Florida 6-20 All Lines Claims Adjuster Exam Review – Practice
Questions, Answers & Rationales for Certification
This practice exam is based on the provided content for the Florida Claims Adjuster Exam,
focusing on property, casualty, workers' compensation, ethics, unfair trade practices, and
claims handling. Each Question is labeled, with the **bolded answer** followed by a brief
rationale aligned with Florida Statutes (e.g., Chapters 626, 627) and standard insurance
principles. Use for pre-license prep or CE review—24 CE hours required biennially, including
ethics.
Question 1: Peril Answer: Something that causes a loss. Rationale: Peril is the direct cause of
loss (e.g., fire, wind); contrasts with hazard, which increases likelihood (standard insurance
definition).
Question 2: Hazard Answer: Something that increases the probability that a loss will occur.
Rationale: Hazards amplify perils (e.g., physical like faulty wiring, moral like dishonesty); key
to underwriting and risk assessment.
Question 3: Warranty Answer: A policy condition, either based on information in the insureds
application or inserted by the insurer. It is a guarantee of a fact. Rationale: Warranty is an
absolute promise; breach can void coverage, unlike representations which are to the best
knowledge (FS 627.409).
**Question 4:** Misrepresentation
**Answer:** An untrue statement by the insured, made in an application for insurance but
which does not become a part of the policy.
**Rationale:** Misrepresentation is a false material fact; if not attached to the policy, it may
not void coverage unless fraudulent (FS 627.409).
**Question 5:** Concealment
**Answer:** The failure of the insured to reveal relevant facts known to the insured in
applying for insurance.
,**Rationale:** Concealment breaches utmost good faith; material nondisclosure can void
the policy (FS 627.409).
**Question 6:** Abandonment
**Answer:** Property insurance policies usually contain an abandonment clause, stating the
insured cannot dump damaged property on the insurer and demand its full value.
**Rationale:** Prevents moral hazard; insured must mitigate and allow salvage (standard
ISO condition).
**Question 7:** Severability
**Answer:** The insurance applies separately to each insured as if other insureds did not
exist.
**Rationale:** Ensures independent coverage; one insured's acts don't affect others (e.g., in
liability policies).
**Question 8:** Proximate Cause
**Answer:** The cause having the most significant impact in bringing about the loss under
a first-party property insurance policy, when two or more independent perils operate at the
same time (i.e., concurrently) to produce a loss. Courts employ a set of rules to resolve
causation disputes when a property policy states that it covers or excludes on law, whether
the policy provides coverage depends on which peril is chosen as the proximate cause.
**Rationale:** Determines dominant cause in chain events; covered if proximate peril is
insured.
**Question 9:** Direct Loss
,**Answer:** Physical harm to tangible property.
**Rationale:** Immediate physical damage; contrasts with indirect (e.g., business
interruption).
**Question 12:** Coinsurance
**Answer:** The amount, generally expressed as a fixed percentage, an insured must pay
against a claim after the deductible is satisfied. It's ultimately a way for the insured and
insurer to share responsibility for the risk. It can also help reduce the cost of the insurance
policy premium. Coinsurance can be written on an 80/20, 90/100, or 100% rule.
**Rationale:** Encourages adequate insurance; penalty if underinsured (e.g., 80%
requirement).
**Question 13:** Personal Contract
**Answer:** Policies cover people who own and operate things, such as automobiles.
**Rationale:** Insurance is personal; non-transferable without consent.
**Question 14:** Conditional Contract
**Answer:** Also called a hypothetical contract, is a contract agreement that only requires
performance once the delineated conditions are met. This legal agreement requires prior
performance of another agreement or clause in order to be enforceable. If the other
agreement or condition is performed, then the conditional contract is enforceable and the
parties are bound to carry out the terms of the contract.
**Rationale:** Coverage depends on insured fulfilling duties (e.g., premium payment,
mitigation).
, **Question 15:** Contract of Indemnity
**Answer:** Principle of insurance that provides that when a loss occurs, the insured should
be restored to the approximate financial condition he/she occupied before the loss
occurred, no better or no worse.
**Rationale:** Prevents profit; restores to pre-loss state.
**Question 16:** Insurable Interest
**Answer:** The reasonable concern of a person to obtain insurance for any individual or
property against unforeseen events such as death, losses, etc.
**Rationale:** Economic stake required (FS 627.405).
**Question 17:** Waiver
**Answer:** 1.) Implied voluntary relinquishment, abandoning a legal advantage, need, claim
or right. 2.) Agreement or added clause of a policy that excludes some losses or limits the
sum of a claim, or extends coverage to add items not in a normal policy.
**Rationale:** Relinquishes rights; can be express or implied.
**Question 18:** Express Waiver
**Answer:** Occurs when the insurer or its representative knowingly gives up a known right
under the insurance contract.
**Rationale:** Intentional; binds insurer.
**Question 19:** Implied Waiver
**Answer:** A waiver that is assumed to be in effect from a person's behavior and shows he
is waiving a right.
Questions, Answers & Rationales for Certification
This practice exam is based on the provided content for the Florida Claims Adjuster Exam,
focusing on property, casualty, workers' compensation, ethics, unfair trade practices, and
claims handling. Each Question is labeled, with the **bolded answer** followed by a brief
rationale aligned with Florida Statutes (e.g., Chapters 626, 627) and standard insurance
principles. Use for pre-license prep or CE review—24 CE hours required biennially, including
ethics.
Question 1: Peril Answer: Something that causes a loss. Rationale: Peril is the direct cause of
loss (e.g., fire, wind); contrasts with hazard, which increases likelihood (standard insurance
definition).
Question 2: Hazard Answer: Something that increases the probability that a loss will occur.
Rationale: Hazards amplify perils (e.g., physical like faulty wiring, moral like dishonesty); key
to underwriting and risk assessment.
Question 3: Warranty Answer: A policy condition, either based on information in the insureds
application or inserted by the insurer. It is a guarantee of a fact. Rationale: Warranty is an
absolute promise; breach can void coverage, unlike representations which are to the best
knowledge (FS 627.409).
**Question 4:** Misrepresentation
**Answer:** An untrue statement by the insured, made in an application for insurance but
which does not become a part of the policy.
**Rationale:** Misrepresentation is a false material fact; if not attached to the policy, it may
not void coverage unless fraudulent (FS 627.409).
**Question 5:** Concealment
**Answer:** The failure of the insured to reveal relevant facts known to the insured in
applying for insurance.
,**Rationale:** Concealment breaches utmost good faith; material nondisclosure can void
the policy (FS 627.409).
**Question 6:** Abandonment
**Answer:** Property insurance policies usually contain an abandonment clause, stating the
insured cannot dump damaged property on the insurer and demand its full value.
**Rationale:** Prevents moral hazard; insured must mitigate and allow salvage (standard
ISO condition).
**Question 7:** Severability
**Answer:** The insurance applies separately to each insured as if other insureds did not
exist.
**Rationale:** Ensures independent coverage; one insured's acts don't affect others (e.g., in
liability policies).
**Question 8:** Proximate Cause
**Answer:** The cause having the most significant impact in bringing about the loss under
a first-party property insurance policy, when two or more independent perils operate at the
same time (i.e., concurrently) to produce a loss. Courts employ a set of rules to resolve
causation disputes when a property policy states that it covers or excludes on law, whether
the policy provides coverage depends on which peril is chosen as the proximate cause.
**Rationale:** Determines dominant cause in chain events; covered if proximate peril is
insured.
**Question 9:** Direct Loss
,**Answer:** Physical harm to tangible property.
**Rationale:** Immediate physical damage; contrasts with indirect (e.g., business
interruption).
**Question 12:** Coinsurance
**Answer:** The amount, generally expressed as a fixed percentage, an insured must pay
against a claim after the deductible is satisfied. It's ultimately a way for the insured and
insurer to share responsibility for the risk. It can also help reduce the cost of the insurance
policy premium. Coinsurance can be written on an 80/20, 90/100, or 100% rule.
**Rationale:** Encourages adequate insurance; penalty if underinsured (e.g., 80%
requirement).
**Question 13:** Personal Contract
**Answer:** Policies cover people who own and operate things, such as automobiles.
**Rationale:** Insurance is personal; non-transferable without consent.
**Question 14:** Conditional Contract
**Answer:** Also called a hypothetical contract, is a contract agreement that only requires
performance once the delineated conditions are met. This legal agreement requires prior
performance of another agreement or clause in order to be enforceable. If the other
agreement or condition is performed, then the conditional contract is enforceable and the
parties are bound to carry out the terms of the contract.
**Rationale:** Coverage depends on insured fulfilling duties (e.g., premium payment,
mitigation).
, **Question 15:** Contract of Indemnity
**Answer:** Principle of insurance that provides that when a loss occurs, the insured should
be restored to the approximate financial condition he/she occupied before the loss
occurred, no better or no worse.
**Rationale:** Prevents profit; restores to pre-loss state.
**Question 16:** Insurable Interest
**Answer:** The reasonable concern of a person to obtain insurance for any individual or
property against unforeseen events such as death, losses, etc.
**Rationale:** Economic stake required (FS 627.405).
**Question 17:** Waiver
**Answer:** 1.) Implied voluntary relinquishment, abandoning a legal advantage, need, claim
or right. 2.) Agreement or added clause of a policy that excludes some losses or limits the
sum of a claim, or extends coverage to add items not in a normal policy.
**Rationale:** Relinquishes rights; can be express or implied.
**Question 18:** Express Waiver
**Answer:** Occurs when the insurer or its representative knowingly gives up a known right
under the insurance contract.
**Rationale:** Intentional; binds insurer.
**Question 19:** Implied Waiver
**Answer:** A waiver that is assumed to be in effect from a person's behavior and shows he
is waiving a right.
