Final Exam

A hazard is a condition that introduces or increases the likelihood of loss from a peril. Which of the following is true regarding the concept of "hazard"? A)"physical hazards" are physical characteristics which increase the probability and severity of loss B)"moral hazard" is an unconscious mental attitude which increases the probability and severity of loss C)both A & B D)neither A or B

A)"physical hazards" are physical characteristics which increase the probability and severity of loss Feedback:"Physical hazards" are physical characteristics which increase the probability and severity of loss AND "morale hazards" are an unconscious mental attitudes which increase the probability and severity of loss.

Nancy Drew has purchased a homeowners insurance policy with $200,000 of dwelling coverage on Ellery Queen's house. Nancy does not have any ownershipin the house and is speculating on the house catching fire as Ellery stores old tires,flammable materials, and his winter fire wood by his propane tank.Ellery's house burns to the ground; how much will Nancy collect? A)$0 B)$100,000; max recovery on "non-owned" property C)$200,000 D)any recovery depends on the dwelling amount, the coinsurance percentage, andthe reconstruction cost of Ellery's house

A)$0 Feedback:Nancy will not collect a dime as she did not have any insurable interest in Ellery Queen's home.Insurable interest must exist before an insurance company will pay for a loss.

Janice Hendrix was involved in a single vehicle accident. She unfortunately struck the roadbed with her insured vehicle damaging the undercarriage. She does not carry Collision coverage and her policy has Other Than Collision coverage with a $100 deductible. Her vehicle has $1,000 in damages; How much will the insured collect as a claim payment after applying the correct coverage and deductible? A)$0 B)$100 C)$900 D)$1,000

A)$0 Feedback:The correct answer is $0. Janice's does not carry Collision coverage and the impact by her vehicle with the road bed is considered a Collision loss.

David was permanently injured in an auto accident by the negligence of Goliath. David's injuries are valued at $250,000. Goliath has a liability insurance policy with limits of $50,000/$100,000/$50,000. David has PIP and has recovered his full $10,000 limit, whatwill David's UMBI recovery be if he carries $100,000/$300,000 non-stacked UMBI? A)$100,000 B)$190,000 C)$200,000 D)$250,000

A)$100,000 Feedback: Uninsured Motorists (UMBI) coverage pays compensatory damages for bodily injuries, under one's own policy,for amounts which would otherwise have been recovered from the liability insurance of another (the responsible party in an accident);up to those UMBI policy limits. David had $190,000 of outstanding UMBI eligible related claims BUT his UMBI limit was only $100,000 for any oneperson; David will recover $100,000 from his own UMBI coverage.

Miguel your PAP insured was in involved in a three car accident. His policy has Other Than Collision coverage with a $100 deductible and Collision coverage with a $500 deductible. The insured's vehicle has $7,500 in damages. How much will the insured collect from his insurer for the damage to his vehicle after applying the correct coverage and deductible? A)$7,000 B)$7,400 C)$7,500 D)The insured must file a claim against one of the other drivers

A)$7,000 Feedback:The correct answer is $7,000. Collision coverage covers a first party loss of the upset or overturn of the insured vehicle including is collision with any other vehicle or object.

The Liability coverage afforded under the PAP pays on behalf of the insured money damages for which the insured becomes legally liability.What is the totality of coverages and expenses paid for by the PAP's Liability coverage? A)Bodily injuries B)Property Damage C)Includes expenses for a legal defense D)Personal injury

A)Bodily injuries B)Property Damage C)Includes expenses for a legal defense Feedback:The Liability coverage afforded under the PAP pays on behalf of the insured money damages for which theinsured is legally liable to others for bodily injuries or property damages including the expenses for a legal defense.

The PAP defines a "your covered auto" to include temporary substitutes if an insured vehicle is unavailable due to? A)Loss or Destruction B)Vacation C)Business Travel D)All of the above

A)Loss or Destruction Feedback:The PAP defines a "your covered auto" to include temporary substitutes if an insured vehicle is unavailable due to loss or destruction.

A Tenant occupied home with a DP-3 Dwelling Fire policy insuring it has Coverage D automatically in the policy. What does Coverage D cover? A)The insured's loss of Fair Rent in the event of the insured property being damaged by a covered peril and the dwelling being uninhabitable B)The insured's financial loss for any additional expenses necessary to maintain the insured's normal standard of living. C)Thirty days coverage for removed property at a temporary location. D)Debris Removal

A)The insured's loss of Fair Rent in the event of the insured property being damagedby a covered peril and the dwelling being uninhabitable Feedback:The Dwelling Fire policy's Coverage D covers the insured's loss of Fair Rent in the event of the insuredproperty being damaged by a covered peril and the dwelling becomes uninhabitable. The insured's tenants would be reluctant to continue to pay the insured rent on a property they cannot occupy.

Susan Studip has been convicted of Driving Under the Influence of Alcohol. Has Susan Studip pierced Florida's Financial Responsibility law? A)Yes, and she must post a bond in the amount of $350,000 for three years B)Yes, and she must now carry liability limits of $250,000/$500,000/$100,000 or greater C)DUI related offenses only trigger Florida's Financial Responsibility if an auto accident also occurred D)All of the above

A)Yes, and she must post a bond in the amount of $350,000 for three years Feedback:The Financial Responsibility law is triggered by an accident that involves: bodily injury; property damage when a vehicle is rendered inoperative; or certain serious traffic violations such as driving under the influence and committing a felony with a vehicle.

Which of the following are true regarding the "cancellation" of insurance policies? (choose all that apply) A)an insurance company must provide some specific number of days to cancel a policy B)cancellation conditions in general allow the insurance company to cancel at any time C)cancellation conditions in general allow the insured to cancel at any time D)cancellation can only take place if mutually agreed to and in writing

A)an insurance company must provide some specific number of days to cancel a policy C)cancellation conditions in general allow the insured to cancel at any time Feedback:Cancellation conditions in general allow the insured to cancel at any time. However, insurance companiesmust provide some specific number of days as advance notice so the insured will have time to replace the coverage.

Which of the following are regulated by the Office of Financial Regulation? (choose as many as apply) A)banks and credit unions B)pawn shops and auto dealerships C)insurance companies D)race tracks and casinos

A)banks and credit unions C)insurance companies Feedback:The Office of Financial Regulation (OFR) provides regulatory oversight to Florida's financial service providers.Those providers include banks, credit unions, finance companies, and the securities industry.

_______________ damages award money for the tangible and intangible economic loss suffered by a third party claimant. A)compensatory B)general C)special D)punitive

A)compensatory Feedback:Compensatory damages award money for the tangible and intangible economic loss suffered by a third party claimant.

The DP-2 policy form covers which of the following perils? (choose all that apply) A)damage by burglars B)earthquake C)falling objects D)flood E)weight of ice, snow, or sleet F)nuclear

A)damage by burglars C)falling objects E)weight of ice, snow, or sleet Feedback:The DP-2 policy form covers all of the DP-1 perils plus the extended coverage perils and vandalism and malicious mischief and several additional perils including damage byburglars, falling objects, and the weight of ice, snow or sleet.

Which of the following, if any, of the following statements are true? (pick as many as apply) A)fraternals are considered insurance companies B)unauthorized insurers have been issued a certificate of authority by the department C)a domestic insurer is one formed under the laws of "this state" D)an alien insurer is one formed under the laws of any jurisdiction of the United States other than the "this state"

A)fraternals are considered insurance companies C)a domestic insurer is one formed under the laws of "this state" Feedback:Fraternals ARE considered insurance companies AND domestic insurers are ones formed under the laws of "this state". Unauthorized insurers HAVE NOT BEEN issued a certificate of authority by the department.An alien insurer is an insurer other than a domestic or foreign insurer.

Subrogation upholds the principle of ________________. A)indemnity B)even-steven C)finders keepers D)transfer-ability

A)indemnity Feedback:Subrogation upholds the principle of indemnity.

All-The-Stuff-In-The-World-You-Want-But-Don't-Need-Mart waxes their floors at night when the store is closed. Due to an inventory count that took all night the storestarted floor waxing at 9 AM just as the store was opening. The floor waxer did notput out warning signs; the first ten customers that piled into the store all slipped and fell. The court ruled the customer's injuries were the store's fault due to the store's ____________. A)negligence B)diligence C)ownership D)management

A)negligence Feedback:Negligence is the failure to exercise that degree of care that the law requires to protect others from an unreasonablerisk of harm. The failure to act as a prudent person or business would have acted under similar circumstances.

What is the primary underlying requirement of the insured as regards "prompt notice of loss or claim" to the insurance company? A)notification B)payment C)reformation D)indemnification

A)notification Feedback:Prompt notice of loss or claim includes: notification to police in a theft claim; notification to fire department in a loss by fire; notification to the credit cardcompany in the event of credit card or fund transfer theft.

__________________ in an insurance policy specifically express the dollar amount of responsibility of the insurance company to pay to the insured oron behalf of the insured. A)policy limits B)statutory limits C)franchise limits D)responsibility limits

A)policy limits Feedback:Policy limits in an insurance policy specifically express the responsibility of the insurancecompany to pay to the insured or on behalf of the insured.

As regards "the purpose of an insurance license", which if any of the following are true? (choose all that apply) A)rebating is generally unlawful B)the license is not to be issued for the sole purpose of selling "controlled business" C)a license holder shall engage in good faith and fair dealing with the insuring public D)an agent's best sales techniques include churning, twisting, and bundling

A)rebating is generally unlawful B)the license is not to be issued for the sole purpose of selling "controlled business" C)a license holder shall engage in good faith and fair dealing with the insuring public Feedback:All of the following are correct regarding the "purpose of a license": a license holder shall engage him or herself in good faith and fairdealing with the insuring public; rebating is generally unlawful; and the license is not to be issued for the sole purpose of selling "controlled business".

Ian's Impossible Implosions has been contracted by the city to tear down an abandoned apartment building. Unfortunately Ian and his crew were not on their "A-game" that dayand the implosion turned into an explosion tearing down the apartment building and sixother buildings beside it. Ian proved in court that he had been "careful" in the demolitionbut was still found to be responsible. This type of liability is known as _____________ liability. A)strict B)vicarious C)contributory D)contractual

A)strict Feedback:Absolute Liability and Strict Liability is liability imputed to a party as a result of ultra-hazardous activities undertaken by or productsproduced by that party that exposes the public to such a degree of harm that no degree of care provides a defense to the imputed party.

Ricky Racoon has driven his sports car into a lake. The vehicle is considered a total loss valued at $19,000. Ricky rented a substitute vehicle for 20 days at $30 per day for a total of $600 prior to the claim settlement. (choose all that apply) A)the damage to the vehicle is considered a direct loss B)the damage to the vehicle is considered an indirect loss C)the loss of use of the vehicle is considered a direct loss D)the loss of use of the vehicle is considered an indirect loss

A)the damage to the vehicle is considered a direct loss D)the loss of use of the vehicle is considered an indirect loss Feedback:A direct loss is the physical harm to tangible property. An indirect loss means the economic loss which flows as a consequence of a direct loss.

Property Damage is defined in the Personal Auto Policy (PAP) as: A)"bodily harm, sickness or disease, including death that results" B)"physical injury to, destruction of or loss of use of tangible property" C)"liability incurred as a result of errors or omissions in performing professional services" D)None of the above

B)"physical injury to, destruction of or loss of use of tangible property" Feedback:Property Damage in the PAP is defined as "physical injury to, destruction of or loss of use of tangible property".

What is the minimum amount of coverage for Loss Assessment in a Florida HO-6 Condominium policy? A)$1,000 B)$2,000 C)$5,000 D)$10,000

B)$2,000 Feedback:In Florida the HO-6 Condo policy is required to have a minimum of $2,000 for the Coverage of Loss Assessment.

What amount will the insurer pay if an insured has a policy with $400,000 of building coverage, an 80% coinsurance provision; a $500,000 building value and the buildingsuffers a $50,000 loss? A)$0 B)$50,000 C)$400,000 D)$500,000

B)$50,000 Feedback:The payout will be $50,000 as the $400,000 Coverage divided by the valued of the building times the coinsurance percentage = $400,000/($500,000 X .80) = $400,000/$400,000 which equals 1. The loss amount of $50,000 is multiplied by 1 for the payout amount.

Lucille Struthers, your insured, has purchased a brand new vehicle which is a substitute vehicle for her old broken down pickup truck. The finance company is requiring Comprehensive and Collision coverage to be placed on the vehicle. How many days does Lucille have to add the vehicle to her policy? A)4 days B)14 days C)30 days D)No time limit

B)14 days Feedback:Substitute vehicles must be added to a PAP within fourteen (14) days of ownership to be covered for Physical Damage coverage.

A ________________ license enables the holder to solicit, sale, and service onlyPersonal Lines of insurance. A)6-20 Personal Adjuster Agent License B)20-44 Personal Lines Agent License C)20-44 Personal Lines Agency License D)4-40 Personal Lines Agent License

B)20-44 Personal Lines Agent License Feedback:A 20-44 Personal Lines Agent license enables the holder to solicit, sale, and service only Personal Lines of insurance.

How many days notice is required for a policy renewal or non-renewal? A)30 B)45 C)60 D)90

B)45 Feedback:Forty-five (45) days notice of a policy renewal or non-renewal. If the policy is beingnon-renewed the reason for the non-renewal must be stated on the non-renewal notice.If the insurance company fails to provide the (45) forty-five days notice the coverage forthe insured will remain in effect until (45) forty-five days after the notice is given.

Craig Gorney has suffered a compensable Theft loss and is in need of a replacement for his stolen vehicle. You advise Craig that the Transportation Expensecoverage begins ___ hours after a Theft loss. A)24 B)48 C)72 D)96

B)48 Feedback:Transportation Expense coverage begins forty-eight (48) hours after a Theft loss.

Aaron has an automobile insurance policy with the following limits: $50,000 per person and $100,000 per occurrence of bodily injury with $100,000 for property damage liability. A)Aaron has a policy with a single limit B)Aaron has a policy with split limits

B)Aaron has a policy with split limits Feedback: Split Limits has three separate stated limits which apply as follows: (1) the first number is for the maximum payment to any one person injured in one accident(2) the second number is for the maximum payment to all of the people injured in one accident(3) the third number is the limit for all property damage in one accident

There are six different Homeowners policy forms; the HO-2 Broad Form, HO-3 Special Form, the HO-5 Comprehensive Form; the HO-8 Modified Coverage Form. The HO-4 Form is the ________________ Policy Form. A)Unit-Owners Condominium Policy Form B)Contents Broad Form Renters Policy Form C)Tenant Broad Form Lessors Risk Policy Form D)Mobile Home Owners Broad Form for Mobile Home Owners

B)Contents Broad Form Renters Policy Form Feedback:The HO-4 is the Contents Broad Form, used to insure a Renter's contents, loss of use and liability.

This policy sections state what is not covered by the insurance policy either reducing what is covered or eliminating it altogether. A)Insuring Agreement B)Exclusions C)Conditions D)Perils Insured Against

B)Exclusions Feedback: The Exclusion policy sections state what is not covered by the insurance policy either reducing what is covered or eliminating it altogether.

The Preferred Risk Flood Policy is available in which Flood Zones? (choose all that apply) A)Flood Zone A B)Flood Zone B C)Flood Zone C D)Flood Zone X

B)Flood Zone B C)Flood Zone C D)Flood Zone X Feedback:The Preferred Risk Flood Policy is available in Flood Zones B, C, and X.

The Personal Auto Policy provides liability coverage to those that have the status of? A)Plaintiff B)Insured C)Claimant D)All of the above

B)Insured Feedback:The PAP affords liability coverage to those that have the status of an Insured.

Your PAP insured has struck a deer. Which Personal Auto Policy coverage would pay for the damage to the insured vehicle? A)Collision B)Other Than Collision C)Property Damage Liability D)The insured can make the choice to file the claim under either Property Damage Liabilityor Bodily Injury Liability since the deer was injured in the accident

B)Other Than Collision Feedback:Collisions with animals and falling object are made under the PAP's Other Than Collision coverage.

Mary Richards, your insured, has asked for an Umbrella/Excess Liability policy which provides coverage in excess of her underlying limits AND she does not wanta policy which will follow the same limitations as her underlying policies.Which type of Umbrella/Excess Liability policy is Mary asking for? A)Follow Form B)Stand Alone C)Umbrella Solo D)Umbrella Uno

B)Stand Alone Feedback:Stand Alone Excess Liability policies provide coverage in excess of underlying limits ANDdo not apply the same conditions, provisions, or exclusions as the underlying policy.

Flood or Flooding is defined as the partial or complete inundation of ___ or more acres of normally dry land or of ___ or more properties. A)One B)Two C)Five D)Ten

B)Two Feedback:Flood or Flooding is defined as the partial or complete inundation of two or more acresof normally dry land or of two or more properties.

Woody turned on his brand new car and shifted the car into drive instead of reverse and drove into his own garage door when backing from his driveway.How will Woody's Personal Auto policy respond to this loss? A)Woody's Property Damage Liability coverage will cover the loss to car B)Woody's Collision coverage will cover the loss to his car less his Collision deductible C)Woody's Auto policy will pay for damage to Woody's garage door D)Woody's Comprehensive coverage will pay to fix Woody's car

B)Woody's Collision coverage will cover the loss to his car less his Collision deductible Feedback:Liability coverage is not provided to any insured for damage to property: rented to the insured; used by the insured; or in the care of the insured. Collision coverage is for the insured's vehicle and does not cover physical damage to any other property.

Brian Neptune, your Homeowners insured, has purchased a small watercraft (16 feet long) with a small outboard motor (25 horsepower) and he is concernedabout a lawsuit should he damage another boater. He specifically wants to knowif his Homeowners policy will provide any Liability coverage. A)You tell Mr. Neptune that ALL watercraft exposures are excluded under his Homeowners policy. B)You tell Mr. Neptune that his Homeowners policy will extend Liability coverage forhis watercraft as it meets the size and horsepower limits thresholds. C)You tell Mr. Neptune that his Auto policy will cover his watercraft exposure. D)You tell Mr. Neptune that his Homeowners policy will not provide any Liabilitycoverage as his boat's size and horsepower exceed the stated maximums in the policy.

B)You tell Mr. Neptune that his Homeowners policy will extend Liability coverage forhis watercraft as it meets the size and horsepower limits thresholds. Feedback:The exclusion of Liability coverage for watercraft exposures (meaning all exposures NOT EXCLUDED are covered) ARE: Inboard or inboard-outboard boats owned by an insured or of more than 50 horsepower if rented to an insured.Watercraft powered by water jet pump owned by or rented to an insured.Sailboats owned by or rented to an insured that are 26 or more feet in length.Boats powered by outboard motors of over 25 horsepower owned by the insured at the inception of the policy.

Todd Reynolds has purchased a new Omega watch and has a bill of sale in the amount of $5,200. If he insures his watch based upon the bill of sale what typeof loss valuation is this considered? A)actual cash value B)agreed value/stated value C)collectibles pricing value D)replacement cost value

B)agreed value/stated value Feedback:Some policies use "Agreed Value(s)" as a valuation method for paying a claim. When this valuation method is used the insured and insurerhave agreed to the value of the underlying insured property utilizing bills of sale or appraisals at the time the insurance was purchased (i.e. jewelry coverage).

________________ is a legal technique used for the resolution of disputes outside of a court of law. A)repatriation B)arbitration C)disintermediation D)adjudication

B)arbitration Feedback:Arbitration is a legal technique used for the resolution of disputes outside of a court of law.

Bigger Wheels, the manufacturer of adult-sized children's toys, has four manufacturing plants. All four plants are insured with one aggregate limit of $10,000,000 (total for all four plants). Which type of policy limits are used in Bigger Wheel's insurance policy? A)specific B)blanket C)concurrent D)additive

B)blanket Feedback:Blanket Insurance: An alternate method of insuring, blanket insurance is to apply a single amount to two or morecoverage items which are subject to specificrating, with any part of the full amount available to apply to any item.

Which of the following are "obligations" of the insurer as regards the insured? (choose all that apply) A)maintain home office on a "white glove" basis B)deal with the insured in good faith and fair dealing C)determine negligence in first party losses D)provide a defense of the insured in the event of a lawsuit

B)deal with the insured in good faith and fair dealing C)determine negligence in first party losses D)provide a defense of the insured in the event of a lawsuit Feedback:The policy states throughout what the insurance company "will do" establishing expectations on behalf of the insured and responsibilities for the insurer.

Which "other insurance" provision reads: "each policy pays based upon it proportion to all applicable policy limits" ? A)pro-forma B)pro-rata C)equal shares D)excess shares

B)pro-rata Feedback:The pro-rata other insurance provision states each insurer pays based upon its proportion to all of the applicable policy limits.

What does the Gramm-Leach-Bliley Act require insurance companies to do? (chose all that apply)? A)requires accuracy of information in consumer reporting agency's files B)safeguard customer's personal information C)both A and B D)neither A or B

B)safeguard customer's personal information Feedback:The Gramm-Leach-Bliley Act requires financial institutions like insurance companies toexplain their information-sharing practices to their customers and to safeguard sensitive data.

An endorsement to an insurance policy changes the policy in some way. All of the follow are examples of an endorsement EXCEPT? A)the insured adds her sixteen year old daughter to her auto policy B)the insured pays her policy premium on its due date C)the insured buys a new car and adds the new vehicle to her policy D)Florida policies statutorily add Catastrophic Ground Collapse coverage to property policies Points earned:1Points worth:1

B)the insured pays her policy premium on its due date Feedback:Endorsements modify the original policy which changes it in some way. The endorsementmay add coverage, modify the policy in some way to conform to the requirements of the state,or change the insured's loss exposure.

Why is the definition of "Who is an Insured" important? A)it tells insurance company home office staff how to address the insured when they call B)the policy only affords coverage for the individual(s) or parties designated as an insured C)all insured's have to be stated specifically by name in a schedule; if not then that party cannot have the distinction of being an insured D)"Who is an Insured" can never extend beyond immediate family members

B)the policy only affords coverage for the individual(s) or parties designated as an insured Feedback:Insurance policies describe and define who can be considered an insured under the policy. This is very important because the policy will only respond as regards coverage for someoneafforded the designation of an insured.

Perils are the specific risks or causes of loss covered by insurance. Which perils would an insured in a high crime area most logically be concerned about? A)fire & lightning B)theft & vandalism C)wind & hail D)earthquake & volcano

B)theft & vandalism Feedback:Perils are the specific risks or causes of loss covered by insurance. An insured in ahigh crime area would logically be concerned the perils of "theft" and "vandalism".

In a phone conversation you have told John Clayton he has insurance coverage with a company your agency represents. Can you, as John's agent, bind coverage for John orally? A)No, coverage can be bound orally or in writing but you cannot use the telephone to bind coverage. B)No, coverage can only be bound in writing C) Yes, coverage can be bound orally or in writing. D)Agents cannot bind insurance coverage; only insurance companies can bind coverage.

C) Yes, coverage can be bound orally or in writing. Feedback:Insurance coverage can be bound orally or in writing.

Your insured has a vehicle which has been determined to be a total loss with an Actual Cash Value of $20,000. The insured has a $1,000 Collision deductible and thesalvage value of her vehicle is $2,000. The insured has elected to retain the salvage.What amount will her insurance company pay her for her loss? A)$20,000 B)$19,000 C)$17,000 D)$22,000

C)$17,000 Feedback:Salvage Value is always subtracted from value of the property less any applicable depreciation:$20,000 actual cash value - $1,000 deductible - $2,000 salvage value = $17,000.

Aaron has an automobile insurance policy with single limit liability coverage. Which of the following could be Aaron's policy limits? A)$10,000/$20,000/$50,000 B)$25,000/$50,000/$25,000 C)$500,000 D)$50,000/$100,000/$50,00

C)$500,000 Feedback: With Single Limit liability insurance policies one limit will apply to all claims for bodily injury and property damage arising from a single accident.

All of the following can be found on a Declarations Page EXCEPT? A)insurance company's name B)insured's name C)A.M. Best rating D)coverages

C)A.M. Best rating Feedback:The Declarations also called the Declarations Page and/or Dec Page for short is the first page of an insurance policy with a general outline of the policy includingthe insurance company's name, the insured's name, insured address, coverage types, coverage amounts, deductibles, premiums, policy number, and coverage dates.

All of the following are defined as a "your covered auto" by the Personal Auto Policy (PAP) EXCEPT? A)Any trailer you own B)Newly acquired autos C)Any vehicle you own D)Vehicles shown on the Declarations Page

C)Any vehicle you own The correct answer is "any vehicle you own". If an insured owns a vehicle but does not insure that (that is it does not appear on the Declarations Page of the policy) vehicle it is not considered a "covered auto".

Carol Keene, your PAP insured, was injured in his best friend's car when he tripped over his shoelace while exiting the friend's car at an airport terminal. How will Carol's Medical Payments coverage provide for this loss? A)Carol's Medical Payments coverage only covers incidents in the insured's vehicle B)Carol's Medical Payments coverage is Primary when occupying a non-owned auto C)Carol's Medical Payments coverage is Excess when occupying a non-owned auto D)Medical Payments coverage is for third party losses and would not respond in this incident

C)Carol's Medical Payments coverage is Excess when occupying a non-owned auto Feedback:Medical Payments coverage is Primary in the insured's vehicle and Excess in other vehicles.Medical Payments coverage pays for first party losses and is irrespective of any legal liability.

These policy sections "qualify" and place "limitations" on an insurer's responsibility to perform and/or pay. A)The Insnooring Agreement B)Destinations C)Conditions D)Direct Perils Insured Against

C)Conditions Feedback:The policy's Conditions sections qualify and place limitations on the insurer's responsibility to perform and/or pay.

What must be added to the DP-1 policy form before the Vandalism peril can be added to the policy. A)Incidental Coverages (IC) B)Liability Coverages (LC) C)Extended Coverages (EC) D)Additional Coverages (AC)

C)Extended Coverages (EC) Feedback:Vandalism can be added to the policy when Extended Coverages (EC) have been added to a DP-1 policy.

Which major federal law was established to promote accuracy, fairness, and privacy of information in the files of consumer reporting agencies? A)Terrorism Risk Insurance Act B)Gramm-Leach-Bliley Act C)Fair Credit Reporting Act D)ERISA

C)Fair Credit Reporting Act Feedback:The Fair Credit Reporting Act was established to promote accuracy, fairness, and privacy of information in the files of consumer reporting agencies.

The following language: "We will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy"is an example of an? A)Miranda Rights B)Liberalization Clause C)Insuring Agreement D)Subrogation

C)Insuring Agreement Feedback: "We will provide the insurance described in this policy in return for the premium and compliance withall applicable provisions of this policy" is an example of an Insurance Agreement in a standard insurance policy.

All of the following are eligible classes of property in an Inland Marine or Homeowners policy EXCEPT which of the following? A)Cameras and camera equipment B)Fine arts C)Inventory of insured's retail pet store D)Jewelry

C)Inventory of insured's retail pet store Feedback:Standard classes of eligible property in an Inland Marine or Homeowners policy include:cameras, fine arts, golfer's equipment, jewelry, furs, musical instruments, and silverware.

Harry Hornblower has hired a painting contractor, Picasso's Painters, to paint his house, inside and out. Harry has asked the painter to provide him with documentationshowing that Picasso's Painters is fully insured.What is Harry requesting from Picasso's Painters? A)Picasso's Annual Report filed with the state of Florida B)Picasso's Resume, Portfolio, and Letters of Recommendation C)Picasso's Certificate of Insurance D)Picasso's Occupation License

C)Picasso's Certificate of Insurance Feedback:A certificates of insurance is a document which provides information about insurance coverage todemonstrate information about an insured's policy and coverages.

While explaining to your insured her Jewelry Personal Articles Floater you advise her that inherent vice is specifically excluded.How will you explain the concept of "inherent vice" to your insured? A)You tell her inherent vice is when an insured intentionally damages their own property. B)You advise her that inherent vice is when a loss occurs after the policy term has expired. C)You advise her that inherent vice is an internal quality of property which leads to its own damage. D)None of the above

C)You advise her that inherent vice is an internal quality of property which leads to its own damage. Feedback:Inherent vice is an internal quality of property which leads to its damage (such as an interior crack to a precious stone).

Bill Famer, your current Homeowners insured, is purchasing a 220-acre dairy farm with over 1,000 head of cattle and a full dairy operation.Bill wants to know if he can transfer his current Homeowners policy to the new farm. A)You tell Bill that he can transfer the policy as long as he is going to have the farm deeded in the same legal name. B)You tell Bill you will have to write a new HO-6 policy for the new farm. C)You tell Bill that he will not be able to transfer his Home owners policy and you let Bill know that Farm operations in the HO-3 policy are only covered if the farm has "light incidental farming". D)None of the above

C)You tell Bill that he will not be able to transfer his Home owners policy and you let Bill know that Farm operations in the HO-3 policy are only covered if the farm has "light incidental farming". Feedback:The Homeowners Insurance Policy only covers light incidental farming AND does not cover property on a farm premises.

All of the following may be required in a Sworn Proof of Loss request by the insurer Except? A)statement as to the date, time and cause of loss B)statement as to other applicable insurance to the loss C)a copy of the original application of insurance D)an inventory of damaged property

C)a copy of the original application of insurance Feedback:A policy's "Duties After a Loss" portion of the policy includes the requirement for a sworn proof of loss within 60 days of the request of the insurer.

All of the following are "duties of the insured after a loss" EXCEPT: A)submit to an examination under oath B)authorize the insurer to obtain medical reports and records if applicable C)abandon property to insurance company D)give the insurance company prompt notice of loss

C)abandon property to insurance company Feedback:The Conditions portion of an insurance policy list actions to be performed by the insured or their representative so as to not prejudice the insurer in their claim's process.

Geri Curl's laptop was stolen at the Beauty Expo and a brand new laptop just like Geri's cost $1,499. Geri's insurance company pays her $999($1,499 less $500 of "depreciation"); this is an example of? A)depreciation basis B)replacement cost value basis C)actual cash value basis D)none of the above

C)actual cash value basis Feedback:Actual Cash Value basis is where depreciation is deducted and the insured receives a claims payment to replace the item at its current cost minus depreciation.

Insurance is designed to offset the financial impact upon an insured of pure risk. Which of the following best reflects the concept of risk? A)"pure risk" is only the chance of loss B)"speculative risk" is the chance of loss or gain C)both A & B are correct D)neither A or B are correct

C)both A & B are correct Feedback:Insurance is designed to offset the financial impact upon an insured of pure risk. Pure risk is onlythe chance of loss as compared to speculative risk is the chance of loss or gain.

You ask Ritchie how many licensed drivers are in his household as part of his Personal Auto Policy application. Ritchie knows his brother is moving in with him inone week (his brother has had several auto accidents and various tickets).This failure to reveal relevant facts is known as ________________. A)misrepresentation B)breaches of warranty C)concealment D)white lying

C)concealment Feedback:Concealment is the failure of the insured to reveal relevant facts known to the insured in applying for insurance.

Vacancy is by and large when the property is without occupant or _______ (entirely and materially empty). Unoccupancy is by and large when the propertyhas _______ but the owner, tenant, or property custodian is not present for someextended period of time. A)utilities B)security C)contents D)legal purpose

C)contents Feedback:Vacancy is by and large when the property is without occupant or contents (entirely and materially empty).Unoccupancy is by and large when the property has contents but the owner, tenant, or property custodian are not present for some extended period of time.

Actual Cash Value as a loss settlement basis is generally understood as the current cost to replace an item less an allowance for ___________________. A)replacement B)agreed value C)depreciation D)inflation

C)depreciation Feedback:Actual Cash Value as a loss settlement basis is generally understood as the current cost to replace an item less an allowance for depreciation.

Rose Petals has paid her Home, Auto, and Umbrella renewal premiums in cash. All premiums, return premiums, or other funds received by you as an agent aretrust funds and are to be treated in a ________ capacity. A)"best efforts" B)simple interest C)fiduciary D)tax-free

C)fiduciary Feedback:All premiums, return premiums, or other funds are trust funds received to be treated in a fiduciary capacity.

__________ damages award money for the intangible losses such as pain and suffering; and mental anguish. A)compensatory B)special C)general D)punitive

C)general Feedback:General damages award money for the intangible losses such as pain and suffering, and mental anguish.

A "____________" is a vehicle not owned by or furnished or available for the regular use of the named insured or a family member which the insured hires, rents, leases or borrows. A)owned auto B)non-owned auto C)hired auto D)facultative auto

C)hired auto Feedback:A "hired-auto" is a vehicle not owned by or furnished or available for the regular use of the namedinsured or a family member which the insured hires, rents, leases or borrows.

What is the key distinction between an insurer and a reinsurer? A)insurance companies protect against fortuitous events and reinsurers do not B)insurance companies are domestic and reinsurers are alien C)insurers primarily engage in the direct protection of individuals and business; reinsurers insure insurers D)insurers are organized as mutuals and reinsurers are organized as stock companies

C)insurers primarily engage in the direct protection of individuals andbusiness; reinsurers insure insurers Feedback:Insurers include every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity.Reinsurers accept the loss exposure of insurers in their selling and underwriting of insurance policies to business and individuals.

Which of the following is not a key objective of the Department of Financial Services? A)oversight of agents and adjuster licensing B)investigation of insurance fraud C)issuance of drivers licenses and vehicle registrations D)consumer education and consumer services

C)issuance of drivers licenses and vehicle registrations Feedback:The Department of Financial Services was created to provide regulatory oversight for insurance agent and adjuster licensing;protection of consumers and consumer education, investigation of insurance fraud; insure receivership; and return of unclaimed property to Floridians.

Insurance is predicated on the statistical concept of the ______________ which suggest the more exposure we have to study the more likely that any projections wemake are likely to be accurate. A)law of averages B)law of medians and modes C)law of large numbers D)law of standard deviations

C)law of large numbers Feedback:Insurance is predicated on the statistical concept of the law of large numbers which suggest the more exposurewe have to study the more likely that any projections we make are likely to be accurate.

A "____________" is defined as a private passenger auto, pickup, van or trailer not owned by or furnished or available for the regular use of the named insured or a familymember, while being operated or in the care of the named insured or a family member. A)owned auto B)hired auto C)non-owned auto D)alternative auto

C)non-owned auto Feedback:A "non-owned auto" is defined as a private passenger auto, pickup, van or trailer not owned by or furnished or available for theregular use of the named insured or a family member, while being operated or in the care of the named insured or a family member.

In the event of a loss there are additional supplementary payments made by an insurer. Which of the following is not a supplementary payment? A)first aid expenses B)pre-judgement and post-judgement interest C)premiums and fees due D)appeal bonds and bail bonds

C)premiums and fees due Feedback:In the event of a loss there are additional supplementary payments made by the insurer for items such as:first aid expenses, appeal and bail bonds, pre-judgement and post-judgement interest, and travel expenses.

Geri Curl's laptop was stolen at the Beauty Expo and a brand new laptop just like Geri's cost $1,499. Geri's insurance company pays her $999 ($1,499 less her $500 Deductible);this claim settlement is an example of? A)depreciation basis B)actual cash value basis C)replacement cost value basis D)none of the above

C)replacement cost value basis Feedback:Replacement Cost Valuation is where depreciation is not deducted and the insured receives a claims payment to replace the item at its current cost.

The "appraisal clause" in a policy is used to: A)resolve coverage issues B)determine "who is an insured" C)resolve disputes as regards the amount of damages D)none of the above

C)resolve disputes as regards the amount of damages Feedback:The "appraisal clause" is only used to resolve issues regarding the amount of damages in a claim.

Which if any of the following statements are correct? (choose all that apply) A)stock insurance companies are owned by their policyholders B)mutual insurance companies are owned by their stockholders C)risk retention groups are owned by their policyholders D)risk retention groups are organized around a common business practice, product, or set of activities

C)risk retention groups are owned by their policyholders D)risk retention groups are organized around a common business practice, product, or set of activities Feedback:Stock insurance companies are owned by their shareholders and mutual insurance companies are owned by their policyholders.Risk retention groups are owned by their policyholders and they are organized around a common interest.

__________ damages are the tangible and calculable losses such as: medical bills, repair invoices, and lost wages. A)compensatory B)general C)special D)punitive

C)special Feedback:Special damages are the tangible and calculable losses such as: medical bills, repair invoices, lost wages.

George Jungle had lightning strike his house. The damage to the home was $8,500 and George was paid $8,000 ($8,500 in damages less his $500 deductible);this is an example of a ___________ deductible. A)disappearing B)franchise C)straight D)percentage

C)straight Feedback:Straight deductibles are stated amounts that are deducted from damages to arrive at a claims payout.

The Insuring Agreement states all but which of the following? A)the Insuring Agreement list the general overarching description of what is covered B)the Insuring Agreement states that policy contains all agreements and responsibilitiesbetween insurer and insured C)the Insuring Agreement states the policy premium D)the Insuring Agreement states that compliance with conditions exists

C)the Insuring Agreement states the policy premium Feedback:The Insuring Agreement: list the general overarching description of what is covered; states that policy contains all agreements and responsibilities between insurer and insured;and states that compliance with conditions exists.

The number one source of underwriting information is: A)third party reports B)inspections and reconstruction estimates C)the application of insurance D)the internet

C)the application of insurance Feedback:The number one source of underwriting information is the application of insurance.

The Terrorism Risk Insurance Act (TRIA) created a federal "backstop" for insurance claims related to acts of terrorism. What event triggered TRIA? A)the attack on Pearl Harbor B)the Bay of Pigs Invasion C)the events of September 11, 2001 D)the first Gulf War

C)the events of September 11, 2001 Feedback:The Terrorism Risk Insurance Act (TRIA) was created in the aftermath of the events of September 11, 2001creating a federal "backstop" for insurance claims related to acts of terrorism.

All of the following are elements of a valid contract EXCEPT: A)an offer made by one party to another or others B)something of value must be exchanged between the parties C)there must be an equivocal acceptance of the offer D)the agreement must have a legal intent

C)there must be an equivocal acceptance of the offer Feedback:The elements of a contract are an offer, acceptance, and consideration. The acceptance must be "unequivocal and of course the "object" of the contractmust be legal to be enforceable at law.

Which of the following is NOT a key objective of the Office of Financial Regulation? A)to promote a safe and sound financial marketplace B)to contribute to Florida's growth with effective regulation of the financial services industry C)to ensure high profits for Florida's financial service providers D)to provide oversight for Florida's financial service providers

C)to ensure high profits for Florida's financial service providers Feedback:The Office of Financial Regulations was created to provide regulatory oversight for Florida's financial service providers. Two key objectives are to promote a safe and sound financial marketplace;and to contribute to Florida's growth with effective regulation of the financial services industry.

The doctrine of proximate cause states that when there is an ____________________ between an occurrence and damage that grows out of the occurrence, then the resultantdamage is all a part of the same occurrence. A)intervening cause B)strict liability C)unbroken chain of events D)there is no such thing as the doctrine of proximate cause

C)unbroken chain of events Feedback:The doctrine of proximate cause states that when there is an unbroken chain of events between an occurrence and damagethat grows out of the occurrence, then the resultant damage is all a part of the same occurrence.

Jimmy works for Ricecream Sushi, the manufacturer of delicious sushi flavored Italian ice. One day Jimmy was driving on his regular delivery route and accidentally hit a parked car.The owner of the parked car sued Ricecream Sushi, Jimmy's employer.This is an example of _____________ liability. A)absolute B)strict C)vicarious D)contributory

C)vicarious Feedback:Vicarious Liability is when the act or omission by one party is imputed to another.Examples include the liability imputed to parents for the acts of their children; actsof an employee imputed to the employer; and acts of an independent contractor imputed to their principal.

Insurance companies are required to provide a ___-day notice of a policy renewal or non-renewal. A)10 B)20 C)30 D)45

D)45 Feedback:Insurance companies are required to provide a 45-day notice of a policy renewal or non-renewal.

In the Personal Auto Policy (PAP), Bodily Injury Liability coverage pays for: A)Injuries to third parties caused by "an insured' B)A legal defense for the insured C)Supplemental payments such as bail bonds D)All of the above

D)All of the above Feedback:The correct answer is "all of the above", Bodily Injury Liability coverage pays for injures to third parties which the insured isresponsible for due to negligence on behalf of the insured operator. The policy also provides a legal for defense for the insuredand includes supplementary payments.

Betty's insurance company has sent her a "reservation of rights" letter advising her that the company is investigation any omissions, misrepresentations, or concealmentof facts in her initial application. Betty calls your office in a panic for advice and you tellBetty that any omission, misrepresentation, or concealment of a fact shall not preventa claims recovery unless... A)The omissions, misrepresentations, or concealment are fraudulent B)The omissions, misrepresentations, or concealment are material C)The insurance company in good faith would not have issued the policy had the correct informationbeen presented at the time of the application D)All of the above

D)All of the above Feedback:The correct answer is All of the above. Omissions, misrepresentations, or concealment of facts,and incorrect statements shall not prevent a recovery under the policy or contract unless thosestatements were made fraudulently; they are of a material nature; or the insurer in goodfaith would not have issued the policy.

You are counseling a potential new client and are discussing Uninsured Motorist coverage. You advise that Florida law requires stacked UMBI coverage on all policieswith limits equal to the policy's liability limits unless? A)The insured elects non-stacked UMBI B)The insured rejects UMBI coverage C)The insured elects UMBI coverage lower than the policy's liability limits D)All of the above.

D)All of the above. Feedback:The correct answer is "all of the above". Florida law requires stacked UMBI with limits equal to the policy's liability limits unless:the insured rejects UMBI coverage altogether; the insured elects non-stacked coverage; or the insured elects UMBI coverage lower than the policies UMBI coverage.

Jim Smith has just purchased a Condominium and calls your agency to purchase a policy. Which policy type will you sell to Mr. Smith? A)HO-3 B)HO-4 C)HO-5 D)HO-6

D)HO-6 Feedback:The HO-6 policy is used to cover either owner or tenant occupancies in a Condominium.

Mortgage companies are protected in the Conditions section of the insurance policy, "Mortgage Clause". If the insurer has denied a recovery to the insured, what must themortgagee do to make a recovery? A)notify the insurer if the mortgage company is aware of a change in the property's occupancy B)pay any additional premium due on the policy C)submit a signed sworn statement of loss if requested by the insurer D)all of the above

D)all of the above Feedback:A mortgage company can receive a claims recovery under the insured's policy if the insuredhas been denied if the mortgagee pays any premiums due, signs a sworn statement of loss,and has notified the insurer of any change in ownership, occupancy, or substantial change in risk of the insured property.

All of the following are considered an "occurrence" as regards insurance claims and coverage EXCEPT? A)injury or damage from an incidence B)injury or damage from an accident C)injury or damage caused by continuous or repeated exposure to the same general harmful conditions D)an intention by the insured to cause injury or damage

D)an intention by the insured to cause injury or damage Feedback:An "occurrence" is the property damage or bodily injury from an incidence, accident and/or continuous and/or repeated exposure to substantially the same general harmful conditions.

All of the following are possible consequences for aiding and abetting an "unauthorized insurer" EXCEPT? A)responsibility to pay for all unpaid claims B)suspension and/or revocation of insurance licenses C)third degree felony D)double "secret" probation

D)double "secret" probation Feedback:The possible consequences for aiding and abetting an unauthorized insurer include: a third degree felony; responsibility to pay for all unpaid claims;and/or suspension or revocation of insurance licenses.

Jill cannot find her Gucci watch anywhere and there is no sign of forced or unlawful entry into her home. This occurrence can be best described as a ________________. A)burglary B)robbery C)theft D)mysterious disappearance

D)mysterious disappearance Feedback:Jill's scenario is by definition a mysterious disappearance; property disappearance whichcannot be explained and the probability of theft has been eliminated.

___________ damages are awarded by the court to a third party claimant to punish the defendant. A)compensatory B)general C)special D)punitive

D)punitive Feedback:Punitive damages are awarded by the court to a third party claimant to punish.

Geri Curl's engagement ring was stolen from her hotel room while on a swanky Hawaiian vacation. Ms. Curl insured her $10,000 ring for $10,000 with your company after providing a copy of thering's appraisal and pictures. The current value of the ring is $20,000.The insurer paid Geri $10,000 for her stolen ring; this is an example of? A)depreciation basis B)actual cash value basis C)replacement cost value basis D)stated value (agreed value)

D)stated value (agreed value) Feedback:The insured and insurer agree to the value of the underlying insured property utilizing bills of sale or appraisals at the time the insurance is purchased.

Geri Curl's engagement ring was stolen while on vacation from her hotel room. Ms. Curl insured her $10,000 ring with your agency after providing a copy ofher appraisal and pictures of the ring for the $10,000 listed on the appraisal.The market value for the ring is now $15,000.The insurer paid Geri $10,000 for her stolen ring; this is an example of? A)depreciation basis B)actual cash value basis C)replacement cost value basis D)stated value (agreed value)

D)stated value (agreed value) Feedback:The insured and insurer agree to the value of the underlying insured property utilizingbills of sale or appraisals at the time the insurance is purchased.