Exam Questions 2-20 Units 1-17

Shelby was injured in an auto accident and has $90,000 in injuries and has a $1,000 #14692 PIP deductible. How much will Shelby receive as a claims payout from her insurance company?

$10,000 Shelby only receives $10,000 ($90,000 injuries - $1,000 deductible = $89,000 X 80% = $71,200 available for paymentbut the maximum PIP benefit is $10,000)

Herbert was permanently injured in an auto accident caused by the negligence #14675 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?

$140,000 Herbert will receive $140,000 under his Uninsured Motorists coverage ($200,000 of injuries - $10,000 PIP recovery less the $50,000 of Bodily Injury coverage from John's policy).

Kevin has four vehicles and he insures all of them with $10,000 per person and #14686 $20,000 per occurrence of "stacked" Uninsured Motorists Bodily Injury. Kevin was involved in an auto accident with a hit and run driver (the 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?

$40,000

Brenda has a PIP claim with $8,000 in injuries and a $0 PIP deductible. #14691 How much will Brenda receive as a claims payment from her insurance company?

$6,400 $6,400 payout to Brenda ($8,000 injuries - $0 deductible = $8,000 X 80%)

The "additional coverages" section of the Homeowners Insurance Policy provides #14714 up to $_____ coverage for property damage to property of others caused by the insured irrespective of legal liability

1,000

In the Homeowners Insurance Policy, what is the "specific limits" listed in the policy #14711 for the following classes of personal property: securities; watercraft and related equipment; trailers; theft of jewelry, watches, furs and precious stones; electronic apparatus in a motorized vehicle; and electronics used primary for business purposes while away from the residence premises?

1,500

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?

10% In a pure comparative negligence venue, like Florida, you can always collect the portion of your damages that you were notnegligent in or for. In this case the first operator WAS NOT responsible for 10% of the loss and therefore can collect from the other party 10% of their damages.

Collision Coverage and Other Than Collision Coverage for a "newly acquired #14678 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 Declarations.

14 Collision Coverage and Other Than 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 14 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 Declarations.

An applicant for the 2-20 General Lines Agent License must show that the application is at least ____ years of age.

18 An applicant for the 2-20 General Lines Agent License must show that the application is at least eighteen (18) years of age.

Which license is required to operate retail Property & Casualty Insurance Agency?

2-20 General Lines Agent License The 2-20 General Lines Agent License is required to operate a retail Property & Casualty Insurance Agency.

Medical Payments are payments (without regard to fault or legal liabilities) #14682 for necessary medical and funeral expenses rendered within ______ years from the date of accident to an "insured".

3

In the Personal Articles Floater (PAF) policy newly acquired jewelry, furs, #14708 and cameras are covered for:

30 days automatic coverage for same class of property up to 25% of the coverage limit but no more than $10,000

Insurance companies are required to provide _____ day's notice #14647 of either policy Renewal or Non-Renewal.

45 Insurance company are required to provide 45 day's notice of either policy renewal or non-renewal.

In the Homeowners Insurance Policy "debris removal and reasonable repairs" #14705 after a loss are covered up to ___% of Coverage A.

5

The Vandalism endorsement in the DP-1 policy does not provide any coverage if #14701the building was vacant for ___ or more consecutive days immediately preceding a loss. A)30B)60C)90D)180

60

The medical benefits paid under Personal Injury Protection are up to ____% #14694 of reasonable expenses for necessary medical services

80

No-Fault requirements for non-residents who are not required to register their #14689vehicles in Florida ARE subject to the No-Fault law if they have a motor vehiclephysically present in Florida for more than ___ of the preceding 365 days.

90 days

All of the following are true regarding "contracts of adhesion" EXCEPT #14645which of the follow? 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 Feedback:Insurance contracts are considered "contracts of adhesion"; contracts of adhesion arethose were one party drafts the language of the contact and the other party must takeor leave the contract as it is written. In most cases the parties are of unequal bargainingpower AND in most cases on party (the drafting party) is construed to have more expertiseregarding the subject matter. As a result, the courts resolve ambiguities against thedrafting party (the insurance company) and in favor of the non-drafting party (the insured).

The law requires an operator of a motor vehicle involved in an accident #14680(one involving bodily injury or property damage rendering a vehicle inoperable) OR convicted of certain traffic offenses to respond for such damages and showproof 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 Satisfaction of the Financial Responsibility Law include any one of the following: 10/20/10 auto liability limits at the time of the occurrence; or being a qualified self-insurer for 10/20/10 limits; or posting a cash bond that guarantees responsibility to 10/20/10 limits.

The Broad Form DP-2 policy includes all of the DP-1 coverages and adds which of the following perils (choose as many as apply). A)falling objects B)weight of ice, snow or sleet C)volcanic eruption D)flooding E)nuclear F)accidental discharge or overflow of water

A)falling objects B)weight of ice, snow or sleet C)volcanic eruption F)accidental discharge or overflow of water

If financial responsibility did not exist at the time of an accident, two things #14679 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 C)the owner and operator must provide SR-22 certification

Personal Liability coverage defines an insured as which of the following? #14699 (select all that apply) A)the named insured B)residing relatives of the named insured C)anyone legally responsible for animals or watercraft owned by the named insured D)any person under 21 in the care of a named insured or spouse

ALL

The Garage Policy's Garage Liability EXCLUDES: A)Watercraft and aircraft B)Defective workmanship C)Product recall D)All of the above

All the Above The Garage Policy's Garage Liability excludes: (a) watercraft and aircraft, (b) defective workmanship, (c) loss of use of property related to delay, and (d) product recall.

The "policy territory" for the Personal Auto Policy includes all EXCEPT which of the following? #14688 A)U.S., its territories or possessions B)Puerto Rico C)Canada D)Bahamas

Bahamas The PAP section "Policy Period and Territory" states that coverage applies only to accidents and losses that occur during the policy period and within the U.S. (including territories or possessions), Puerto Rico, and Canada.

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.

Both Statement One and Statement Two are correct Risk is the chance of financial loss AND Speculative Risk is the chance of loss or gain.

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 in not required in a property insurance policy

D Insurable interest is required in property and liability insurance. Insurable interest is the economic interest in propertyand/or the extent of potential legal liability of an insured.

The Uninsured Motorists (UM) law requires that every policy that provides primary Liability #14683coverage 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(multiple options are available to the insured). 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 of the above are options for the insured

D)all of the above are options for the insured

In the Dwelling Fire DP-1 policy form, "other coverages" ____ increase the limits #14700 of insurance for each stated coverage.

Do not

True or False? An applicant for the 2-20 General Lines Agent License can seek the license for the purpose of writing "controlled business".

False An applicant must not be seeking to obtain the 2-20 General Lines Agent License for the purpose of writing "controlled business"; this is specifically excluded.

True or False? Specified Causes of Loss provides the insured broader coverage than Comprehensive coverage in the BAP.

False Comprehensive coverage provides the insured broader coverage than Specified Causes of Loss coverage in the BAP.

An Automobile Dealer's Garage policy will compensate the dealer for the loss and/or damage to their inventory including profits.

False Profits are excluded under the Garage policy for losses incurred by dealers.

True or False? Requiring "Insurable Interest" in a Property and Casualty policy upholds the principal of adhesion.

False Requiring Insurable Interest in a Property and Casualty policy and claim upholds the principal of indemnity.

True or False. The BAP includes $30 per day/$900 maximum Transportation Expense.

False The BAP includes $20 per day/$600 maximum Transportation Expense.

Symbol 31 showing Specified Causes of Loss would cover fire damaged to an insured's tow truck.

False The Garage policy utilizes Symbol 31 to cover the Physical Damage to a Dealers Lot or to cover vehicles for sale for non-dealers.

Liability insurance means any insurance where payment by the insurance company will be paid on behalf of the insured to another; based upon the insured's ____________ to the payee/claimant.

Liability Liability insurance" means payment will be on behalf of the insured to another, based upon the insured's liability to the recipient.

Underwriting radius of operation includes all BUT which of the following? A)Local = within 50 miles B)Local = within 25 miles C)Intermediate = 50 to 200 miles D)Long distance = over 200 miles

Local = within 25 miles Underwriting radius of operations include: Local = within 50 miles; Intermediate = 50 to 200 miles; and Long distance = over 200 miles.

The BAP policy includes all BUT which of the following "usage" categories: A)Retail B)Long-Hauler C)Commercial D)Service

Long-Hauler Underwriting the BAP policy includes the following "usage" categories: retail, service, and commercial.

Liability in the BAP is extended to all BUT which of the following: A)Non-owned autos on a primary basis B)Trailers with a load capacity at or under 2,000 pounds C)"Mobile equipment" while it is being carried or towed by a covered auto D)Any temporary substitute auto

Non-owned autos on a primary basis Liability coverage is extended to: (a) trailers with a load capacity under 2,000 pounds or less;(b) "mobile equipment" while it is being carried or towed by a covered auto; (c) and any temporary substitute auto.

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

Only Statement One is true Binders can be oral or in writing AND binders are issued PRIOR to the issuance of a policy (not after the policy issuance).

Straight deductibles specify the deduction of a flat amount from a loss, regardless of the ______ of the loss.

Size Straight deductibles specify the deduction of a flat amount from a loss payment, regardless of the size of the loss.

In the Business Auto Policy (BAP) Symbol 7 covers:

Specifically Described Autos Remember, Symbol 7 covers Specifically Described Autos.

The insured has had a $60,000 loss and it has been discovered the 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?

The first company will pay $20,000 and the second company will pay $40,000 Pro-rata shares requires each company to pay a portion of the total loss that is a based upon the company's proportionto all available limits. The first company has a proportion of $1,000,000/$3,000,000 which is 1/3 of the total loss.The second company has a proportion of $2,000,000/$3,000,000 which is 2/3 of the total loss.

True of False? Medical Payments coverage is primary, with respect to other available medical #14685 payments coverage, when occupying owned automobiles, and excess when occupying non-owned autos

True

True or False? The Florida Statutes require any policy with the RCV provision #14707in it not hold-back for depreciation not withstanding the repair or replacement of damaged property.

True

As regards PIP benefits to the named insured's residing relatives for accidents #14676 that occur outside of the state of Florida; the residing relative is covered only when the relative is occupying the named insured's "motor vehicle".

True As regards PIP benefits to the named insured's residing relatives for injuries sustained the following apply:If the accident occurs in Florida, while occupying any defined motor vehicle, OR if struck by a defined motor vehicle while not occupying any self-propelled vehicle; and If the accident occurs outside Florida, the named insured's benefits apply to the relative only when the relative is occupying the named insured's "motor vehicle".

True or False? Symbol 1 of the BAP provides the broadest coverage for Liability.

True It is true, Symbol 1 covers "Any Auto"; the broadest application of Liability coverage in the BAP; this means the policy covers any auto,whether owned by the insured, hired by the insured, or neither owned nor hired by the insured.

In the BAP damage from a falling object or missile to an insured vehicle is treated under Comprehensive coverage.

True In the BAP damage from a falling object or missile to an insured vehicle is treated under Comprehensive coverage.

True or False. In the Business Auto Policy PIP, UM, and Medical Payments must be added by endorsement.

True In the Business Auto Policy PIP, UM, and Medical Payments must be added by endorsement.

True or False? If an applicant fails to present a valid form of identification at the time of taking the 2-20 General Lines Agent exam that failure is considered a missed appointment and requires a new application and fee to the Department of Financial Services.

True It is True. An applicant who fails to present a valid form of identification at the time of taking the 2-20 General Lines Agent exam isconsidered to have missed the appointment and requires a new application and fee to the Department of Financial Services.

True or False? Collision covers the loss for upset or impact with another vehicle or object.

True, Collision covers the loss of an upset or impact with another vehicle or object.

True or False? As regards PIP benefits to the named insured, the insured is covered under their own PIP coverage if the insured is occupying his or her insured motor vehicle OR a vehicle owned by a resident relative, if that vehicle is insured for Personal Injury Protection coverage.

True, the named insured is covered: if the accident occurs in Florida, the named insured is covered while occupying any defined motor vehicle, or if struck by a defined motor vehicle while not occupying any self-propelled vehicle (i.e. as a pedestrian); and if the accident outside of Florida, the named insured is covered while occupying his or her insured motor vehicle or a vehicle owned by a resident relative, if that vehicle is insured for Personal Injury Protection coverage.

__________ is by and large when a property is without occupant or contents #14654 (entirely and materially empty).

Vacancy Vacancy is by and large when a property is without occupant or contents (entirely and materially empty).

All of the following are "general exclusions" in the Homeowners Insurance #14706 Policy EXCEPT?

Vandalism

Section II Liability of the Garage Policy does not apply to: A)Negligence B)Employee injuries C)Both A & B D)Neither A or B

Wromg Section II Liability of the Garage Policy does not apply to employee injuries.

Josephine's Garage has replaced all four tires on a customer's truck. The truck's rear right wheel flew off when the customer left the garage striking a pedestrian. How will the Garage Policy respond?

Wrong Section II provides liability coverage (less a $100 deductible from property damage as a result of the insured's work) for garage operations.

Josephine's Garage is replacing all four tires on a customer's truck. The customer has tripped over an air hose in garage parking lot and broken his nose. How will the Garage Policy respond?

Wrong Section II provides liability coverage with no deductible for liability claims resulting from garage operations.

Your insured has a Garage Policy and wants to know if Section II Liability provides coverage for damage to property the insured owns...

Wrong You advise your client that no liability can result from an act by the insured to an insured's own property (i.e. they can't be liable to themselves) and therefore no coverage exist.

In Section III of the BAP, Specified Causes of Loss is:

Wrong In Section III of the BAP, Specified Causes of Loss is more limited in coverage than Comprehensive coverage.

In the BAP Comprehensive covered perils include: A)Wear and Tear B)Inherent Vice C)Both A & B D)Neither A or B

Wrong Read Section 5.2 of the Study Manual for a complete review.

The BAP's Named Individuals Broadened PIP:

Wrong The BAP's Named Individuals Broadened PIP endorses named parties to receive the same treatment as named insureds for PIP coverage.

Under the BAP's Section II Liability who is defined as an insured?

Wrong Under the BAP's Section II Liability an insured is defined as (1) named insured for any covered auto;(2) permissive users of covered autos owned, hired or borrowed by the named insured; and (3) anyone liable for the conduct of an insured in (1) or (2).

Radical Radiators, your Garage policy insured has suffered a theft loss to a Symbol 27 vehicle. They have Specified Causes of Loss coverage on the vehicle. Is this loss covered?

Yes, theft is a specified cause of loss Specified Causes of Loss include: fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief/vandalism, and burning, collision or derailment of a conveyance and Symbol 27 would cover specified autos on the policy for Physical Damage coverages.

Mrs. Murser, your BAP insured has suffered a theft loss to two vehicles in her fleet. She has Specified Causes of Loss coverage on the vehicles. Are these losses covered?

Yes, theft is a specified cause of loss The Specified Causes of Loss include: fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief/vandalism, and burning, collision or derailment of a conveyance.

Your insured has a BAP and wants to know if Section II Liability provides coverage for damage to property the insured owns... A)You advise your client that this type of exposure is covered B)You advise your client that no liability can result from an act by the insured to an insured's own property (i.e. they can't be liable to themselves) and therefore no coverage exist C)You advise your client that the policy does not address an insured being liable to themselves in any manner D)Each of these are correct

You advise your client that no liability can result from an act by the insured to an insured's own property (i.e. they can't be liable to themselves) and therefore no coverage exist You advise your client that no liability can result from an act by the insured to an insured's own property (i.e. they can't be liable to themselves) and therefore no coverage exist.

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 of the above

all of the above

Which, if any, of the following are non-compliance penalties for not complying #14690 with the Florida No-Fault Law? A)no "immunity" from legal liabilities which are granted to those who do 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 of the above

all of the above The owner of a motor vehicle is subject to three penalties for non-compliance with the compulsory insurance requirements: no "immunities" from legal liabilities which are granted to those who do comply; personal liable for payment of PIP benefits to those entitled to receive such benefits; and suspension of driver's license and vehicle registration.

In the Dwelling Fire Policy Coverage D - Fair Rental Value protects the insured #14712 for loss of fair rent IF: the dwelling is damaged by a covered peril B)the dwelling is uninhabitable C)payments made compensate the insured only for the necessary period of restoration D)all of the above

all the above

In the Personal Auto Policy (PAP), payment for legal liability on behalf of the #14681 insured is for _______________ and ________________ to others

bodily injury and property damage

Which, if any, of the following statements are true regarding Coverage A- Dwelling coverage? #14697 Statement One: Coverage A covers the dwelling and structures attached to it Statement Two: Coverage A covers construction materials and supplies on or adjacent to the residence premises

both Statement One and Statement Two are correct

All of the following meet the definition of Flood or Flooding EXCEPT: #14704 A)overflow of inland or tidal waters B)unusual and rapid accumulation of runoff of surface waters from any source C)broken water pipe D)mudflow

broken water pipe

In the Personal Articles Floater (PAF) policy the "pairs, sets and parts provision #14709 reserves the insurance companies right to:

elect to repair or replace or to restore the pair or set to original value, or to pay the difference between ACV before and after the lossD)

An insurance policy can be changed by adding an ______________ to a policy.

endorsement An endorsement is a modification to an original policy which changes it in some way. The correct answer is that an insurance policy can be changed by adding an endorsement to a policy.

All of the following are "not eligible" as a named insured for a Homeowners policy EXCEPT:

individual owner occupant of a 1-4 family dwelling

The Personal Articles Floater (PAF) insures specific classes of property; #14702 all but which of the following are true statements about the PAF.

inherent vice is an included peril

The NFIP flood insurance _____ available in any community that HAS NOT #14698 adopted and enforced federal floodplain regulations.

is not

A ________ in insurance terms is the reduction and/or destruction in use, #14641 value, access, custody, or function of or in property.

loss A "loss" in insurance terms is the reduction and/or destruction in use, value, access, custody, or function of or in property.

PIP exceptions also known as "thresholds" permit the recovery of non-economic #14677loss (i.e. action for pain, suffering, mental anguish and inconvenience) if the injuryresults 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

loss of work longer than 21 days

The Dwelling Fire DP-3 covers building structures on a ____________ perils basis.

open

All of the following are true regarding the insuring agreement in liability #14642insurance 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

payments are made directly to the insured or the insured's family members Liability insurance policies make payments to third parties which have been injured by the insured and/or their property has been damaged by the insured. Payments are made directly by the insurer to the third party.

All of the following are considered "insured locations" in the Homeowners #14703Insurance Policy EXCEPT: A)residence premises described in the Declarations B)insured's land where a one to four family dwelling is being constructed as a residence C)properties owned by residing relatives of the named insured D)cemetery plots or burial vaults owned by the insured

properties owned by residing relatives of the named insured

Florida law deems information provided by the insured in an insurance application to be _____________ and not ______________.

representations and not warranties

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.

subrogated Subrogation is the transfer to an insurance company of an insured's right to collect damages from a third responsible partyafter the insurance company has paid the insured and become "subrogated" to the insured's right's of recovery against the responsible party.

This fundamental doctrine in property insurance holds when there is an unbroken #14644 connection between an occurrence and damage that grow out of the occurrence.

the doctrine of proximate causation The fundamental doctrine in property insurance that holds when there is an unbroken connection between anoccurrence and damage that grows out ot he occurrence is known as the doctrine of proximate cause (or causation).

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?

the man stepping into oncoming traffic The proximate cause in any event is the primary and effective cause that triggers the event(s) resulting in injury or damages. In this case the negligence of the man stepping into oncoming traffic when it was unsafe to do so was the sole event which triggered the unbroken chain of events leading to the damage to the car and both food trucks.

Insurance contracts are personal contracts were the focus is on?

the person or persons being insured Insurance contracts are "personal contracts" where the focus is on the person or persons, NOT the property or operations.

Coverage D — "Loss of Use" in the Homeowners policy (HO-3) covers increases over #14710 normal living costs if damage from a covered peril makes the residence _____________.

uninhabitable

Insurance policies require all changes to the policy to be made by ___________ request to the insurance company

writing All policies provide that any changes to the policy must be made by the insurer, in writing.

Section III Physical Damage in the BAP covers: A)Collision B)Comprehensive or Specified Perils C)Both A & B D)Neither A or B

wrong In Section III of the BAP, Specified Causes of Loss is more limited in coverage than Comprehensive coverage.