Florida Certified Professional Claims Adjuster: Complete
Guide to Licensing, 6-20 All-Lines Certification, Training
Requirements, and Insurance Adjuster Career Opportunities
1
In the typical insurance sales transaction, the insurance company makes the initial offer to
the insurance applicant. True or False
Answer: False
Rationale:
In a typical insurance transaction, the applicant is the offeror. The applicant makes the offer to
the insurance company by submitting a signed application along with the premium payment.
2
In a standard insurance sales transaction involving an applicant, a producer, and an
insurance company, which party is the offeree?
Answer: Insurer
Rationale:
The applicant makes the offer by submitting the application and premium. The insurance
company (insurer) is the party that accepts or rejects the offer, making it the offeree.
3
Curt purchased property insurance covering an international shipment of firearms. The
shipment was destroyed during transit. During investigation, the insurer learns the
firearms were stolen. Why would the insurer refuse to cover the loss?
Answer: The contract is unenforceable because it served an illegal purpose.
,Rationale:
Insurance contracts must have a legal purpose. Since the firearms were stolen merchandise, the
contract involved an illegal activity, making it unenforceable.
4
Dusty intentionally lied about his age on an insurance application to obtain a lower rate.
What is this called?
Answer: Misrepresentation
Rationale:
A misrepresentation is a false statement of a material fact made during the application
process.
5
Hazel signs a document stating that her automatic sprinkler system will always remain in
working condition in exchange for a reduced premium. What is this statement?
Answer: Warranty
Rationale:
A warranty guarantees that a statement is true and will remain true. It is stronger than a
representation.
6
Olen insured watches labeled "Rolex." After theft, the insurer discovers they are
counterfeit. What happens to the contract?
Answer: Unenforceable because it was for an illegal purpose
Rationale:
Insurance contracts must serve a legal purpose. Since the watches are illegal counterfeits, the
insurer is not obligated to pay the claim.
, 7
In a valid insurance contract, the policyholder's premium payment is known as what?
Answer: Consideration
Rationale:
Consideration is something of value exchanged.
The policyholder provides premium payment, while the insurer promises to pay covered
losses.
8
Insurance policies are drafted by the insurer and offered on a take-it-or-leave-it basis.
What type of contract is this?
Answer: Contract of adhesion
Rationale:
Because the insurer writes the policy wording and the insured cannot negotiate the terms,
insurance policies are contracts of adhesion.
9
Brandy did not disclose illegal activity in her shop when applying for insurance. What is
this called?
Answer: Concealment
Rationale:
Concealment occurs when a person deliberately withholds important information that could
influence the insurer's decision.
10
Guide to Licensing, 6-20 All-Lines Certification, Training
Requirements, and Insurance Adjuster Career Opportunities
1
In the typical insurance sales transaction, the insurance company makes the initial offer to
the insurance applicant. True or False
Answer: False
Rationale:
In a typical insurance transaction, the applicant is the offeror. The applicant makes the offer to
the insurance company by submitting a signed application along with the premium payment.
2
In a standard insurance sales transaction involving an applicant, a producer, and an
insurance company, which party is the offeree?
Answer: Insurer
Rationale:
The applicant makes the offer by submitting the application and premium. The insurance
company (insurer) is the party that accepts or rejects the offer, making it the offeree.
3
Curt purchased property insurance covering an international shipment of firearms. The
shipment was destroyed during transit. During investigation, the insurer learns the
firearms were stolen. Why would the insurer refuse to cover the loss?
Answer: The contract is unenforceable because it served an illegal purpose.
,Rationale:
Insurance contracts must have a legal purpose. Since the firearms were stolen merchandise, the
contract involved an illegal activity, making it unenforceable.
4
Dusty intentionally lied about his age on an insurance application to obtain a lower rate.
What is this called?
Answer: Misrepresentation
Rationale:
A misrepresentation is a false statement of a material fact made during the application
process.
5
Hazel signs a document stating that her automatic sprinkler system will always remain in
working condition in exchange for a reduced premium. What is this statement?
Answer: Warranty
Rationale:
A warranty guarantees that a statement is true and will remain true. It is stronger than a
representation.
6
Olen insured watches labeled "Rolex." After theft, the insurer discovers they are
counterfeit. What happens to the contract?
Answer: Unenforceable because it was for an illegal purpose
Rationale:
Insurance contracts must serve a legal purpose. Since the watches are illegal counterfeits, the
insurer is not obligated to pay the claim.
, 7
In a valid insurance contract, the policyholder's premium payment is known as what?
Answer: Consideration
Rationale:
Consideration is something of value exchanged.
The policyholder provides premium payment, while the insurer promises to pay covered
losses.
8
Insurance policies are drafted by the insurer and offered on a take-it-or-leave-it basis.
What type of contract is this?
Answer: Contract of adhesion
Rationale:
Because the insurer writes the policy wording and the insured cannot negotiate the terms,
insurance policies are contracts of adhesion.
9
Brandy did not disclose illegal activity in her shop when applying for insurance. What is
this called?
Answer: Concealment
Rationale:
Concealment occurs when a person deliberately withholds important information that could
influence the insurer's decision.
10
