Insurance Licensing Exam

incurred losses by its earned premium

An insurance company's loss ratio is determined by dividing the insurer's:

up to $100,000

Danny is driving several children to school in his minivan when it is struck by a dump truck. Two children are killed. An investigation concludes that Danny is at fault. His PAP has $50,000 medical payments limit. How much will the insurer pay for two funerals?

at least 20 days

How much advance notice must an insurance company give its policyholder if it does not intend to renew a personal auto policy?

Notify the insurer in writing of her intent to cancel the policy

In an attempt to reduce her expenses, Mattie sells her car. What must she do to cancel her auto insurance policy?

masonry veneer

Ken's house has an exterior layer of brick that covers wooden walls supported by wooden 2x4 studs. What type of construction does Ken's house have?

A. loss cost date B. margin for profits and contingencies C. competitors' rates D. expenses C**

Property and casualty insurance rates are based on all of the following components EXCEPT:

Issuing rues and regulations to administer the insurance laws

What are the responsibilities of the Office of Insurance Regulation and Department of Financial Services?

actual cash value

"Replacement cost minus physical depreciation" describes which type of loss valuation method?

3

A diligent effort to find coverage for a risk in the admitted market means receiving a rejection from how many different insurers?

A. Makes a liability claim under another policy B. Has been added to the named insured's family during the policy term C. Makes false statements with respect to the insurance D. Is not a legal citizen of the US at the time of loss C**

A homeowners insurance policy does NOT provide liability coverage for anyone who;

Cert of Authority

ABC Insurance wants to become licensed in FL to sell insurance products. Which of the following must it receive in order to transact insurance?

A. a trailed attached to a lawn tractor B. a lawn tractor C. a bicycle D. a self-propelled snow blower C**

According to the "motor vehicle" definition in Donnell's homeowners insurance policy, which would NOT be considered a motor vehicle?

File an appointment application with the Department of Financial Services

Acme Insurance Company wants to employ Anthony as an agent. To do so what must Acme do?

$4,500 The PAP will pay the lesser of the actual cash value of the stolen property, or the amount required to replace the damaged property with other property of like kind and quality.

Cheri's car is stolen. The car has an actual cash value of $5,000. She wishes to replace it and locates three similar cars for sale at $4,500, $5,000, and $5,500. How much will the insurer pay for her loss?

A. A US cargo ship is attacked by pirates and suffers losses of $6 milllion. B. A bombing at the US embassy leads to damages of $80 million. C. A crew's negligence causes a passenger train to derail in CA, resulting in losses of $12 million. D. A US manufacturing plant is sabotaged, resulting in a loss of $310 million. D** To be covered under TRIA, an act must be intentionally violent or dangerous to human life, property, or infrastructure; have resulted in damage within the US, to an air carrier, to an US flag vessel, or on the premises of a US mission such as an embassy or consulate and produce a total losses of OVER $200 million.

Which of the following incidents would be covered under the Terrorism Risk Insurance Act?

Insuring Agreement

A statement in an auto policy that reads: " We will pay damages for Bodily Injury or Property Damage for which any insured becomes legally responsible because of an auto accident" is from which standard policy provision?

A. computer B. jewelry C. fine arts D. buildings D** Buildings are a fixed location

According to the Nationwide Inland Marine Definition, inland marine insurance may be used to cover all of the following EXCEPT:

A. lightning B. texting while driving C. windstorm D. theft B** a peril is a cause of loss. Texting is a hazard because texting increases the likelihood of a Collison.

All of the following are perils EXCEPT;

Family, Friends, or a primarily a personal contract

An agent will violate the prohibition against controlled business is she sells most of her insurance polices to whom

A. selling unregistered securities B. violating the Florida Code of Ethics C. demonstrating untrustworthiness when transacting insurance D. paying commissions to a licensed agency D**

An agent's license can be suspended or revoked for all of the following reasons EXCEPT;

Basement of his home, Bernard's cemetery plot, and his dorm room he occupies while enrolled in summer courses. His downtown office space would NOT qualify.

Bernard's homeowners insurance policy refers to an "insured location" Which locations would qualify as an insured location?

All-lines public adjuster

Blaine is a self employed, licensed insurance adjuster who represents the insured during the claims process. Insured individuals or businesses hire Blaine to help them negotiate claim's settlements. What type of adjuster license does Blaine hold?

$55,000 The insurer will pay the $25,000 per person limit for the first injured occupant's claim, $20,000 for the second injured occupant's claim, and the $10,000 property damage limit for the damage to the auto for a total of $55,000

Brittany is responsible for an auto accident involving another car which will cost $15,000 to repair and for which the two injured occupants of that vehicle were awarded damages in the amounts of $30,000 and $20,000, respectively. Brittany's split limit policy has liability limits of 25/50/10. How much will her insurer pay?

The applicant is demonstrating adverse selection

Carol owns a sports car and has received numerous tickets for speeding. She submits applications to buy auto insurance from several auto insurance companies, but none has accepted her application because..

A. River Bank will buy an insurance policy that protects its interest in Don's home. B. River Bank has an insurable interest in Don's home C. River Bank is the mortgagee or mortgage holder. D. Don's house serves as collateral that secures the mortgage loan. A**

Don is buying a home with a 20% down payment and a mortgage from River Bank. All of the following are true EXCEPT;

5 to 20 percent of the insured value

Earthquake deductibles for direct property insurance damage are usually expressed as a percentage of the structural value, usually ranging from;

make a counteroffer

Esther, an underwriter for QRS insurance company., is not able to provide the coverage requested in Ben's insurance application. Esther can reject the application or she can;

Includes; Gramm-Lech-Bliley Act, Federal Trade Commission Act, and Health Insurance Portability and Accountability Act. DOES NOT INCLUDE: McCarran-Ferguson Act (grants states principal jurisdiction to regulate the insurance industry)

Federal legislation which protect privacy of information relevant to insurance transactions include all of the following except..

C The McCarran-Ferguson Act of 1945 granted states with principal jurisdiction to regulate the insurance industry

Federal legislation which protects privacy of information relevant to insurance transactions includes all of the following EXCEPT A Federal Trade Commission Act B Gramm-Leach-Bliley Act C McCarran-Ferguson Act D Health Insurance Portability and Accountability Act

Wind Mitigation measures (credits)

Florida law requires insurers to provide premium credits or discounts for ________________ on property insurance polcies.

It excludes coverage even if a weather-related peril like rain leads to a mudslide.

Heavy rains cause a mudslide to weaken the foundation of Amy's home, which is insured under a DP3 policy in which mudslide in an excluded peril. How will the weather conditions exclusion in the policy treat the damage to the home?

At least 10 days

How much advance notice must an insurance company give its policyholder before it cancels a personal auto policy?

be charged the same premium rate

If a group of insureds are rated by class, they will

60 days

If an auto insurance suspects fraud in a claim investigation, how many additional days can the insurer have to complete the investigation?

only communities that participate in the National Flood Insurance Program

In which of the following communities would the National Flood Insurance Program make flood insurance available?

Utmost Good Faith

Insurance can only work when the parties to the contract are completely honest with each other. That's why insurance contracts are what kind of contracts?

A speculative risk a new business may succeed for fail, making it a speculative risk which is not insurable. Only pure risks are insurable

Insuring a new restaurant against business failure is not possible because success or failure is;

$1,500

Jan's diamond ring is scheduled on the Scheduled Personal Property Endorsement attached to her homeowners policy. The diamond falls from its setting and is lost. The scheduled amount for the ring is $2,000. The stone can be replaced for $1,700. A new, identical ring would cost $2,500. At the time of the loss, the ring's actual cash value was $1,500. In this loss, what will the insurer pay?

reject a claim

Joel renews his homeowners insurance policy Jan. 15. He sells the house to Sandy on March 15. One week later a fire destroys the house. Joel makes a claim on the policy for the loss of the house. What will the insurance company do?

Nothing Karen will not pay a deductible on a second claim. Hurricane deductibles apply annually, and she already satisfied her deductible with the first claim

Karen's home is insured for $300,000. The home is heavily damaged by a hurricane and she pays her 2 percent deductible of $6,000. A second hurricane causes additional damage for a loss of $10,000. How much, if anything, will Karen pay for the deductible on her second claim?

$300,000/$900,000

Kerry insures three vehicles under his policy. All three vehicles have uninsured motorist coverage of $100,000/$300,00. Kerry pays for stacked UM coverage. In the event of an UIM claim, what limits are available to Kerry?

D Strict (absolute) liability is used to assess liability for injuries caused by activities that are by their nature dangerous, such as keeping wild animals in captivity. Under strict liability, the law holds people responsible for injuries even when they have not been careless

Laura owns poisonous snakes on her property, which she uses for venom research purposes. One of the snakes escaped and within hours bit a neighbor who sued Laura. Though Laura was not negligent in her ownership of the snakes, the plaintiff easily won the suit based on the doctrine of: A. assumption of risk B. comparative negligence C. vicarious liability D. strict (absolute) liability

A. the jewelry B. the mink garments C. the paintings D. the DeSoto D**

Lucy owns a variety of valuable items, including expensive jewelry, a collection of fine paintings, several mink garments, and her grandfather's restored DeSoto auto, which she drives on special occasions. A personal articles floater can be used to cover all of the following items except;

unenforceable because one of the parties was incompetent

Melanie becomes intoxicated at a party and then Pierre persuades her to sell her car to him for $25. Pierre puts the terms in writing and both of them sign the documents. The next day, Pierre goes to Melanie's house with the money and demands that she deliver the car to him. The agreement he made with her is...

A. tabs that Miguel inflates to cover unpaid tabs of former customers B. the cost of reestablishing customers' tabs based on other records C. amounts that remain uncollectible because he cannot prove what is owed D. the increased costs of collecting accounts A**

Miguel purchased an accounts receivable floater because he allows many of his bar's regular customers to run a tab that they pay at the end of the month. If the book where he keeps track of these tabs gets destroyed, he expects that the insurer will pay for all of the following EXCEPT:

Morale Hazard

Most of his neighbors keep their cars locked when they are parked outdoors overnight, but Cecil leaves his car unlocked with keys in the ignition. Cecil says if his car is stolen, he'll just make a claim on his insurance policy. What is Cecil's indifference to loss an example of?

unenforceable because it was for illegal purposes.

Owen buys insurance on the inventory in his warehouse, which includes a sizable quantity of watches bearing the "Rolex" label, and Owen pays the insurance premium. After Owen reports a theft, the insurer's investigation reveals that the watches it had agreed to insure were illegal counterfeits. Owen's contract with the insurer is:

all claims during the one-year policy

Randi's professional liability policy has a one year term and a $500,00 aggregate limit. This means that the insurer will pay no more than $500,00 for:

risks that are low demand in the state, risks that are substandard due to adverse loss experience, and risks that require higher coverage limits than admitted companies can cover.

Risks placed in the excess and surplus lines insurance market

competent party

Roy's parents bought him a car for his 16th bday and made him responsible for maintaining and insuring it. However, when Roy's applied for auto insurance after getting his driver's license, he was told that she could not enter into a binding insurance contract because, according to law in his state a 16 year old does not qualify as;

$15,000 in total. $5,000 for Sally and $10,000 for Tom

Sally and Tom are riding in Sally's auto when they are struck by another driver and injured. Sally's med bills total $5,000 and Tom's bills total $15,000. Sally's policy has a PIP limit of $10,000. How much will Sally's insurer pay in PIP benefits?

Comparative Negligence

Sally was seriously injured when she collided with Frank at an intersection. A court determined that the accident was 20% Sally's fault, so she was entitled to recover 80% of her damages from Frank. The defense was based on the doctrine of;

A. twisting B. misrepresentation C. unfair discrimination D. false advertising C**

Sandy and Cindy are healthy, 45 years old, and similar life expectancies. Though they are insured by the same company, Sandy's life insurance premiums are considerably lower than Cindy's. What may this indicate a case of?

Nothing Sarah's deductible is $20,000, which is 5% of $400,000.

Sarah's home is insured for $400,000 with a 5% hurricane deductible. A hurricane causes $20,000 in damage to her home. How much, if anything, will her insurer pay for the loss?

Ben, Audra, and their children who live with them

The declarations of their homeowners policy list Ben and Audra as the named insured's. However, the definition of "insured" indicates the relatives living in their household are also insureds. One of the policy's insuring agreements says: "We cover personal property owned by an "insured." This section of their policy covers only personal property belonging to whom?

A. failing to meet projected sales goals B. engaging in rebating C. violating the Code of Ethics D. intentionally violating the insurance laws A**

The department cannot suspend or revoke an agents license for which of the following;

Contracts of Adhesion

The fact that insurance policy language is written by an insurance company and is nonnegotiable makes insurance policies;

$7,000

Toni was injured when his car collided with Owen's at an intersection. In applying the doctrine of comparative negligence, a court determined that Toni sustained damages in the amount of $10,000 and the accident was 70% Owen's fault. What amount is Toni entitled to recover from Owen?

to help minimize the cost of repairs and the cost of insurance Insurers' use of aftermarket parts from non-original equipment manufacturers to help minimize the cost of repairs and the cost of insurance

When the front fenders off Bobbie's coupe were damaged in an auto accident, his insurer arranged to replace them with non-original equipment (non-OEM) parts. Why does the insurer use non-OEM parts?

Declarations

Where in a property and casualty insurance policy would the insured expect to see his or her name?

A. Declarations B. Insuring Agreements C. Waivers D. Conditions C**

Which are typically NOT among the provisions of a typical property and casualty insurance policy?

A a hazard is a condition that increases the likely number of losses or the likely severity of a loss. Slippery stairways are a physical hazard because they increase the likelihood that someone could slip and be injured

Which of the following conditions is a physical hazard? A. slippery stairways B. landlord with a bad attitude C. stained flooring D. fire

A. flood B. vandalism C. explosion D. windstorm A** An open (special) perils policy typically lists flood as an excluded peril, necessitating the need for flood insurance or a difference-in-conditions (D-I-C) policy to cover that risk

Which of the following is commonly listed as an excluded cause of loss in an open perils property insurance policy?

C Premium finance companies may charge a service charge of up to $12 per $100 premium financed.

Which of the following is true of premium financing contracts? A. There is no limit in the amount a premium finance company may charge in fees B. Premium financing contracts cannot be paid off early C. Premium financing contracts may include a service charge D. Premium finance contracts let the insured pay premiums on an annual basis instead of monthly

to deny coverage, the insurer has the burden of proof to show the loss was caused by an excluded peril. If the insurer cannot prove the cause of a loss was an excluded peril, the loss is covered.

With an open perils policy, which of the following statements correctly describes the burden of proof with respect of covering losses?

$250,000

20 years ago, Eldon paid a contractor $100,000 to build a house on land worth $50,000. Today the land is worth $75,000 and it would cost $250,000 to build the same kind of house. What is the current replacement cost value of Eldon's home?

Adverse Selection

A homeowner who owns a vicious dog may be more inclined to purchase liability insurance than one who doesn't own such an animal. What is this an example of?

Risk Retention sometimes referred to as the "do nothing" option, risk retention is simply an acceptance of loss and a willingness to pay the financial consequences out of one's personal assets.

A willingness to personally accept the financial consequences of an unexpected loss is the basis of what risk management technique?

risk prevention By removing the snow from the sidewalk, Sam prevents a visitor from slipping and falling on it. He is not merely reducing the chance that this will happen because he is removing the hazard giving rise to the condition that could result in this kind of injury to a visitor.

After every snowfall, Sam removes the snow from the sidewalk that leads to his front door. HIs actions are examples of;

risk sharing pooling is a modern example of risk sharing that takes place when a number of similar insurance risks are combined so that the loss to any one member of the pool is reduced

Agreements between municipalities to share major losses through a process called pooling is based on what type of risk management technique?

the policy was obtained through a material misrepresentation A PAP that has been in effect for at least 60 days or renewed can be cancelled only for nonpayment of premium, for suspension or revocation of the insured's drivers license, or because the policy was obtained through material malpresentation.

An insurer that decides to cancel a PAP after it has been renewed can do so if

It adds no-fault coverage that is available or required in the new home state.

Damien moves to another state, so his insurer issues a different personal auto policy. Damien notices that is has personal injury protection endorsement that his former policy did not have. What is the purpose of this endorsement?

5 years

Insurers must keep records of their insurance transactions for how many years after the transaction was completed?

Rebecca will pay nothing, the PAP will pay $500,000, and the umbrella will pay $100,000

Rebecca has a PAP with $500,00 limit and a $1 million personal umbrella policy with a $500 retained limit (deductible) for slander and defemination. She is at fault in an auto accident that is settled for $600,000. How will this settlement amount be paid?

A. homeowners B. workers compensation C. commercial property D. commercial liability A** TRIA requires that property and casualty insurers selling insurance in the US make terrorism coverage available under commercial property, commercial liability, and workers compensation insurance policies. There is no similar requirement with respects to homeowners policies.

The Terrorism Risk Insurance Act (TRIA) does NOT compel insurance companies to offer coverage for certified acts of terrorism in which of the following lines of insurance?

all parts of the building falls or caves in

The collapse additional coverage in a homeowners policy applies only when:

Rich "You" refers to the named insured. Alison and Johnny are insureds, but they are not named insureds, nor are they included in the definition of "you"

The declarations of his personal auto policy lists Rich as the named insured. However, the policy's definition of "insured" indicates that drivers living in his household are also insured, which would seem to cover his wife, Alison, and their teenage son Johnny. When this policy uses the word "you" to who is it referring?

the insurance policy covers the entire loss

The doctrine of concurrent causation holds that if a loss involves more than one peril, and the insurance policy covers at least one of the perils, then...

Premium

The money that a property insurance policyholder pays for insurance covering his building is called

Physical Damage Coverage

The personal auto policy's coverage for collision and other-than-collision risks are collectively called

liability coverage of section II

The six ISO homeowners policy forms all offer the same;

Risk Transfer

Theo pays an annual premium to the insurance company that covers many of the risks associated with his business. What risk management technique is he using?

Angelo's insurer provides primary coverage. Primary insurance follows the car, so the owner's insurance provides primary coverage for the borrowing driver's injuries.

Trisha is driving Angelo's car with his permission when she causes an accident in which she sustains minor injuries. Trisha and Angelo have PAP with medical payments coverage. For what source, if any, will Trisha recover her medical expenses?

C Lines of insurance covered by TRIA includes commercial property, commercial liability and workers compensation insurance

Under the Terrorism Risk Insurance Act, all of the following lines of Insurance are covered EXCEPT: A. commercial property insurance B. workers compensation insurance C. homeowners and dwelling insurance D. commercial liability insurance

That the policy does not cover bailees

What does the "No Benefit to Bailee" provision in a property and casualty policy make clear?

in which countries coverage applies. Insurance policies usually include a coverage territory provision that indicates where coverage applies.

What does the coverage territory provision in property and casualty insurance policy explain?

$5,000

What is the maximum fine an individual can pay for intentionally falsifying information on a proof of loss form?

A. To reduce the premiums of the umbrella policy B. To ensure that a sufficient premium is paid for the coverage provided C. To maintain the broadest scope of coverage possible D. To prevent the insured from canceling the underlying policy to rely solely on the umbrella policy for basic coverage D**

What is the purpose of the maintenance of underlying insurance conditions in a personal umbrella policy?

to advice that the insurer may order a credit report on the application that includes personal information

What is the purpose of the notice to consumers required by the Fair Credit Reporting Act?

When the underlying aggregate limits have been exhausted

When may an umbrella policy replace the coverage of an underlying policy?

Florida Life and Health Guaranty Association protects policyowners, insureds, beneficiaries, annuitants, payees, and assignees of life insurance polices, health insurance policies, and annuity contracts if an insurer fails to perform its contractual obligations because it becomes impaired of insolvent

Which entity protects policyowners, insureds and beneficiaries if an insurer cannot perform its contractual obligations because of impairment or insolvency?

Violent Crime Control and Law Enforcement Act of 1994

Which federal law prevents certain convicted felons from engaging in the insurance business unless they obtain a waiver from the Department of Insurance?

HO2 HO 2 policy insures the dwelling, other structures and personal property on a named peril basis.

Which homeowners insurance form that can be used to insure a single family home provides named perils coverage on both the dwelling and personal property?

A. Lily is held responsible for her cat's injury to Lily's guest B. Dominic is held responsible for food poisoning due to a pizza he delivered. C. Edie is held responsible for striking a pedestrian with her bike D. Ruby is held responsible for an accident caused by her employee D** Occurs when an employer is held responsible for damages resulting from the negligence of an employee who was acting in the course and scope of his/her employment

Which is an example of vicarious liability?

obtaining a license of registration from the state

Which of the following is a requirement to operate as a insurance agency in FL?

Refrigerator All the other items are attached to the building and thus constitute as real property.

Which of the following items constitutes as personal property? Refrigerator, built in custom bookcase, french door's, and a kitchen sink

Functional Replacement Cost

Which of the following loss valuation methods is used with older buildings that have components no longer available or available only at a prohibitively high cost to repair or replace?

A. assumption of risk B. comparative negligence C. contributory negligence D. absolute liability A**

A fan in the stands was hit on the head by a foul ball at a baseball game. His attempt to sue the ball club and stadium was rejected by the court due to the doctrine of;

Subrogation def: the insurer's right to recover its claim payment form a party that was responsible for the loss. The neighbor's insurance policy no doubt includes subrogation provision that permits the neighbor's insurer, after paying the claim, to seek recovery from Aimee.

Aimee thought she was correctly following the cooking instructions when she put a frozen turkey into the turkey fryer, but the resulting fire destroyed her neighbor's wooden deck. After paying for the deck, the neighbors insurer attempts to recover from Aimee by exercising its right of;

Punitive Damages def: are amounts a defendant is required to pay as punishment in cases where the defendant has acted in an especially outrageous manner.

Alan used an old truck with bald tires and leaking brake lines to move grain form his farm to the grain elevator. During the trip, his brakes failed, and he ran into a school bus. In addition to paying for damage to the bus, the court also ordered Alan to pay an additional $250,000 as punishment for his grossly negligent behavior. What is this additional payment considered?

perils named in the policy

Clyde's tenant-occupied house is insured under a DP 1 policy that covers only the dwelling of the building. His policy covers losses caused by:

A. A hailstorm creates pockmarks in the buildings siding. B. Heat from a fire in the building next door scorches the building's siding C. Pieces of the building's siding blow off in a wind storm D. Woodpeckers make holes in the buildings siding. D**

For a building that has wooden siding, which of the following losses would be excluded by one of the maintenance or wear & tear exclusions in the property insurance policy?

Surplus lines companies are non-admitted, but approved insurers

How would you describe surplus lines companies?

applicant in the typical insurance transaction, the applicant (the offeror) makes the offer to the insurance company (offeree) through a signed application plus a premium deposit.

In a standard insurance sales transaction involving in applicant, a producer, and an insurance company, which party is the offeror?

$400,000 The homeowners form provides replacement cost coverage on buildings with no deduction for depreciation if the insured purchases a limit of insurance that equals at least 80% of the full replacement cost value of the building at the time of the loss.

It would cost $500,000 to replace Angel's home today with an identical home at the same location. According to her HO 3 policy, no depreciation will be deducted when settling a loss if she buys coverage of at least;

A. the utility company for damage to pole B. Joe's claim for damage to his car C. claims for lost wages by drivers who were late to work D. Joe's claim for expenses to rent a car C**

Jodie is distracted while driving her child to school. She collides with Joe's car and pushes it into a utility pole. Joe's car is damaged and the pole is destroyed. The accident causes a traffic jam that prevents other drivers from getting to work on time. Which claim on Jodie's personal auto policy does NOT involve property damage?

the perils named in his policy

John's apartment is insured under a DP 1 basic form that covers only personal property. His policy covers losses caused by;

$15,000 or 5% of his coverage limit

John's home is insured for $300,000. He has a 5% hurricane deductible. His property sustains $100,000 in damage in a hurricane. How much will he contribute toward the claim?

A. Personal lines risk that are placed with surplus lines insurers B. Crop insurance for a family owned farm C. A group of 12 personally owned vehicles D. A private passenger van used as a food truck C** The personal lines license (type 22-44) allows Karen to transact business related to property and casualty insurance sold in individuals and families for noncommercial purposes only.

Karen is a personal lines agent. Which risk is she authorized to write under her current license?

A. police had a warrant to seize the car as evidence in an investigation B. tow truck operator was unlawfully removing her car C. car was being towed because it was parked illegally D. car was be repossess by the lender B**

Maryann's car is being towed from its parking space on the street in front of her home. The other-than-collision coverage of her PAP will cover her loss is the;

Suzie will pay $250, the PAP insurer will pay $300,000 and the umbrella will pay $199,750

Suzie has $1 million personal umbrella policy with $250 retained limit (ded) for personal liability and a PAP with $300,000 limit. She is at fault in an auto accident that is settled for $500,000. How will this settlement amount be paid?

It will not pay for Sylvia's medical bills because she was at fault

Sylvia is at fault for an auto accident with Lucien in which Sylvia is injured. She has no health insurance, and Lucien has no auto insurance. How would Sylvia's UI coverage apply to this situation?

provide the policy with broadened coverage that may be introduced in subsequent editions of that policy form, without requiring further underwriting The liberalization clause provides existing policies with broadened coverage features that may be introduced in subsequent editions of that policy form, without requiring further underwriting.

The basic purpose of the liberalization clause in a property and casualty insurance policy is to:

A. exposure B. peril C. hazard D. risk C** a hazard is a condition that increases the chance that a loss can occur or the likely severity of a loss

The street in front of Greg's house is riddled with potholes. He ruins a wheel while driving over one of the potholes. The potholes present a;

incurred losses and earned premium

The two things that an insurance company's loss ratio compares are;

To lower insurance costs by reducing or eliminating litigation

What is the purpose of no-fault auto insurance?

to advise that the insurer may order a credit report on the application that includes personal information

What is the purpose of the notice to consumers required by the Fair Credit Reporting Act?

when the loss occurs

When is an owner of a property or casualty insurance policy required to have an insurable interest in the insured risk?

A. rebating B. defamation C. unfair discrimination D. coercion B** to publish or circulate a false or misleading statement about or a statement this is maliciously critical of or derogatory to the financial condition of an insurer.

When meeting with a prospect to discuss life insurance, Agent Tyler makes disparaging comments about the financial stability and reputation of a competitor to dissuade the prospect from purchasing its policies. Which unfair trade practice has Agent Tyler committed?

A. Churning B. Discrimination C. Sliding D. Rebating B** Telling applicants that they are required to purchase a specific ancillary coverage or product alone with another insurance product, when it is not required by law, is considered sliding.

When selling individual life insurance, Mary tells a prospect that FL law requires them to purchase a long-term care rider, even though this is not true. Which unfair trade practice has Mary committed?

A. commercial tractor-trailer combo B. temporary substitute passenger auto C. newly acquired passenger auto D. owned private trailer A** The PAP provides only limited coverage for trucks with a GVW of 10,000 lbs or more

Which is least likely to be considered a "covered auto" in a PAP

FAJUA

Which is the market of last resort for those unable to find auto insurance in the admitted market in Florida?

A. charging a fee that is more than the stated premium B. offering to share commission if a client buys several insurance policies C. telling clients than an agent is certified to provide specialized financial advice to senior citizens D. telling clients than an agent holds a charted financial consultant (ChFC) designation D**

Which of the following activities does not violate insurance code?

A. Negotiating an insurance contract B. Mailing an insurance contract C. Soliciting Insurance D. Make an insurance contract B**

Which of the following does NOT constitute the transaction of insurance?

A. Joe answers "no" to a question asking if any member of his household has had a moving violation ticket is the past 2 years, not knowing his wife actually has a speeding ticket two years ago. B. Carol answers "yes" to the question asking if her home has a carbon monoxide detector when it doesn't, because she believes the smoke detectors serve that purpose. C. Bill answers "no" to a question if he has ever declared bankruptcy, knowing that 8 years ago he filed for bankruptcy protection. D. Karen is not asked, and does not mention, that she was found guilty of insurance fraud 15 years ago. C**

Which of the following is an example of misrepresentation on an insurance application?

A. the chance that the value of land will change B. the chance stocks will change C. the chance a gambler will lose a bet D. the chance a fire will destroy a building D** Only pure risks are insurable. Pure risk involves the chance of a loss.

Which of the following is most likely to be an insurable risk?

A. conditions B. declarations C. definitions D. insertions D** The provisions commonly found in an insurance policy are declarations, definitions, insuring agreements, exclusions, and conditions.

Which one of the following is NOT a type of provision found in property and casualty insurance policies?

A. Bees build a nest under the siding B. Hailstorm creates cracks in the siding C. Heat from a fire in the building next door melts the siding D. Pieces of siding blow off in a windstorm A** Maintenance or wear and tear exclusions typically exclude insects and birds

Which one of the following losses would most likely be excluded by one of the maintenance or wear & tear exclusions in a property insurance policy?

A. lightning B. fire C. falling objects D. smoke C** Property Insurance policies covering basic causes of loss invariably include coverage for fire, lightning, and smoke. Falling objects coverage is more likely found in a broader policy that covers a longer list of perils.

Which one of the following perils is least likely to be covered under a property insurance policy that covers buildings and contents against the basic cause of loss?

PIP benefits are not required on a motorcycle insurance policy. If the insured's has an auto and motorcycle policy, the PIP on the auto will not protect him on the motorcycle. It is offered on the motorcycle policy but not required.

Which statement is correct about motorcycle insurance, its coverage, and benefits?

general damages general damages involve a money award designed to compensate an injured person for his or her pain and suffering.

While driving, Terri ran a red light and broadsided Victor's pickup. Victor was hospitalized for a week and spent another month recovering from injuries he suffered from the accident. In addition to paying his medical bills and reimbursing his lost wages, Terri insurer was required to pay additional damages for Victor's pain and suffering, which are considered;

Conditional Contract

While it provides considerable coverage, a property and casualty insurance policy will not pay benefits unless specific actions defined in the policy are taken by the policyholder when submitting a claim, due to the fact the policy is a...

Notify the insurer of the claim, assist the insurer in making a settlement, and promptly forward any loss notice or summons to the insurer. Do NOT try and settle the claim on his own.

While working at his service station, Bert mistakenly fueled a customers truck with gasoline rather than diesel fuel, damaging the truck's engine. In responding to the trucker's liability claim for damage, Bert's insurance policy requires him to...