Personal Lines Exam Simulator

Chuck Jones and his wife Honey co-own a two family dwelling with Chuck's cousin Buford Jones. How should their Homeowners insurance be issued?

Write an HO-2, 3, 5 or 8 for one owner and an HO-4 for the other owner

With respect to Florida Statutes, "transacting insurance", includes all of the following except:

With respect to Florida Statutes, "transacting insurance", includes all of the following except:

The quality within an object that results in the object's tending to damage or destroy itself, is called:

Inherent vice

The organization which develops standardized versions of insurance contracts is known as:

Insurance Services Office

All of the following may appoint a customer representative EXCEPT:

An insurance company

A set of earrings is appraised at and insured for $10,000. One of the earrings was lost. The remaining earring was worth $3,000. Under the Inland Marine Pair and Set clause, how much will the policy pay?

$ 7,000

Jane was injured in an automobile accident by a driver who had no insurance. In addition to full PIP, Jane's policy includes $5,000 in Medical Payments Coverage and 10/20 Uninsured Motorists Coverage (UM). How much will she recover under her UM if her emergency medical bills are $15,000?

$0

The theft limit under the HO-8 form is:

$1,000

The basic limits for loss assessment in Homeowners Section I and Section II are:

$1,000 in each

Bill has a Homeowners policy. While out of town on business, a $4,000 computer is stolen from his hotel room. How will his policy respond?

$1,500

Mack has a business personal computer at home. A thief steals the computer, valued at $1,200. The retail cost of the software was $300, and the cost of rebuilding the data is $100. How much will the Homeowners policy pay?

$1,500

The minimum basic limits for Personal Liability are:

$100,000 Liability/$1,000 Medical Payments

What are the basic limits under Section II of a Homeowners Policy?

$100,000 per occurrence / $1,000 medical payments

An insured under an HO-3 has invited a client to play golf while they discuss a major sale which the insured hopes to make to the client. While making a practice swing, the insured breaks the client's leg. The client sues and is awarded a judgment of $75,000. Defense costs total $35,000. If the insured has Basic Limits on his HO-3 form, how much will the policy pay?

$110,000

Ginger has a Personal Auto Policy with basic Florida liability limits of 10/20/10. While driving across the country, she has an at-fault accident that results in $30,000 in property damage to 2 other drivers. If the minimum limits in the state where the accident took place are 25/50/25, how much will her policy pay?

$25,000

David has a Personal Auto Policy with a $250 deductible on Collision and a $100 deductible on Other Than Collision. When a thief finds the keys in the car door, he steals David's car. He loses control of the car and crashes into a tree causing $4,000 in damages to the car. If the value of the car is $15,000, how much will David's policy pay?

$3,900

Ari has a Dwelling Policy Broad Form with a Coverage A limit of $100,000. He incurs a covered building loss which has an actual cash value of $30,000 and a replacement cost of $40,000. If the value of his dwelling at the time of loss is $120,000, how much will he recover (ignoring any deductible)?

$40,000

The insured has a Homeowners Form 3 (HO-3) with the standard deductible. The Coverage A limit is $100,000. The fire department has to come into a rural area to put out a fire at the insured's home. Since the fire was outside of their district, they bill the insured $975. How much of this charge can the insured recover under his policy?:

$500

Bob has a DP-2. His Coverage A limit is $50,000. He has a separate garage that he values at $20,000. If the dwelling and the garage are both destroyed by a covered peril, how much will he recover?

$55,000

An insured has a television that originally cost $600. The television is destroyed by a covered peril. It is two years old and should have lasted ten (10) years. The cost to replace is $1,000. Coverage on an ACV basis will pay:

$800

General Lines Agents who hold a CLU or CPCU designation and have been licensed for 25 years must satisfy continuing education. How many hours are they required to complete?

10 hours

On a DP-1, DP-2, and DP-3, what amount of coverage is afforded to property off premises worldwide?

10% of the Coverage C limit

If all flooding in an area is confined to one building, the flood must inundate:

2 or more acres

Comprehensive Personal Liability covers those in the care, custody, or control of the insured if they are under:

21 years old

What is the maximum period of time for which an agent's license may be suspended?

24 months

Bob has a Personal Auto Policy with basic Florida liability limits of 10/20/10. While driving through another state, he has an accident. If the basic limits in that state are 25/50/25, what liability limits will he have for that accident?

25/50/25

Craig has a General Lines Agent license. He recently moved his office to a new shopping center. How long does he have to notify the Florida Department of Financial Services of his new address?

30 days

If an automobile insurance policy is cancelled, how long does the insurer have to return any unearned premium to the insured?

30 days

Jill has a Personal Auto Policy which includes 100/300 stacked Uninsured Motorists coverage. If she has three autos on her policy, what is her maximum Uninsured Motorists coverage?

300/900

For automobile insurance, how much advance notice is required if the insurer intends to non-renew the policy?

45 days

Shortly after Mary's auto policy renewed, her insurer notified her that it intended to cancel her policy because it had learned that her driver's license was suspended. How much advance notice is her insurer required to provide?

45 days

All of the following would be eligible for the Dwelling program EXCEPT:

5-6 family dwellings

An agent is in violation of the prohibition against "controlled business" when the commissions from insurance written on his/her own interests (or family or business entity owned by the agent or the agent's family) exceed:

50% of the commission income in 12 months

Policies issued through the Citizens Property Insurance Corporation may be replaced at any time during the policy period if coverage becomes available by an authorized insurer. How many days' notice is required to replace a policy?

60days

Under Florida statutes, a hurricane is said to begin when the National Hurricane Center of the National Weather Service issues a hurricane watch or warning. When is a hurricane said to end?

72 hours after the last watch or warning ends anywhere in the state

All of the following would be covered under Section II of a Homeowners Policy EXCEPT:

A 7-foot wave runner with a 50hp inboard motor owned by the insured

In order for an insurance company to transact business in the state of Florida (other than surplus lines) they must have:

A Certificate of Authority

The Department of Financial Services may issue a customer representative license to which of the following:

A non-resident who lives in a state that shares a common boundary with Florida

All of the following may be written under a single Flood Dwelling Policy except:

A shed

Under ERISA, a major goal was to allow which:

A single employer to fully self insure a health plan

Florida's Financial Responsibility law is triggered by all of the following EXCEPT:

A speeding ticket for exceeding the posted limit by 50 mph

All of the following are examples of departures from the principle of indemnity in property insurance EXCEPT:

Actual cash value

Which of the following coverages is automatically included in a DP-3, but not in a DP-1?

Additional Living Expenses

In a DP-1, which of the following coverages may be added by endorsement?

Additional living expenses

All of the following are prohibited as unfair methods of competition and unfair or deceptive acts or practices under Florida law except: (Sliding, Unlawful rebating, Twisting)

Advertising gifts under $25

All of the following employers are eligible for coverage in the Florida Workers Compensation Joint Underwriting Association EXCEPT:

An employer who owes back premiums

A Customer Representative is appointed by which of the following:

An insurance agency

The insurance principal which dictates that insureds are to be placed in the same financial position as they were in prior to a loss is known as:

Indemnity

Justin has properly insured his car, but his neighbor, Bart, has no insurance at all on his own car. One day, Justin loans his car to Bart, who has an at-fault accident injuring himself and the other driver. Which of the following is true:

Bart is not entitled to PIP benefits, but does have a limited tort liability exemption.

In order to sell insurance in Florida, one must do which of the following:

Be licensed by the State and be appointed by a company

After Rick loans her his car, Patty becomes involved in an at-fault accident. If both Rick and Patty have a Personal Auto Policy with Bodily Injury Liability Coverage, which of the following is true with respect to a Bodily Injury Liability claim?

Both policies will respond, but Rick's policy is primary and Patty's is excess.

By law, which peril must be covered by all property policies:

Catastrophic Ground Collapse

Which of the following is a mandatory endorsement to a Homeowners Policy?

Catastrophic Ground Collapse

In a Personal Auto Policy, Medical Payments coverage covers all of the following EXCEPT:

Claims in which a driver can collect under Workers Compensation

The situation in which an agent obtains a license for the purpose of writing insurance only on family members or business relationships is known as:

Controlled Business

What part of a Personal Auto Policy provides benefits to any loss payee on the policy?

Damage to Your Auto Section

The Florida Automobile Joint Underwriting Association writes automobile coverage for those insureds that cannot find coverage through the admitted market. Servicing carriers are used to facilitate this process. All of the following operations are performed by Servicing Carriers EXCEPT:

Distribution of profits to stockholders

An insurance company formed under the laws of the state of Florida is known as:

Domestic

PAP Part D - Damage To Your Auto exclusions apply primarily to:

Equipment

All of the following are responsibilities of the Department of Financial Services EXCEPT:

Establishing and periodically reviewing companies' rules and rates

With respect to Florida Statutes, "transacting insurance," includes all of the following except:

Filing correspondence

All of the following are residual markets in Florida EXCEPT:

Florida Excess & Surplus Lines Joint Underwriting Association

Under Florida statutes, under what circumstances may an insurer discontinue the coverage afforded by a binder without providing the insured with a notice of cancellation or non-renewal?

For all property types other than auto, no notice is needed unless the binder is for more than 60 days.

If an insured provides false statements on an insurance application, how long does the insurer have to discover any material misrepresentations and cancel the policy?

For misrepresentation, the insurer may cancel the policy at any time.

Under Florida law, for how long does an insurer have the right to cancel a new policy?

For the first 60 days after the policy is issued.

Bernie has a Personal Auto Policy that covers the car he owns. If he purchases an additional vehicle and NEVER reports the new car to his insurer, which of the following will be true 6 months from now?

He will still have all of his coverages except Collision and Other than Collision.

An insured has a Florida Personal Auto Policy with limits of 10/20/10. What happens if she drives to a state requiring higher limits.

Her policy increases to the higher limits.

If a Personal Auto Policy provides mandatory PIP coverage, the insurer may cancel for non-payment for which of the following reasons: I. Payment is made by a dishonored check. II. The insured did not pay an additional premium. III. The insured's payment is 3 days late. IV. The insured's payment is 5 days late.

I and II

Which of the following is not covered by No-Fault benefits: I. Insured in owned auto not covered by insurance policy II. One who intentionally injures self III. One injured committing felony IV. Operating auto without the owner's consent

I, II, III, IV

An insured's Automobile Medical Payments coverage:

Is primary in the owned auto and excess in the non-owned auto

For a personal auto policy, a cancellation notice must meet all of the following requirements EXCEPT:

It must indicate the amount of any unearned premium.

A car runs into a neighborhood association's recreation room. An association member is billed $1,750. How will his Homeowners policy respond?

It will pay $1,000.

An insured with Mechanical Breakdown insurance has a loss that results in the following expenses: Engine repair - $1,200, Towing - $75, Tune-up - $50. How will his policy respond?

It will pay $1,200.

An insured has personal property at two locations. The values at Location 1 are $100,000. Values at Location 2 are $300,000. If the insured has $400,000 blanket insurance, how will the policy respond to a covered loss of $137,000 at Location 1?

It will pay $137,000.

While driving a rental car, Richard hit a tree, causing $4,000 in damage to a rental car. The rental company charged him $30 a day for each of the 8 days it took to repair the car. If his Personal Auto Policy has a $500 deductible on Collision, a $250 deductible on Other Than Collision, and liability limits of 10/20/10, how will his policy respond? (Ignore the company's insurance).

It will pay $3,640.

Carla has a Personal Auto Policy with a $500 deductible on Collision and a $250 deductible on Other Than Collision. While driving through the forest, she swerves to avoid an oncoming car in her lane and hits a deer causing $8,400 in damages. How will her policy respond?

It will pay $8,150.

With respect to torts, those who comply with the Florida No-Fault Law receive which of the following:

Limited immunity from liability

All of the following coverages are available for commercial automobiles in the Florida Automobile Joint Underwriting Association EXCEPT:

Medical Payments Coverage

Intentionally caused losses come under which property insurance concept:

Moral Hazard

Under the Florida No-Fault Law, government vehicles used in mass transportation are exempt from the Law's security requirements if they are designed to carry how many people?

More than 5, excluding the driver

Which of the following is the PAP endorsement that provides Liability, Medical Payments, and Uninsured Motorist coverages for a named individual who does not own an automobile?

Named Nonowner Coverage

B&B Corporation owns a dwelling for entertaining clients. Is B&B eligible for Homeowners Insurance on this dwelling?

No, corporations are specifically ineligible

Betty and her next door neighbor, Sue, are each insured with PIP. While out of state in Betty's car, they are injured in an accident. How will their PIP coverages respond?

Only Betty's PIP coverage will respond.

An insured has an HO-3. If fire damages the association club house which results in a $700 assessment against the insured, her HO-3 will:

Pay $700

A 16-year old boy accidentally hits a neighbor in the head with a baseball bat. The boy's uncle, who had custody of him for the day, had a Homeowners policy. The uncle's liability coverage will:

Provide coverage, because the boy was under 21 and in the care, custody, and control of the insured

Under the Flood Program, the loss settlement that usually applies to one's principal residence is:

Replacement cost

The Office of Insurance Regulation oversees all of the following except:

Review of educational background of Officers and Directors of carriers

What is the term used in property and liability insurance to refer to the potential for economic loss?

Risk

The act of representing to a client that the law requires a particular ancillary coverage that is, in fact, not required by law is known as:

Sliding

A licensed customer representative may do all of the following functions EXCEPT:

Solicit new clients outside the office

In determining the rates for a Personal Auto Policy, the term used to refer to the location where the insured vehicle is garaged is:

Territory

On Monday, Ms. Baker buys a $100,000 policy to cover a building she owns with her husband. The next day, Mr. Baker, unaware of his wife's purchase, buys $200,000 in coverage for the same building. If the building sustains a $75,000 loss, how will the policies respond?

The $100,000 policy pays $25,000, and the $200,000 policy pays $50,000.

When is the owner of a motor vehicle required to show proof that he or she has PIP coverage?

Whenever the vehicle is registered or its registration is renewed

The insurer providing coverage under a Personal Auto Policy may cancel the policy for any reason except discrimination during which of the following time frames:

The first 60 days

Under an HO-3, an insured will receive full replacement cost coverage on a loss to the dwelling if:

The insured carries a limit equal to or greater than 80% of the replacement cost of the dwelling.

One of the underlying concepts of an insurance policy is that the policy should not allow an insured to make a profit from a covered loss. This concept is known as:

The principle of indemnity

Each of the following is a difference between Personal Liability and Section II Liability in HO's except:

There is no $1,000 Damage to Property of Others

Knowingly making any misleading representations or incomplete or fraudulent comparisons of any insurance policy with the intent of inducing a person to cancel any insurance policy or allow it to lapse is known as:

Twisting

All of the following are covered under Section II of the Homeowners policy EXCEPT:

Vacant land on which the insured is (or will be) raising cattle

The penalties for failure to comply with the Florida No-Fault law are all EXCEPT:

misdemeanor punishable by up to 30 days in jail