by falling from the tree house, Bill might be held liable for the child's injuries under what legal doctrine or principle? attractive nuisance contributory negligence absolute liability vicarious liability

attractive nuisance

Eliza's car is insured with a personal auto policy that includes liability, collision, and other-than-collision coverages. She buys a pickup truck. What coverage, if any, will the PAP provide for the truck? none because the newly acquired vehicle is a truck automatic liability coverage if she reports the newly acquired vehicle to the insurer within 14 days. automatic liability coverage for the remainder of the policy period automatic collision coverage if she reports the newly acquired vehicle to the insurer within 30 days

automatic liability coverage if she reports the newly acquired vehicle to the insurer within 14 days.

Evangeline bought her home with a 20 percent down payment and a mortgage from Trevor Bank. She had not yet paid off the mortgage when the home was badly damaged in an explosion. Who had an insurable interest in the home at the time of the loss? Trevor Bank only Evangeline only both Evangeline and Trevor Bank nobody

both evangeline and trevor bank

A fire damages Millard's house. Because Coverage A of his homeowners policy covers dwelling property at replacement cost, Millard wants all of the damaged property to be treated as part of the dwelling. Which one of the following damaged items is considered part of the dwelling? central air-conditioning system power lawn mower Oriental rug in Millard's family room unattached tool shed

central air-conditioning system

ABC Insurance Company wants to become licensed in Florida to sell insurance products. Which of the following must it receive in order to transact insurance? certificate of licensure articles of incorporation certificate of appointment certificate of authority

certificate of authority

License and permit bonds, often required by a municipality or other public body, guarantee that the party seeking the license or permit will: pay a penal sum if the bond holder defaults in making timely payments fulfill certain court-imposed duties comply with applicable laws or regulations pay for all materials and labor used in the activity for which it is licensed

comply with applicable laws or regulations

What coverage automatically included in the DP 2 and DP 3 policies is NOT also provided by the DP 1 basic form policy? Coverage D-Fair Rental Value Coverage C-Personal Property Coverage B-Other Structures Coverage E-Additional Living Expense

coverage e

Lila, a self-employed accountant, requires emergency medical treatment after choking on a product of the Dulce Candy Company while in her office. A month later, she asks Dulce to pay her medical bills. Dulce's commercial general liability policy with medical payments coverage (Coverage C) will: cover a liability claim that is made within one year of the incident exclude coverage for an injury that occurs in the workplace cover any claim arising out of the use of Dulce's products exclude coverage for Lila's claim because the incident occurred away from Dulce's premises

exclude coverage for Lila's claim because the incident occurred away from Dulce's premises

Agents and insurers must maintain records of their insurance transactions for at least how long? three years one year two years five years

five years

What type of organization is a non-profit entity that operates on the lodge system, has no capital stock, and sells insurance mainly to its members? reciprocal insurer self-insurer fraternal benefit society mutual insurer

fraternal benefit society

Exclusions from coverage will NOT Encourage loss prevention Remove unnecessary coverage Eliminate or reduce overlapping coverage Increase the premium

increase the premium

Which of the following does NOT qualify as covered equipment under the equipment breakdown coverage form? electric motors vacuum tank computers laboratory beakers

laboratory beakers

Property insurance policies covering buildings and contents commonly exclude all the following causes of loss EXCEPT: mechanical breakdown lightning earth movement leakage or seepage

lightning

The swimming pool in the atrium of the Highland Court Apartment Building creates a humid environment that encourages mold growth. To limit exposure to mold-related claims, what kind of endorsement should be added to the building's CGL policy? limited fungi or bacteria coverage pollution liability exclusion limited pollution liability extension fungi or bacteria exclusion

limited fungi or bacteria coverage

Celia put her laptop computer in the overhead bin of an airplane, discovered it was missing when she got ready to depart the plane at the end of the flight, and concluded it had to have been stolen. This type of theft is called: burglary conversion mysterious disappearance robbery

mysterious dissapearance

Sarah's home is insured for $400,000 with a 5 percent hurricane deductible. A hurricane causes $20,000 damage to her home. How much, if anything, will her insurer pay for the loss? $19,000 Nothing $10,000 $19,600

nothing

Alex's Diner is insured by an unendorsed businessowners policy. The policy's declarations page specifies limits for the building coverage and for the business personal property coverage. What kind of perils coverage does Alex have? named perils coverage on the building but open perils coverage on personal property open perils coverage on the building but named perils coverage on personal property named perils coverage on both the building and personal property open perils coverage on both the building and personal property

open perils coverage on both the building and personal property

The business auto policy (BAP) may include all of the following EXCEPT: personal auto insurance business auto declarations business auto coverage form common policy conditions form

personal auto insurance

An automatic sprinkler system in a hotel building is a risk reduction measure because it: keeps fires from starting transfers responsibility for any fire to the company that installed the system reduces the amount of damage that a fire is likely to do completely eliminates the possibility of a fire

reduces

In insurance terms, the basic state of being subject to a possible loss is called: risk accident hazard peril

risk

After being attacked by a neighbor's dog, Rose was hospitalized and spent a month at home recovering from her injuries. In addition to paying for her pain and suffering, the neighbor's insurer was required to pay for her medical expenses and lost wages, which are considered: general damages punitive damages special damages indirect damages

special damages

In an auto policy that has split limits of 50/100/75, what does the "75" represent? the maximum amount that will be paid to any one injured person the maximum amount the insurer will pay for damage to other cars or property the maximum sum the insurer will pay to all injured persons the maximum sum the insurer will pay for injuries to other people and property damage to other cars or property

the maximum amount the insurer will pay for damage to other cars or property

Why do insurance policies use quotation marks with certain words and phrases? to show that these words and phrases are slang terms to recognize copyrighted material that was taken from another source to identify words and phrases that are defined in the policy to call attention to words and phrases that are especially important

to identify words and phrases that are defined in the policy

Which optional provision addresses premiums that the insured owes at the time of a claim? conformity with state statutes unpaid premium cancellation relation of earnings to insurance

unpaid premium