FLORIDA CIR PRACTICE EXAM

Acme Bottling Co. makes bottles for a large food manufacturer. Acme has dozens of machines, including conveyors, fillers, and cappers, to name a few. Acme Bottling Co. has a Boiler & Machinery insurance policy to protect its financial investment in these machines. On their policy, each of their machines would be referred to as:

"covered peril.X machine."X an "item."X

During a severe windstorm, a large tree in Jeff's yard was blown down and two large bushes were ripped from the ground. Jeff has an HO-3. What is the maximum amount that Jeff can receive for the replacement of the tree and bushes that were damaged by the windstorm?

$0

Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try out the new chair. While leaning back, the chair breaks and Grace injures her neck. She sues XYZ Furniture and is awarded $70,000. Assuming XYZ Furniture's CGL has a Products-Completed Operations limit of $500,000 with a per occurrence limit of $75,000, how much out-of-pocket expense will XYZ Furniture incur if the court costs total $85,000?

$0

Tim's $2,500 boat trailer was stolen from his driveway. Ignoring any deductibles, how much can Tim receive for his stolen trailer when he files a claim against his homeowners policy?

$1,000X

What is the standard deductible on an Equipment Breakdown Protection Coverage Form?

$1,000X

Lightning strikes one of Christy's trees in her backyard and starts a fire that spreads to two other trees before firefighters are able to put it out. The fire department charges her $600 for responding to her call. Christy's DP-2 policy has a Coverage A limit of $95,000. What is the maximum amount of indemnification that Christy can expect to receive for this loss (ignoring any deductible)?

$1,500X

Bill carries $10,000 in PIP coverage with a $500 deductible. One day, he accidentally crashes into a car stopped at a red light. The driver of the stopped car is miraculously free from injury, but Bill's medical bills from the collision come to $14,000. How much will Bill's PIP pay for his injuries?

$10,000

Jeremy owns a business with several machines covered under an Equipment Breakdown Protection Coverage Form with a $500,000 limit. He has three deductibles on his policy: 1) a percentage deductible of 3% per loss, 2) a minimum deductible of $500, and 3) a maximum deductible of $10,000. After experiencing a covered loss of $85,000, how much will Jeremy have to pay out of his own pocket for the loss?

$10,000X . $15,000X

Both Steve and his wife, Arlene, carry DP-2 policies on their $135,000 home. Steve's policy has a limit of $108,000 and Arlene's has a $27,000 limit, and both policies pay on a pro rata basis. After a hailstorm causes $13,000 in damage to their roof, how much of the damage will be covered by Steve's policy (ignoring any deductible)?

$10,400

A fire in Sarah's factory causes her to shut the factory doors for 50 days. To limit her loss of income and keep production going, Sarah spends $125,000 renting equipment and another building. Sarah's commercial property policy doesn't have Business Income Coverage, but it does include Extra Expense Coverage. The limit on her Extra Expense coverage is $100,000 and she has Limits of Loss Payment of 40%/80%/100% during her period of restoration. How much indemnification will Sarah receive for her extra expenses?

$125,000X

Jacob is severely injured at work and receives $600 per week in Temporary Total Disability benefits under his Workers' Compensation insurance for 8 weeks. After 8 weeks, Jacob dies from his injury. What is the highest total amount that his dependents could receive in Death benefits?

$145,200

Craig has an HO-3 policy covering his primary residence with a Coverage A limit of $250,000, Coverage B limit of $25,000, and a Coverage C limit of $150,000. Craig also has a cabin on the lake, which was burglarized. The thieves stole much of the cabin's contents, for a total loss of $18,500. Ignoring any deductibles, how much will Craig's HO-3 policy pay for this claim?

$15,000

Sherrie's roof and fence are damaged in a violent windstorm. Sherrie has a typical HO-3 policy with a $150,000 limit for Coverage A - Dwelling. Assuming she has no endorsements, how much coverage does she have available for the damage to her fence?

$15,000

A processing and servicing company would qualify for a BOP only if they have less than _____ in annual revenues.

$2 millionX

Diana is insured under a DP-2 policy with the following coverage limits: Coverage A - $150,000, Coverage B - $15,000, and Coverage C - $25,000. She and her fiancé have planned a destination wedding, but their hotel catches fire shortly after their arrival. Smoke from the fire damages all of their belongings, including Diana's $4,000 wedding dress. Diana's loss totals $5,200. When she files a claim with her insurance company, how much can she expect to receive for this loss under her DP-2 (ignoring any deductible)?

$2,500

Susan is insured with a homeowners policy. After someone destroyed her late husband's gravestone with a vehicle, Susan filed a claim against her homeowners policy. Which of the following statements is TRUE?

$2,500 to pay for the damaged gravestone.X

Tamara is fully insured by a DP-1 on her $175,000 home. When a portion of Tamara's attached garage burns in a small fire, the adjuster estimates it will take $8,000 to repair the damage. However, based on the age of the structure, the adjuster writes Tamara a check for $5,500. Once repairs are completed, Tamara submits proof and receives how much more from her insurer?

$2,500X

Wilson is a Florida resident who maintains a liability policy with limits of 10/20/10. Recently, he was visiting a friend in Georgia when he ran a red light and hit a BMW, causing $30,000 in property damage. The minimum liability requirement in Georgia is 25/50/25. How much will Wilson's liability insurance pay in this situation?

$20X

While Andrea was grocery shopping in BB Mart, the large Dairy sign fell off the wall and landed on her. Because of her extensive injuries, Andrea sued BB Mart and was awarded $375,000 in damages. BB Mart's Commercial General Liability policy has a general aggregate limit of $1,000,000 and a per occurrence limit of $300,000. What is the per occurrence limit after this claim is settled?

$300,000

During a strong storm, Missy's grain drill was mangled by a tornado, which rendered it useless. Before the damage, the grain drill was worth $25,000, but it would cost $45,000 to buy a new one today. Missy's farm policy has a replacement cost endorsement, and the grain drill is scheduled on a Mobile Agricultural Machinery and Equipment form with a $36,000 limit. Missy replaces her grain drill with one she found on sale for $40,000. How much total indemnification will she receive?

$36,000

Stephanie owns a house that she rents out for $2,500 a month. A massive kitchen fire forces her tenants to move out while the interior is overhauled. After two months, the repairs are complete, and Stephanie contacts her tenants, only to find that they've found a new place to live. It takes Stephanie another month and a half to find new tenants. Assuming that Stephanie had a $100,000 DP-2 policy, what is the maximum amount she could receive for lost rental income under Coverage D?

$5,000

Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy has liability limits of 25/50/10. How much will the primary policy pay for the injuries?

$50,000

How much of a limit is included for Credit Card Fraud or Forgery, an additional coverage in a homeowners policy?

$500

Jennifer's PAP has a Comprehensive deductible of $100. Jennifer lets her sister Tina borrow her car, and Tina hits a llama worth $500. The llama's owner files a claim for the loss of his llama. How will that claim be settled?

$500 paid under Jennifer's liability coverage

On January 27, 2008, Ryan was using an exercise bike purchased from NusquamCycle when the chain broke, causing him to fall and severely bruise his knee. It seemed to heal just fine, but three years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration most likely resulted from the earlier accident with the exercise bike. Which of the following CGL policies would cover Ryan's claim filed January 25, 2011?

A claims-made policy from Jan 31 2010 -Jan 31 2011 with a retroactive date of Jan 1 2008

Under the Longshore and Harbor Workers' Compensation Act, how much would the surviving spouse of a deceased worker receive in benefits?

50% of the deceased worker's Average Weekly Wage

A Discovery Form Commercial Crime policy can apply to losses discovered during the policy period, as well as up to how many days after its expiration date?

60

An employee receiving income benefits under Workers Compensation insurance cannot receive more than:

66 2/3% of the State Average Weekly Wage.

James is in the consulting business and frequently flies from city to city to meet clients and help them improve their business practices. Most cities have adequate public transit, but sometimes it's easier to rent a car. Which coverage symbol would specifically pertain to rental cars on James' Business Auto Policy?

7X

What is the current minimum amount of liability coverage required by the state of Florida for a driver who is found to be at fault in an accident?

10/50X

Acme Construction, Inc. has one contractor and one receptionist. The contractor makes $25/hr, and the receptionist makes $10/hr. The contractor worked exactly 8 hours in 2010, so he made $200. The receptionist worked 10 hours, so she made $100. Therefore, Acme's entire payroll for 2010 was $300. Assume that, for every $100 of payroll, the WC rate for contractors is $50 and the rate for receptionists is $5. How much did Acme owe in WC premiums?

105

Scott lived in a mobile home before it was completely destroyed in a recent flood. The mobile home is large enough to qualify for a special loss settlement under his flood policy, which has a limit of $28,000. Before the flood, the mobile home was worth $15,000, but it would cost $25,700 to buy a new one today. How much indemnification will Scott receive for this loss?

15,000X

Under which circumstance would it be legal for an insurer to charge one insured more than another insured for the same coverage?

168 HOURS(7 DAYS)

Under the Earthquake and Volcanic Eruption endorsement in a commercial property policy, what is the time span within which multiple earthquake or volcanic events are considered a "single occurrence" for coverage purposes?

168 hours (7 days)

Craig has an HO-3 policy covering his primary residence with a Coverage A limit of $250,000, Coverage B limit of $25,000, and a Coverage C limit of $150,000. Craig also has a cabin on the lake, which was burglarized. The thieves stole much of the cabin's contents, for a total loss of $18,500. Ignoring any deductibles, how much will Craig's HO-3 policy pay for this claim?

2,500X $18,500X

A dryer fire scorches the interior of Bill's home, forcing him to move out while repairs are made. In addition to paying for temporary housing, he also loses the rental income he received from his roommate Frank. Which two Dwelling policy coverages could help Bill with the lost rental income AND his additional living expenses?

A & Coverage DX A & Coverage EX

Which of the following is NOT one of the differences between a BAP and a truckers policy?

A BAP uses coverage symbols to designate covered autos.

Lucille owns her own woodworking business, building custom items such as dressers, wooden trunks, and mantelpieces. A fire destroys her entire operation and Lucille files a claim with her insurer. Which of the following would be covered under Coverage A of the Building and Personal Property Coverage Form in her commercial property policy?

A bandsaw permanently affixed to the floor

On January 27, 2008, Ryan was using an exercise bike purchased from NusquamCycle when the chain broke, causing him to fall and severely bruise his knee. It seemed to heal just fine, but three years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration resulted from the earlier accident with the exercise bike. Which of the following CGL policies may cover Ryan's claim filed January 25, 2011?

A claims-made policy from Jan 31 2009-Jan 31 2011

Kyle operates a collision repair garage and has many vehicles in his care, some for extended periods of time. Which type of coverage protects Kyle from any liability claims which may arise if one of the cars is further damaged or destroyed while in his possession?

Bailee Coverage

Francis owns a small shoe store. Since his business isn't particularly risky, he has a commercial property policy that provides named-peril coverage to his building and personal property, without any additional coverages. Which Causes of Loss form does Francis have attached to his coverage form?

Basic Form

Which of the following would NOT be covered under Errors and Omissions insurance?

Bodily injury claim

The DP-3 is known as the:

Broad Form.X

Alan owns a commercial landscaping business and does most of his work during the summer months. One day, he arrives at work to find an enormous hole in the middle of the yard where he stored his lawn mowers. Under which Causes of Loss form(s) would the mowers, which were consumed by the sinkhole, be covered by his commercial property policy?

Broad, and Special Forms onlyX

In a DP-2 Broad Form, which of the following would be covered under the peril of Theft?

Broken windows caused by a burglar breaking in.

Jones' Auto in Dallas, Texas buys 50 cars from ABC Auto in Tokyo, Japan. They sign a contract whereby Jones' Auto assumes the risk of any damages to the cars until they are delivered. What term of sale have they agreed to?

Cargo, InsuranceX Cost, Insurance,X

Robert applies for an auto loan from his local bank. He meets with a loan officer, who goes over Robert's paperwork. The loan officer tells Robert: "I'll give you a loan as long as you insure the car with ABC Insurance." This is an example of:

Coercion

Acme Insurance Group agrees to act as a surety to Willis Construction in the development and construction of a new shopping mall. As a condition of the agreement, Acme Insurance Group requires Willis Construction to post $500,000 in a bank account controlled by Acme Insurance Group. If Willis Construction completes their obligation, Acme Insurance Group will return the cash to Willis Construction. What would we call the $500,000 in the bank account?

Collateral

Which of these is NOT a party to a surety bond?

Collateral

D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a telephone pole. Which part of his Auto Insurance Policy will help him pay for the repairs to his car?

Collision Coverage

Francis has many employees who go out and market his product in the streets on a daily basis. This "go get 'em" approach seems to work well for business, but it does increase the risk of an auto accident. To curb the financial risk of a hospital stay resulting from an accident, Francis adds _____________ to his BAP.

CollisionX

Wendy hires Jim to build an addition to her house. Jim takes the job and finishes it in good time. Unfortunately, as Wendy is walking across the threshold of the new addition, a floorboard gives way and Wendy falls into the crawl-space below, injuring her leg and back. Which commercial general liability coverage could help cover the cost of Wendy's injuries?

Completed Operations Liability

When Phyllis passed away, she left an inheritance for her three children, including ten ounces of gold for each of them. To execute her will, her lawyer hires another attorney, Williams, to oversee the careful distribution of the gold. The court requires a bond to assure Williams will conduct himself honestly. Which type of bond has the court required?

Court bondX Gold bondX

In a Farm Insurance policy, which of the following would cover the main dwelling on the insured farm?

Coverage A

When a fire breaks out inside XYZ Printing, it damages the building structure, and two of the printing presses, which were bolted to the floor. What coverage within the BOP policy would cover the printing presses?

Coverage A

Cameron is fully insured by a DP-2 on his $130,000 home. His monthly mortgage payment is $775 per month, and he usually pays $400 per month in groceries. When a kitchen fire damages his house, causing $61,000 in damage, he forced to move out for a month while the repairs can be made. Cameron's hotel bill for the month comes to $1,250 and he spends $600 eating at restaurants. Based only on this information, how much indemnification can Cameron expect to receive for this claim?

Coverage A - $61,000; Coverage E - $1,450

DEC Construction was hired to completely renovate Randall's department store. DEC Construction is in charge of the project, but hires Mac Electric (an independent contractor) to complete the electrical portion of the job and requires Mac to buy Owners & Contractors Protective Liability coverage as a condition of the contract. Who would be listed as the named insured(s) for this coverage?

DEC Construction

Which of the following is NOT considered an "out-of-pocket expense" in health insurance?

DeductibleX

John works for ABC Insurance. He is paid on a commission basis and needs to meet certain sales goals in order to draw a reasonable salary. To help in this endeavor, John regularly tells potential clients that XYZ Insurance and Integritas Insurance often fail to pay claims, and that they charge unreasonably high premiums. In speaking falsely of his competition, John has indulged in which unethical practice?

Defamation

In which section of an insurance policy might you find the following statement? "'We, us, and our' refers to ABC Insurance company."

Definitions

Which of the following oversees continuing education classes for customer representatives?

Division of Insurance Agent and Agency Services

As an agent of XYZ Insurance, Donna has a fiduciary duty. Which of the following is NOT a way in which Donna fulfills this duty?

Donna goes above and beyond to help her clients, even if it means acting outside of her authority.

Dr. Adams is in the middle of a malpractice lawsuit. Her insurer decides it will be more cost effective to simply settle the suit rather than draw the process out over several months. Assuming Dr. Adams holds a Professional Liability Policy, which of the following statements is TRUE in regards to settling the claim?

Dr. Adams' insurer must seek her consent before settling the claim.

David just opened his own consulting business, and has taken on several new clients. He's having difficulty managing his schedule on top of all the other responsibilities related to owning his own business, so he hires Tina via contract to work as his full-time office manager for $15 per hour. According to the definitions in David's Commercial General Liability policy, which of the following best describes Tina?

Employee

Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes?

Employee as Additional Insured

Tim, taking advantage of the economic downturn, started a business buying gold and silver from people who needed cash. Tim and one employee negotiated deals with sellers in the front of the shop, while another employee worked in the back of the shop, where she counted the money and kept the books. Which commercial crime coverage would protect Tim from losses resulting from theft, specifically by either his current money counter or any other money counter he may employee after her?

Employee theft: scheduled positions

Which of the following individuals is NOT considered a "custodian" in commercial crime insurance?

EmployeeX InsuredX

Cliff receives a letter from the IRS, informing him that he has severely underestimated his Adjusted Gross Income for the past year. Cliff was oblivious to this fact because XYZ Accounting has filed his taxes for him for the past 15 years. Now, Cliff owes $15,000 in back taxes. He sues XYZ Accounting for this mistake. Which of the following would cover the cost of the lawsuit for XYZ Accounting?

Errors and Omissions Insurance

Which statement BEST describes a stand alone excess liability policy?

Excess liability insurance that "follows" the base policy, but includes its own set of limitations and exclusions

Jerry is an adjuster and has signed a contract with ABC Insurance to adjust claims in an area recently devastated by a hurricane. Jerry receives the claims from ABC Insurance, completes the inspections, and settles claims on behalf of ABC Insurance according to his contract. What type of authority has ABC Insurance given Jerry?

Express authority

Martin regularly travels much of the state for work, so his employer has given him a company car. Which endorsement to Martin's PAP would provide him with liability coverage for the company car?

Extended Non-Owner

Under which law is an insurer required to explain its reasons for denying coverage?

FCRAX

Randy owns a clothing store. One day, he notices a shady character with a backpack who is hanging around acting nervous. Randy becomes suspicious and approaches the young man. As the boy makes an effort to avoid him, Randy grabs his arm and detains him until the police arrive. Not finding any stolen merchandise, the police let the boy go. Two weeks later Randy is notified that he will be sued for violation of the young man's civil rights. This is an example of what type of personal injury covered under Randy's Commercial General Liability policy?

False Arrest, Detention, or Imprisonment.

Farmer Scott owns a farm and raises goats, producing a lot of manure. Occasionally, after a strong rain, some of the waste washes into a nearby river. Which insurance coverage can protect Scott from any liability caused by the goat waste runoff?

Farm Pollution Liability

Which Farm policy would cover animal waste overflow and chemical spills?

Farm Pollution Liability

Farmer Bob would like to sell his recent harvest of lettuce to a local wholesaler. The wholesaler agrees, but only if Bob can prove he has insurance protection in the event that his lettuce causes people to become ill. What type of insurance does Bob need in this situation?

Farm Product Liability insurance

All of the following are types of Cargo Coverage in Ocean Marine insurance, EXCEPT:

Floating, Open or Long Term.X

Bill is going to switch employers, and therefore switch healthcare providers. Which federal law ensures that he won't be denied coverage when he switches health plans?

HIPAA

Which of the following homeowners policies provide coverage on an open-peril basis for personal property without endorsement?

HO-5

Hank has collision coverage with a $2,000 deductible on his 2010 truck. One dark, rainy night, Hank's truck slips off the road and rolls over down the embankment. The truck sustains $45,000 in damages, but the actual cash value of the vehicle is only $25,000. Which of the following statements is TRUE?

Hank will be indemnified by his insurer for $23,000.

Residual market insurance programs are primarily designed to meet the needs of which type of consumer?

High-risk consumers

Which of the following statements best explains why residual market insurance programs exist?

High-risk consumers need insurance, yet no private insurer wants to issue high-risk policies.

Loggers, roofers, and coal miners would fall into which of the following categories?

High-risk employees

Which of the following insurance packages will indemnify a policyholder for a variety of hospital-related expenses such as nursing care, supplies, and rooming charges?

Hospitalization Expense insurance

Paula is hoping to become a customer representative; under what circumstances might she be able to skip the pre-licensing course and exam?

If she has earned nine hours of college credit in property and casualty courses.

Gail's restaurant is doing more business than ever, so Gail decides to add more dining space. Three weeks into the project, a hurricane blows through town, reducing the new construction to rubble. Gail maintains commercial property insurance coverage valued at 70% of her property's replacement cost, although her policy says she must maintain at least 80% to be fully insured. Which coverage on her policy could pay to rebuild her restaurant at replacement cost?

Increased Construction Costs coverageX

Which of the following is NOT a form of insurance fraud?

Increasing your insurance coverage when you think a loss is likely.

This agent is self-employed and able to offer insurance products from more than one company at a time.

Independent Sales Agent

One morning, Jill arrives to open the bank, only to find the door already unlocked. Upon entering the bank, she sees the vault door has been blown open and a large amount of money has been burned when an explosive charge went off. Which commercial crime insurance coverage might cover the loss?

Inside the Premises: Theft of Money and Securities

Which of the following is TRUE about workers' compensation insurance?

It benefits both the employee and the employer.

Which of the following is TRUE of the vacancy condition in a typical insurance policy?

It establishes the parameters for considering a building vacant for the purpose of coverage.

Which of the following statements about the Standard Flood Insurance Policy is FALSE?

It is subject to state courts.

When discussing farm insurance, which of the following most accurately describes "scheduled property"?

Itemized property

Dr. Smith has a claims-made malpractice insurance policy with a policy period from June 30, 2006 to June 30, 2007. Which claim would trigger this policy?

June 1, 2006.X

ABC Roofing has two CGL policies that cover the same losses. Both policies are occurrence forms, thus pay out on a pro rata basis. The first policy is through KLM Insurance and has a limit of $300,000. The second is through XYZ Mutual, with a limit of $600,000. One day, ABC Roofing suffers an occurrence resulting in a $150,000 covered loss. How will this loss be indemnified?

KLM Insurance will pay $50,000; XYZ Mutual will pay $100,000

Which of the following professionals would be most likely to purchase malpractice insurance?

Lawyer

Lemon Insurance Co. decides not to renew Hugh's Personal Auto policy, which is set to expire on May 31. Which of the following statements is TRUE?

Lemon Insurance must notify Hugh at least 45 days before the policy expires.

Which of the following is a feature typically found in a Business Owners Policy?

Liability coverageX

Which of these is NOT typically excluded from coverage in a property insurance policy?

Lightning

Which of the following situations does NOT involve an instance of "pure risk?"

Loss of money invested in the stock market

DEC Construction was hired to completely renovate Randall's department store . DEC Construction is in charge of the project, but hires Mac Electric (an independent contractor) to complete the electrical portion, and requires Mac to have Owners & Contractors Protective Liability coverage for the job. Who is responsible for paying the premiums for this policy?

Mac Electric

During a routine tooth extraction, Dr. Dentem administers too much laughing gas and causes brain damage to his client. The family sues Dr. Dentem for failing to follow procedure. Which kind of insurance would cover the cost of the lawsuit?

Malpractice Insurance

Matthew works for Barry John Coal Company. One day, when all the work trucks are busy, Matthew's boss asks him to use his own truck to deliver a load of coal to a customer. On the way, Matt gets distracted looking at directions and swerves into oncoming traffic, causing a serious accident. Why might Matt's PAP liability insurer deny coverage for the damage Matt caused?

Matt's accident occurred during employment-related activities, so it will be covered by the employer's liability policy.

RWW Insurance creates a radio promotion where they advertise that they will insure any car for $200 a year. They don't actually offer such a plan, but they figure they will be able to sell hundreds of policies to people who show up looking for the bargain. What type of unfair insurance trade practice does this behavior exemplify?

MisrepresentationsX

Grant works at ABC Convenience. One day, a man pulls up in an expensive car and pays cash for his gas with a hundred dollar bill. Grant accepts the bill without checking its validity. When Grant's manager checks the bill later, he discovers it is a fake. Which commercial crime coverage could protect ABC Convenience from financial loss associated with accepting the fake hundred dollar bill?

Money Orders and Counterfeit Paper Currency

Which of the following best describes how losses are valued under a Commercial Crime policy?

Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace.

Which policy is used as an alternative to the Trucker's Policy to cover companies that offer transportation services to the public on a regular basis, rather than for hire?

Motor Carrier policy

Stan has a personal auto policy to cover his two vehicles, but he recently purchased a custom built motorcycle as well. Which type of endorsement will Stan need to cover the motorcycle?

Motorcycle EndorsementX Customized Equipment EndorsementX Two-wheeled Vehicle EndorsementX

Which of the following people would be ineligible for coverage under the Florida Automobile Joint Underwriting Association?

A college student from Alabama with two DUIs on his record who is staying with his grandmother in Florida for 2 months over the summer.

Frank purchases an automobile policy from publicly-traded XYZ Insurance. He pays regular monthly premiums, and also purchases stock in XYZ and receives dividends when the company turns a profit. From which type of company has Frank purchased insurance?

MutualX

Martin works as an accountant for Smith Manufacturing. Smith Manufacturing has tasked Martin with finding an insurance provider to meet the company's needs, so Martin interviews several insurers. At the end of one interview with PRO Insurance, the insurance representative hands Martin an envelope containing $5,000 in cash, on the condition that Smith Manufacturing selects PRO Insurance as its insurance provider. What would we call the $5,000 in cash?

A kickback

Which of the following incidents would a liability insurance policy cover?

A man slips inside a grocery store and injures himself.

Which of the following states takes a "monopolistic" approach to workers' compensation insurance?

New YorkX New JerseyX Texasx

Which of these statements is true

ACV basis.X RC basis.X

Which of the following would be most likely to purchase an Errors and Omissions policy?

ActorX LoggerX

Lance runs a staffing service in which his main job is transporting workers to and from various jobsites. His van can carry up to 12 people at a time, and he is worried about getting hit by a driver who does not have enough liability insurance to cover all of his passengers. Which additional coverage could help pay for injuries to his passengers if this were to happen?

Additional InsuredX Cars EndorsementX

Peter works as a real estate agent and uses the internet extensively for sales leads and advertising. One day, he finds another realtor's ad online and copies it, using his own information as the contact info. This generates a lot of business for Peter, but unfortunately Peter gets a call one day and is informed that he is being sued for copyright infringement. This is an example of what type of claim covered under Peter's Commercial General Liability policy?

Advertising Injury

Assuming Ernie holds a BOP with a Selected Per Occurrence limit of $300,000, what would Ernie's Completed Operations and General Aggregate limits equal?

Aggregate: $500,000X

Eric works in Florida for Gemutlich Insurance. His company is licensed to sell insurance in Florida, but is based out of Munich, Germany. Gemutlich Insurance was formed under German law, but follows all applicable Florida laws and possesses a Florida Certificate of Authority to sell their product. Which type of insurer does Eric work for?

Alien Insurer

Which of the following statements regarding scheduled fidelity bonds is FALSE?

All employees are bonded for the same aggregate amount.

Allen works as an adjuster for Insurer B. Which of the following is FALSE?

Allen is a salaried employee who only sells Insurer B's products.

Which of the following statements is NOT true of an insurance adjuster?

An insurance adjuster receives her authority to sell products on behalf of the insurer through a written contract.

Who is NOT eligible for a homeowners policy?

An owner of a house in which he does not live, but rents to a tenant

In the Business Auto Policy, what does the symbol #2 mean?

Any Owned Vehicle

Which statement about the Federal Employers Liability Act is TRUE?

civilian employees.X

Which statement about the Federal Employees Compensation Act is TRUE?

civilian employees.X a jury trial.X their families.X

According to Lonnie's health insurance policy, she is responsible for paying 15% of all of her medical costs. This percentage is Lonnie's:

coinsurance payment.

Thomas Building is asked by the local youth center to build a new recreational building for the local community. As a condition of their contract, Thomas Building must secure a surety bond. Thomas Building finds ABC Surety Bonding and works out a suretyship for the project. As part of the deal, Thomas Building will need to have $200,000 in cash reserves kept by ABC Surety Bonding. This money would be called:

collateral.

When Louise goes online and fills out phony applications with XYZ Auto Insurance in order to print the temporary insurance cards and sell them for a profit on the black market, she is:

committing hard fraud.

Dr. Nelson routinely schedules her patients for lab tests that they don't need so she can charge their insurers for more money. Dr. Nelson is:

committing health insurance fraud.

Which statement about Personal Article Floaters is FALSE?

coverage limits.X

Which of these businesses would be LEAST likely to need a bailee's customer floater?

dry cleanerX

A captive insurance company:

exists solely to provide insurance for its parent company.

A "hazard" is defined as:

experiencing a loss.X

After her business suffered damage in a fire, Jane filed a claim with Acme Insurance, which dispatched Bob to adjust it, even though he was not allowed to adjust commercial claims. He investigated Jane's losses and submitted his estimate to Acme Insurance, which issued her a settlement check based on that estimate. Bob had _______ because Acme Insurance accepted his estimate and paid Jane's claim.

express authorityX

Which of the following losses may qualify for coverage under Coverage F - Medical Payments?

falls down her basement stairs.X

Coverage C - Personal Property of a homeowners policy typically excludes:

fish.

The Write Your Own program allows private insurers to:

flood policies.X

SureTrust Insurance was founded and operates in Texas. In Texas, SureTrust is considered:

foreign insurer.X

Tim is the plaintiff in a case involving an auto accident. To recover monies he feels are due him, Tim produces documents to prove he had to pay over $55,000 in medical bills. If the court were to award Tim $55,000, the damages would be classified as:

generalX

UM/UIM coverage excludes:

government vehicles.

Xavier owns a small insurance company. Recently the company won a bid to insure a new housing development in Omaha, NE. His company can handle any claims that arise, but if a series of tornados were to tear through the area and destroy the entire development, Xavier's company would suffer financially. Which type of insurer could help Xavier's company protect itself the most from this potential loss?

groupX

When a car stops short in front of Mike's car, he manages to hit the brakes in time and avoids a collision. To Mike's surprise, the other driver then throws the car into reverse and backs into Mike's car! The other driver's actions are an example of:

hard fraud.

Risk retention groups do NOT:

have the support of state Guaranty Funds.

Strict liability:

holds a person liable for his actions regardless of how much care he demonstrates.

An insurance company might consider any of the following a risk, EXCEPT:

home.X

According to the state of Florida, the term "wind mitigation" most closely refers to:

hurricane-force winds.X

Jackie lives in an area recently devastated by a hurricane and has filed a claim with her insurance company, ABC Insurance. Jerry, an adjuster contracted by ABC Insurance, pulls up to Jackie's house in a truck with the ABC Insurance logo on the side, and wearing a shirt with the ABC Insurance logo on the front. Although Jackie doesn't know that Jerry is contracted by ABC Insurance, she has reason to believe he has the authority to adjust her claim. This is an example of:

implied authority.

William is wearing an ABC Insurance jacket and has an ABC Insurance sign over his rented office. The walk-in customer could reasonably believe that he has the authority to write an insurance contract because of his:

implied authority.

Joe decides to go surfing for three months in Hawaii. Before he leaves, he locks up his surfboard shop and rents a storage unit for most of his equipment and merchandise. When Joe returns, he finds that his shop has been broken into and vandalized. Under what policy condition would Joe's insurer likely refuse to make a full payment?

in PolicyX ConcealmentX

Which of these statements is true?

insurance companies.X

Errors and Omissions coverage in an Equipment Breakdown Protection policy provides coverage for:

insured because of the insurer's error or omission of material information.X

In a Personal Auto Policy, deductibles are applied on a/an ________ basis.

insuredX

A reciprocal insurer is:

insurer's profits and losses.X`

Residual market insurance programs are funded by:

insurers and their policyholders.

Guaranty Associations are funded by:

insurers.

Citizens Insurance:

is available to certain people who are not residents of Florida.

Which of the following events would trigger the end to a commercial property Builders Risk Coverage Form?

is poured.X

A few weeks ago Christopher's garage was destroyed by an out-of-control motorist. Fortunately, the motorist had sufficient liability insurance to cover the damages. However, the insurer insists that Christopher's garage is worth far less than the appraisals he has received from contractors. Christopher and the insurer have gone back and forth in negotiations for weeks, making little headway. Christopher decides it's time to:

issue a complaint against the policyholder.

Joe (the principal) is handling the disbursement of a deceased executive's estate, and he is required to carry a bond guaranteeing such work. The surety company requires one of its accountants to be a second signer on the disbursement checks that Joe writes. In this case, the surety has established:

joint control.

Which of the following best describes inland marine insurance?

lakes and in coastal areasX

A large corporation owns a small hunting cabin in the woods, that it uses for occasional weekend getaways. The corporation can insure the cabin against property damage with a:

liability policy.X dwelling policy.X

All of the following people may be allowed to perform official wind mitigation inspections that meet the requirements for insurance premium discounts, except a:

licensed professional engineer.X licensed professional architect.X

Which statement BEST describes Umbrella coverage?

limitations and exclusionsX

Which statement BEST describes the "Follow Form" in excess liability coverage?

limitations and exclusionsX provided by NAIC X

In dwelling policies, Coverage D pays for:

lost rental income.

Workers' compensation insurance can provide compensation for all of the following, EXCEPT:

lost vacation time

All of the following causes of loss are excluded from coverage in an Equipment Breakdown Protection Coverage Form, EXCEPT:

mechanical failure.

When an insurer buys insurance to reduce its exposure to loss, this is called:

mitigation.X

States that have special legislation that requires workers' compensation coverage to be provided exclusively by the state's workers' comp program are:

monopolistic.

Customer representatives:

must be licensed by the Florida Department of Financial Services.

Mark is on vacation in Italy when his luggage is stolen, including a $2,000 laptop, a $500 suitcase, and $400 in clothes. Mark has an HO-3 homeowners policy. Excluding any applicable deductible, which of the following statements is TRUE?

outside the US.X he entire $2,900 loss.X

The purpose of a fidelity bond is to guarantee that:

over international waters.X liability coverage.X

Phil heads over to visit his friend Josh, who is sick with the flu. While at the house, Josh fails to cover his mouth when he coughs and Phil ends up contacting the flu. Phil files a claim with Josh's insurer for medical expenses and lost income while Phil is out sick from work. The insurer denies the claim because:

own accord.X

Anna's Rare Books in Birmingham needs to ship three F.Scott Fitzgerald first editions to a customer in Mobile. The combined value of the books is over $400,000. What type of Inland Marine insurance policy should Anna's Rare Books buy to cover this shipment?

pair and set policyX cargo policyX

For loss settlement purposes, most homeowners policies:

pay for damages to personal property at actual cash value, and damages to structures at replacement cost.

Jane owns an aquarium supplies store and purchases a Business Owners Policy to protect her assets. Which of the following protections can Jane expect from her standard BOP with no endorsements?

peril coverageX

Which of the following statements regarding primary care physicians is FALSE?

physician they'd like.X

Herb owns a processing plant outside of town that services all the local farmers. He's been using over-the-road transportation but wants to streamline his business by using the railroads. He contacts ABC Railway Transport and the two come to an agreement: ABC Railway will run a sidetrack onto Herb's business premises, if Herb agrees not to hold ABC Railway responsible for certain liabilities that could result from the sidetrack's use. This agreement would fall under __________ in Herb's Commercial General Liability policy.

productX

After an insurance claim has been filed in Florida, how soon must the insurer respond to the claim?

promptnessX

Inland Marine insurance protects:

property being transported.

In a BOP, all of the following losses are excluded from liability coverage, EXCEPT:

property damage to premises rented by the insured.

After an earthquake, Jake's home is still standing, but it is a little shaken. The damage is not extensive, but Jake wants to cash in on the situation, so he takes a sledgehammer to some of his extra belongings and adds them to his claim. Jake has committed:

property insurance fraud.

Dwelling policies cover:

property, and liability with an endorsement.

A Florida company that is assigned to "Tier 2" for coverage under FWCJUA must pay:

rates that are 50% higher than voluntary market rates.

Risk avoidance is a risk management technique that:

reducesX

The factual statements of the insured upon which an insurance policy is based are called:

representations.

Jared hopes to purchase a new insurance policy for his car, but he has an extremely poor driving record. The insurance company decides to issue Jared an insurance policy, but charges him a premium much higher than the average driver. The insurance company is practicing:

risk retention.X risk avoidance.X

In an insurance policy, the summary of what the insurer will do in the event of a covered loss is called:

sectionX

In a BOP, the purpose of Supplementary Payments in conjunction with liability coverage is to:

settlement was paid.X

John moved out of his house and put it up for sale three months ago. While he was waiting for the house to sell, John's plumbing pipes froze and burst in the icy temperatures, which eventually led to water damaging the cabinetry and hardwood floors. Which of the following statements would most likely be TRUE?

so this loss would not be covered.X HO-3, the damage would be covered.X

A CGL can provide liability insurance coverage for all of the following persons, EXCEPT:

sole proprietors.X volunteers.X

A ___________ is a law set forth by a governing body such as a state or city.

statutory law

As a requirement for getting her New York adjuster license, Alice is required to submit proof of bonding with her application. She purchases a surety bond from PBJ Bonds. In this contract, PBJ Bonds would be considered the:

surety.

Disability payments through workers' compensation insurance are primarily based on:

the employee's average weekly wage.

In a Personal Auto Policy, the term "family member" would include:

the named insured's 26-year-old son who lives at home.

Veronica owns a pottery business and is insured under a commercial property policy. She was in the process of building an extra structure for the sole purpose of kiln firing her pottery, but after 40 days of waiting for it to be completed, she moved her business to a new location without any intention of moving back. Her Builder's Risk Coverage Form was terminated because:

the property is abandoned.

In the case of condominiums:

the unit owner and condo association share responsibility for insuring the property.

In a BOP, the General Aggregate Limit is:

twice the per occurrence limit.

When a flood inundates Paul's property, it causes $190,000 in damage to his home and $18,000 in damage to his detached garage. Paul has a Dwelling Form flood policy with a $200,000 limit. How much coverage should Paul use for his garage if he wants to have enough coverage to repair his home completely?

under Coverage A.X

An insurance contract is an agreement between two parties where each side promises to be truthful, factual, and honest about their respective positions. Therefore, an insurance contract is said to be a contract of:

utmost good faith.

After a loss covered under a dwelling policy, Ordinance or Law coverage pays for:

value of the property.X by the government.X pollutants.X

Which of the following would NOT be covered under Part A of a Personal Auto Policy?

wagesX friend's carX

Which of the following losses would be excluded from coverage under a Personal Articles Floater?

way to the buyer.X

A dwelling policy would NOT be appropriate for:

wholly rented out.X owned by a corporation.X

Coverage B of the BOP would provide indemnification for damages to all of the following except:

windows.

Which of the following statements regarding Commercial Package Policies (CPP) is TRUE?

with a CPP.X

Mark is a college student and frequently needs to either rent a car or borrow his friend's car. Although he doesn't own a car of his own, he wants to buy himself some liability coverage that would apply whenever he drives someone else's car. Which coverage should Mark get?

No-Fault CoverageX Vehicle CoverageX

Gail's restaurant is doing more business than ever, so Gail decides to add more dining space. Three weeks into the project, a hurricane blows through town, reducing the new construction to rubble. Gail maintains commercial property insurance coverage valued at 70% of her property's replacement cost, although her policy says she must maintain at least 80% to be fully insured. Which coverage on her policy could pay to rebuild her restaurant at replacement cost?

None

Helen's business is growing rapidly, so she decided to add an annex onto her office and hire another worker. While under construction, a storm blows down most of the annex structure, forcing Helen to restart from scratch. Her commercial policy provides insurance coverage equal to 75% of the property value, despite the fact that her policy requires 80% coverage to be fully insured. Which coverage extension could help Helen rebuild at replacement cost?

None - Extensions are only available if the policyholder maintains the minimum level of insurance of 80% to value

Craig is just starting out with his business. He needs an insurance policy to cover his liability against any unknown defects within his products. Of the four types of CGL policies listed below, which offers the best coverage for Craig's business, regardless of when a claim is filed?

Occurrence Policy

Surestep Insurance Co. calculates that it needs to charge Elwood a higher premium for his auto policy. Which of the following statements is TRUE?

Once Elwood receives notice of this change from his insurer, he may keep his policy in force by paying the extra premium within 10 days.

Which of the following is NOT true of Personal Injury Protection?

PIP is usually secondary coverage.

Which of the following is NOT a division within the Department of Financial Services?

Parks and Recreation

Babette crosses the street and is struck by a car, causing her to sustain injuries in the amount of $45,000. The driver has minimum coverage. Which coverage section of Babette's auto policy could help pay for her medical costs?

Part B: Medical Payments

In Ocean Marine insurance, this clause appropriates the loss to one company, rather than spreading the loss among all cargo owners.

Particular Average

Craig must close his business for three months after being injured in an auto accident. When Craig recovers, he returns to his shop where he finds broken glass and notices some of his supplies have been pilfered. Under what condition in his commercial property policy might the insurer deny coverage?

PaymentsX

Which of the following insurance protections is NOT offered by a garagekeeper's insurance policy?

Personal injury protection

Sarah suffers acute back pain. Not satisfied with the specialists in her own network, Sarah elects to see a back specialist outside the network established by her healthcare provider. Her healthcare provider pays the amount that the same appointment would reasonably have cost with an in-network specialist, and Sarah has to pay the additional costs out of her own pocket. Which type of healthcare provider does Sarah belong to?

Preferred Provider Organization

Jimmy owns a pawn shop which brings with it a certain amount of risk. He decides to hire a security guard, and install a surveillance system and an alarm system to reduce his monthly premiums on his commercial property policy through the:

Protective Safeguard endorsement.

Rachel is filling out an application for a homeowners policy. She is truthfully answering the questions regarding her home's location, size, age, etc. Which of the following is a true statement?

Rachel is providing representations.

According to the "Definitions" section of a Personal Auto Policy, which of the following is NOT "occupying" her vehicle?

Rachel leaves her cat in her car, with the windows cracked, while she goes into the drugstore to fill a prescription.

Which of the following people committed soft fraud?

Rafael accidentally slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle, he claimed he had back and neck pain when he sued the supermarket in an effort to get more money in the settlement.

Which of the following is not one of the employer's duties if injury occurs?

Remain with the injured employee until emergency assistance or a family member arrives

The coverage limit in Bob's commercial property policy goes up 2% every time the policy renews. Which optional coverage might Bob have included as part of his insurance package?

Replacement CostX

Don works as an adjuster for ABC Insurance. Which of the following is most likely NOT one of Don's responsibilities?

Represent the insured if a claim goes to court

After Tony, the owner of XYZ Cleaners, accidentally starts a fire, XYZ Cleaners burns to the ground, taking all the garments with it. Afterwards, Tony has to rent a new building and purchase new equipment and supplies. He is also responsible for all the clothing that was in his care. Which type of coverage in his commercial property policy could help Tony with the cost of paying for his customers' destroyed clothing?

Risk CoverageX

Which endorsement to the Commercial Crime policy would protect a bank against its legal liability for burglary, robbery, destruction, or damage to customers' belongings kept in safe deposit at the bank?

Safe Depository

Samantha, an agent for NED Insurance, routinely misrepresents policy provisions or fails to bring them up at all in her sales discussions with potential clients in an effort to make more sales. All of the following statements are likely true, EXCEPT:

Samantha is fulfilling her fiduciary duty to NED Insurance by selling more policies.

Veronica owns a pottery business and is insured under a commercial property policy. She was in the process of building an extra structure for the sole purpose of kiln firing her pottery when a massive storm came through and blew down all the scaffolding, which added additional cost to the construction project. Which coverage extension of the Builder's Risk Coverage Form would cover the scaffolding?

Scaffolding, Construction Forms, and Temporary Structures

Monica's husband, Sam, likes to buy her expensive jewelry, and she has amassed quite the collection over the years. What endorsement would Monica and Sam need to add to their homeowners policy to fully cover Monica's jewelry collection?

Scheduled Personal Property

Shelly has been suffering from chronic headaches for over a year. She is sure that there is something medically wrong, despite what the doctors in her network have told her. So, she decides to visit a doctor that her friend recommended, even though he charges more and is not in Shelly's approved network. Shelly's insurer paid for the cost of the appointment up to the amount she would have reasonably been charged by an in-network physician, and Shelly was responsible for paying the remaining balance. Which type of health insurance plan does Shelly have?

Service planX

In which case would the insured be indemnified by her auto liability coverage?

She has to pay a fee to retrieve relevant court documents.

What is a binder?

Temporary coverage for an insurance applicant until the policy is issued

Which of the following would NOT affect the rating for comprehensive and collision coverage on a vehicle?

The color of the vehicle

Jared recently purchased a 25 foot watercraft with a 250 horsepower motor. While cruising on the lake, he accidentally runs into Gary's boat, causing $2,500 in damage to Gary's hull. How will Jared's insurer respond when Gary files a claim against Jared's homeowners policy for the damage he caused?

The insurer will deny the claim because Jared's boat is excluded from his liability coverage

After a rain storm, Nancy realizes that she left her bedroom windows open the entire time. Now there is extensive water damage to her area rug and furniture, and the laptop that had been sitting on her desk is ruined. Nancy has a Broad Form homeowners policy, so she calls her insurance company and files a claim. What is the likely result of Nancy's claim?

The insurer will not cover any of the damage, since Nancy left the windows open.

All of the following are universal exclusions in a Commercial Crime policy, EXCEPT:

Theft of money or securities outside the insured premises in the care of a messenger.

Which of the following would NOT be covered under the Comprehensive section of a PAP?

TheftX

Craig has a poor driving record. He lives in Florida, has a valid driver license, and has registered his car, but due to his history, he is unable to obtain auto insurance through the private market. According to state law, Craig must have liability insurance in order to drive on public roads. How will Craig be able to purchase coverage?

Through the Florida Automobile Joint Underwriting Association

Which of the following statements regarding health insurance is TRUE?

To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers.

Which of the following is NOT a purpose of insurance regulation?

To prohibit insurance-rating

Which of the following is NOT a reason to purchase umbrella liability coverage?

To reduce your insurance costs

Which of the following would be considered an Instrumentality of Transportation and Communication?

TruckX

Randy runs a business where he takes on the possessions of others and transports them from one location to another in exchange for a fee. What type of occupation does Randy have?

Trucker

Which of the following is similar to a Business Auto Policy, but adds several policy provisions and protections specific to the trucking industry?

Truckers policy

Greg, an agent for ABC Insurance Brokers, is trying to sell a new policy to Sally. Sally, however, is perfectly happy with her current policy and has no intention of cancelling it. Greg tells Sally that upcoming legislation is set to increase the minimum requirements for insurance, and that her current policy will not be available once the bill passes. He fails to tell her that if her policy is already in effect, this legislation won't affect her insurance. Which unlawful or unfair practice is Greg guilty of?

Twisting

When a faulty electrode in a children's toy is recalled by ABC Toymakers Inc., it is a costly endeavor. Especially since ABC Toymakers Inc.'s base insurance policy doesn't cover product recalls. Which excess liability coverage could help pay for losses associated with the recall?

Umbrella Policy

In a dwelling policy, how much will the Fire Department Service Charge coverage pay?

Up to $500 if the fire department charges for responding to a covered peril

Which of the following is NOT a feature of a typical Business Owners Policy?

Usually Actual Cost Valuation

Which of the following BEST describes the insurance provided by residual market insurance programs?

Usually a "last resort" form of insurance

What BOP endorsement would cover a company's lost business income and extra expense due to loss of electrical service?

Utility Time Element

Insurers often protect themselves from providing insurance to people who are already ill by inserting which type of clause into a health insurance contract?

Waiting period

Which of the following perils is excluded from coverage in a National Flood Insurance Program policy?

Water-main breakage

A typical workers' compensation policy combines two basic forms of coverage. They are:

Workers' Compensation and Employers Liability

Which of the following lines of coverage could be found in a Commercial Package Policy?

Workers' Compensation insuranceX Auto insuranceX

Phil owns a public pool. One day, Phil has an altercation with a woman visiting the pool. Phil doesn't like the way she looks, so he tells her that she has to leave the premises right away. The woman takes Phil to court for violating her civil rights. This is an example of what type of personal injury covered under Phil's Commercial General Liability policy?

Wrongful Eviction

Which of the following insurers is NOT engaging in an Unfair Claims Settlement Practice?

XYZ Insurance Company owns its own auto repair shop and sends policyholders' cars there to be repaired.

XYZ Insurance is a private insurer that sells flood insurance policies. Which of the following statements is FALSE?

XYZ Insurance participates in the NFIP Direct Program.

Sally has an HO-3 policy on her $150,000 home in the country. One day, a bear breaks down Sally's back door to get into her kitchen for a snack. When Sally comes home to find the damage, she files a claim with her insurance company. Will the damage to Sally's home be covered, and why or why not?

Yes. The HO-3 is an open-peril policy, without an exclusion for wildlife.

Bill works for an alien insurer operating in Florida. His company began business overseas and follows all applicable Florida laws. In order to operate his business in Florida, in addition to following all the state's insurance laws, Bill's company must also possess:

a certificate of authority.

The "Consent to Settle" clause in the Professional Liability policy is best described as:

a clause that requires the insurance company to get approval from the insured before settling a claim.

An injured employee's PPI rating (or Impairment rating) is NOT:

a doctor.X

Edward is a member of the Knights of Columbus, a religious group dedicated to voluntary service to the benefit of society. He also recently purchased a $100,000 life insurance policy from the organization. This was possible because the Knights of Columbus is:

a reciprocal insurer.X

Josephine has purchased a Business Owners Policy. She insures both the real and personal property at 80% under the policy. Assuming no endorsements apply, the losses will be adjusted on a(n) _______________ basis.

actual cash valueX

Thomas Building is asked by the local youth center to build a gym for the local community. As a condition of their contract, Thomas Building must secure a surety bond. Thomas Building finds ABC Surety Bonding and works out a suretyship for the project. Thomas Building gets Williams Construction Finance to co-sign on the bond, as required by ABC Surety Bonding. William's Construction Finance would be called:

agent.X

Participation in the Florida Automobile Joint Underwriting Association is mandatory for:

all insurers who can sell auto insurance in Florida.

One day, a customer at Jim's Tire Sales was severely injured when a rack of tires collapsed and fell on her. Later, the customer filed a lawsuit against Jim for $750,000. Jim has a commercial general liability policy, but the limit for this type of loss is only $500,000. Not wanting to use his entire limit on this one claim, Jim tries to use his excess liability policy first, which has a limit of $1,000,000, so he can retain most of the aggregate limit in his base policy. Unfortunately for Jim, this is not possible because:

an excess liability policy pays only after the base policy's limit has been exhausted.

A fidelity bond covers:

an insured business for loss resulting from any dishonest acts committed by its bonded employees.

The Insurance Guaranty Association is a mechanism that covers claims in the event of:

an insurer's insolvency.

A reciprocal insurer is

an unincorporated organization of subscribers that operates through an attorney-in-fact to provide insurance benefits for its members.

In a Commercial Crime policy, a "messenger" is defined as:

another location.X inside the premises.X

The Office of Insurance Regulation:

approves insurance forms.

In a garagekeepers policy, PIP coverage is:

available with an endorsement.

A stand alone excess liability policy:

base policy.X personal liability.

Bill has experienced a loss covered under the Business Income and Extra Expense coverage in his Equipment Breakdown Protection Coverage Form. When does the period of restoration begin?

breakdown occurredX

Sam's Ocean Marine hull policy has a franchise deductible of $50,000. When Sam's ship suffers $75,000 in damage after being overtaken by pirates, how much indemnification can Sam expect to get from his insurer?

$25,000X

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a per occurrence limit of $250,000, what is the maximum that ABC's insurer will pay for Jerome's injuries?

$250,000

Sam, who has a typical HO-3 policy, is forced to evacuate his home by civil authorities due to rising flood waters in his neighborhood. It takes a month before Sam is allowed to come back to his home. During this time, he has spent $3,000 in hotel expenses, on top of his monthly mortgage payment of $850. When he files a claim, how much will Sam receive under Coverage D - Loss of Use?

$3,850X

Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy has liability limits of 25/50/10. Everyone involved in the accident has minimum PIP coverage for Florida. How much will the primary policy pay for the injuries?

$30,000

Bill's new home is in the final stages of construction, and he has purchased an HO-2 policy to insure his financial interest in the property. This morning, Bill's contractor calls to tell him that an electrical fire has destroyed his new kitchen, and all of the crown molding that was supposed to be installed today has been stolen. It will be $15,000 to rebuild the kitchen and another $4,200 to replace the trim. How will Bill's insurer respond when he files a claim?

$4,200X under construction.X

Noreen is a professional photographer, and she has a Personal Articles Floater that covers her best camera for up to $6,000. While she is working a wedding, the camera gets knocked into a pool and is ruined. Before the accident, her camera was worth $5,000, but a new, comparable one would cost her $7,000. How much will Noreen's PAF pay her for this loss?

$5,000

While Andrea was grocery shopping in BB Mart, the large Dairy sign fell off the wall and landed on her. Because of her extensive injuries, Andrea sued BB Mart and was awarded $375,000 in damages. BB Mart's Commercial General Liability policy has a general aggregate limit of $1,000,000 and a per occurrence limit of $300,000. What is BB Mart's general aggregate limit after the claim for Andrea's injuries is paid?

$700,000

A fire in Sarah's factory causes her to shut the factory doors for 50 days. To limit her loss of income and keep production going, Sarah spends $125,000 renting equipment and another building. Sarah's commercial property policy doesn't have Business Income Coverage, but it does include Extra Expense Coverage. The limit on her Extra Expense coverage is $100,000 and she has Limits of Loss Payment of 40%/80%/100% during her period of restoration. How much indemnification will Sarah receive for her extra expenses?

$80,000

With respect to Inland Marine insurance, a "Block" policy (such as a Jewelers Block policy, or a Furriers Block policy) is an example of:

a Personal Property Floater.X

Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try out the new chair. While leaning back, the chair breaks and Grace injures her neck. She sues XYZ Furniture and is awarded $300,000. The costs for the legal defense come to $45,000. XYZ Furniture's CGL policy has a Products-Completed Operations Aggregate limit of $750,000, with a per occurrence limit of $250,000. How much will XYZ Furniture have to pay out-of-pocket for this claim?

$95,000X

In Florida, every driver must have $10,000 in property damage liability coverage and $10,000 in PIP in order to operate a motor vehicle. If the driver is in a wreck and is found to be at fault, how much liability coverage must the driver have for total bodily injury per accident?

20,000

Mark is driving along and looking for an address on the East side of Walker Street. As he squints to see the numbers posted on the buildings, he plows into the back of a car waiting at a stoplight. Both the driver and the passenger of the struck car are injured. The driver suffers $60,000 in bodily injury, the passenger suffers $55,000 in bodily injury, and the vehicle Mark hit sustains $30,000 in damage. Mark has liability coverage with split limits of 50/100/25. How much will Mark be responsible for out-of-pocket after this accident?

20,000

Dr. Jones' current occurrence malpractice policy is in effect from July 1, 2005 through July 1, 2006. Which lawsuit would trigger this malpractice insurance policy?

2004.X

What requirements must Wholesalers and Distributors meet in order to be eligible for a BOP?

25% or less of floor space is available to the general public, and less than 25% of gross income may come from retail sales.

Kelly took her eyes off the road and ended up smashing into the back of a passenger van. All five passengers were injured, and each one ended up with $25,000 in medical costs. Assuming Kelly has liability coverage with limits of 50/100/50, how much will she have to pay out of pocket?

25,000

Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy has liability limits of 25/50/10. How much will the primary policy pay for the injuries?

30,000

Anton is purchasing homeowner's insurance for his new house. He wants to make sure his policy offers the BEST coverage available. Which policy should Anton choose?

3X

Which of these statements about foreign insurers in Florida is TRUE?

A foreign insurer can usually only issue insurance to someone who was denied coverage by domestic insurers.

Which of the following best describes a Fraternal Benefit Society?

A fraternal benefit society is a social organization based around common interests and beliefs.

A fire burns down Jenny's Hardware, leaving virtually nothing salvageable. Which of the following items would NOT be covered under Coverage B of the Building and Personal Property Coverage Form in her commercial property policy?

A paint mixer permanently affixed to the floor

Which of the following is NOT considered a covered theft in a Commercial Crime policy?

A periodic assessment of inventory reveals that 4% of a store's inventory is inexplicably missing.

Which of the following is NOT eligible for Dwelling coverage?

An 8-unit apartment building in which the owner resides

A fire burns down Jenny's Hardware, leaving virtually nothing salvageable. Which of the following items would NOT be covered under Coverage A of the Building and Personal Property Coverage Form in her commercial property policy?

An employee's laptop which she uses for work

Which of the following is NOT true about Citizens Insurance?

Citizens does not insure any type of commercial property.

Craig is just starting out with his business. He needs an insurance policy to cover his liability against any unknown defects within his products. Of the four types of CGL policies listed below, which offers the best coverage for Craig's business, regardless of when a claim is filed?

Claims-Made PolicyX

On January 27, 2004, Ryan was using an exercise bike from NusquamCycle when the chain broke, causing him to fall and bruise his knee. Seven years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration was probably caused by his bruise from the exercise bike. Assuming NusquamCycle is no longer in business, which CGL policy would cover Ryan's claim filed on January 25, 2011?

Claims-Made policy from Jan 1 2003-Jan 1 2004 with a supplemental extended tail

Jay's Chip Factory makes potato chips, and it gets chip bags from Bags, Inc. One day, the bag-making machine at Bags, Inc. broke down, and thus, Jay's Chip Factory couldn't get the bags it needed to bag its potato chips. Jay's Chip Factory had to shut down production temporarily while waiting on Bags, Inc. to fix their machine. Jay's lost business income may be covered under what coverage in its Equipment Breakdown Protection Coverage Form?

Contingent Business Income and Extra Expense

John, a contractor, just purchased a new backhoe and wants to get an insurance policy to cover it. He's looking for a policy that will provide coverage not only on the job site, but also while transporting it back and forth between sites. What type of inland marine insurance policy would likely fit John's needs?

Contractor's Equipment floater

Sarah is playing with a basketball on the stairs at Bob's house. In doing so, she trips, falls, and breaks her leg. She files a claim against Bob's insurance company for her injuries. The adjuster determines that Sarah was 50% partially responsible for her own injuries, and therefore should only receive indemnification for 50% of her medical bills. What defense of the claim is the adjuster using?

Contributory negligenceX

Larry owns a restaurant downtown and employs his cousin Vinny as one of the line cooks. Vinny is a rather careless individual, and one night he leaves the stove on, leaking gas throughout the kitchen. When the ice machine turns on, it sparks a massive explosion. Which condition in Larry's commercial property policy indicates that he may be covered for this loss?

Control of Property

Phil runs a locomotive repair business, which is insured under a commercial property policy. One night, some blasting powder is accidentally ignited and blows a crowbar through one of the engines. No one is hurt, but the locomotive is severely damaged. Which coverage option may help cover the cost of repairing the engine from this unfortunate event?

Cost CoverageX

In a homeowners policy, Coverage B - Other Structures provides insurance for which of the following?

Detached garages

Jim drops his car off at ABC Garage to have his exhaust system repaired and takes the train to work. When he returns, he finds that his car has been vandalized. Jim has comprehensive coverage, but feels the garage is responsible for the damage since Jim entrusted the car to ABC Garage. Which coverage type under ABC's garagekeepers policy would cover any part of the loss that Jim's policy does not cover?

Direct Excess Coverage

Jim drops his car off at ABC Garage to have his exhaust system repaired and takes the train to work. When he returns, he finds that his car has been vandalized. Jim has comprehensive coverage, but feels the garage is responsible for the damage since Jim entrusted the car to ABC Garage. Which coverage type under ABC's garagekeepers policy would split the cost of the loss with Jim's own insurer without placing blame on ABC Garage?

Direct Primary Coverage

Which of the following was NOT a major benefit of The My Safe Florida Home Program?

Disaster preparedness education

Which of the following would be covered under Coverage A in a dwelling policy?

Gas furnace in the basement

This agent works for only one insurer, and supervises and trains other agents.

General Agent

This agent is a salaried employee who sells insurance products for only one insurer.

General AgentX Captive AgentX Exclusive AgentX

This provision in Ocean Marine insurance obligates insurers of various interests to share the cost of losses associated with a captain's decision to voluntarily sacrifice a part of the ship or its cargo.

General Average

Strong winds have torn a hole in Janet's roof. On top of that, heavy rain is expected in her area in the next few days. Figuring it would simply be too much effort to put a tarp over the hole in her roof, Janet elects to do nothing. The rains come and destroy several of her possessions inside her home. Janet files a claim with her insurer for the losses, but it comes back denied. This is because:

Janet failed to make a reasonable effort to protect the property from further damages.

Nancy and Drew borrow Joe's car so they can have a picnic at the old water tower. On their way to the picnic, Drew accidentally rear-ends Mr. Jackley, causing $2,900 in damage. Whose liability insurance will pay first for the damages?

Joe's

When Emma's house was burglarized, the thieves stole several pieces from her art collection. Although the pieces were only prints, Emma files a claim stating that they were originals, and therefore worth a good deal more than they really are. What has Emma committed?

Soft fraud

Which financial institution bond is designed for all types of insurance companies?

Standard Form 23X

Which of the following is an example of how some insurers are fighting back against insurance fraud?

Starting fraud busting units staffed with former detectives and police officers

Which of the following is NOT a rating factor for a personal auto liability policy?

The condition of the vehicle

In order for the contents of a home to qualify for flood insurance protection, which of the following conditions must be met?

The contents must be located in a fully enclosed building.

When is a self-insured retention applied in an umbrella policy?

When the umbrella policy covers a loss that is excluded by primary policies

Florida law requires all Medigap insurance policies to have a "Free Look Period," which means that:

charging premiums.X

Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for?

engine malfunction.X another vehicleX

The insuring agreement for Part A-Liability in a personal auto policy states that:

even after the policy limit is reached.X

Which of the following would be covered under the peril of "theft" in an homeowners policy?

non-insuredX under constructionX

As a requirement for getting her New York adjuster license, Alice is required to submit proof of bonding with her application. She purchases a surety bond from PBJ Bonds. In this contract, PBJ Bonds would be considered the

obilgee.X

XYZ Films is getting ready to shoot a new Western film. As with most film productions, XYZ Films uses a surety bond from ABC Bonds to help protect the distributor's financial investment in the movie. Because of the magnitude of the budget for the film, ABC Bonds has XYZ Films secure a/an _____________ to act as a co-signer.

obligeeX suretyshipX