Florida 4-40 Customer Representative (CIR) License - English

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

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?

$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?

$1,500

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

the employee's average weekly wage.

In a BOP, the General Aggregate Limit is:

twice the per occurrence limit.

In order to qualify for an insurance policy, Lydia's Fine Jewels must agree to have a security guard on the premises 24/7. This is called a:

warranty

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.

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?

Non-Owner

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

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

PIP is usually secondary coverage.

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

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

James is walking down the street when Andrea, an uninsured motorist, strikes him with her car. James suffers $12,000 in injuries from the accident. He has personal injury protection of $10,000 from his own automobile insurance policy, which immediately pays him the full amount. By accepting $10,000 from his own insurance company, James has waived the right to sue Andrea for more than _____ for personal injury.

$2,000

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

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?

$22,500

Greta's Ski Supply is covered under the Building and Personal Property Coverage Form with limits of $50,000 for business personal property and $100,000 for the building. The policy also has a $500 deductible. When a tornado tears through the vicinity, the store suffered $10,000 in damage to the building and $20,000 in losses to the contents. In addition, Greta has to fork out an extra $1,000 for debris removal. How much will Greta receive from her insurer?

$30,500

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

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

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

Jesse's home is worth $200,000 and he has a homeowners policy with a $160,000 limit. After a covered loss, Jesse is left with a total of $10,000 in damages. Assuming the insurer requires the standard 80% level of insurance for coinsurance purposes, and ignoring any deductibles, how much will Jesse receive in indemnification?

10,000

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?

10/20/10

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

The open enrollment period for a Medicare Supplement policy starts when a person turns ____ and enrolls in Medicare, and lasts for ____.

65; 6 months

Which of the following is TRUE concerning a Business Owners Policy?

A business owners policy offers liability protection.

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

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

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

A rat slipped inside a golf bag before it was packaged for shipping and chewed several holes in the bag before it arrived at its destination.

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

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

All employees are bonded for the same aggregate amount.

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?

Although John's house was still covered under an HO-3, the damage would not be covered because he didn't shut off the water supply.

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 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.

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

Which of the following is NOT excluded from coverage under a Mechanical Breakdown Insurance policy?

Breakdown due to the cracking of an engine block

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

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?

Cost and Freight

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 situations does NOT involve an insurable risk?

Dale just bought 30 shares of a hot new startup company online.

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

Damage to the land

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

Direct Writer

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

Disaster preparedness education

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.

Which of the following may be covered under a DP-3?

Earthquake

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 the "Follow Form" in excess liability coverage?

Excess liability insurance that "follows" the base insurance policy to the letter

Which statement BEST describes Umbrella coverage?

Excess liability insurance that can also provide additional coverages not provided by the base policy

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?

Extra expense coverage

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

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?

Fiduciary bond

Which of the following may be covered under a DP-3?

Flood

Which of these statements is true?

Flood insurance is always backed by the National Flood Insurance Program.

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?

HO-5

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

IIPPA

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

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

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 statement about the Federal Employers Liability Act is TRUE?

It protects only interstate railroad workers and their families.

Joshua, a customer representative, is discussing policy details with his client, Barbara. While reviewing the current policy, Joshua notices an important gap in Barbara's coverage that could leave her open to significant financial loss. However, because Barbara does not mention it, he decides not to bring it up for discussion. Which of the following is TRUE?

Joshua's action is unethical because he is not using his knowledge and skill to provide the best service to meet Barbara's needs.

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

Lawyer

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?

Legal Liability Coverage

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

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?

Miscellaneous Vehicle Endorsement

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 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

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

Standard Form 25

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?

Symbol 8

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

The building is accepted by the purchaser.

In which of the following situations is an insurer justified in waiting more than 90 days after receiving proof of loss forms to pay a claim?

The claimant has been unwilling to cooperate in the settlement process.

A power surge sparks a small electrical fire in an office building. The electrical fire triggers the automatic sprinkler system. The water from the sprinklers soaks the carpets and shorts-out all the computers, causing thousands of dollars in damage. What is the proximate cause of the loss?

The power surge

Kate has a Personal Auto Policy through XYZ Insurance. In which of the following scenarios would XYZ Insurance NOT be allowed immediately to increase Kate's policy premium?

XYZ Insurance expands coverage for all policies - a change which automatically applies to Kate's policy, as well.

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.

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.

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 fraternal benefit society.

Liability coverage in a BOP is provided on:

an occurrence basis, only.

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.

apparent authority

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:

disease transmitted from the insured to a third party is excluded.

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

compulsory

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

customers

States that require all businesses to purchase workers' compensation insurance are called:

elective

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.

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.

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.

insured contracts

Residual market insurance programs are funded by:

insurers and their policyholders.

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.

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 commercial contractor

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 commercial contractor.

For loss settlement purposes, most homeowners policies:

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

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

rates that are 50% higher than voluntary market rates.