Florida Licensing(Study set for Florida Insurance
Licensing) 137 QUESTIONS| GRADED A
All of the following describe insurable interest EXCEPT:
• It must exist at the time of the loss
• It must exist for insurance to respond
• Shows a similarity between insurance and wagering
• The insured would suffer an economic loss Correct Answer: • Shows a similarity between
insurance and wagering
An Insurance Policy is a contract with all the following characteristics, EXCEPT:
• It is a personal contract
• parties are of unequal power with ambiguities or unclear working resolved in favor of the
insured because it is a contract of adhesion
• Indemnity is not part of an insurance contract
• There are conditions imposed on both the insurer and insured Correct Answer: • Indemnity is
not part of an insurance contract
An insurance contract which may contain a "gray area" or an ambiguity that is generally resolved
in favor of the insured because insurance is a contract of: Correct Answer: Adhesion
If an insured sells his car to another person, the buyer may be prohibited from also receiving the
insured's policy. This is because the insurance contract is a contract of: Correct Answer:
Personal nature
Strict or absolute liability Correct Answer: Is assigned by law or statute
Jack and Connie agree to have Jack burn down Connie's house for $10,000. What element of a
valid contract is missing? Correct Answer: Legal Purpose
Risks that are insurable are Correct Answer: Pure risks
Insurance that covers the responsibility for loss arising out of negligence that results in payment
to a party other than the insured is: Correct Answer: Liability Insurance
The goal of insurance is to restore the insured to the same economic position as before the
covered loss, this is the principle of Correct Answer: Indemnity
All of the following are ways that liability limits can be expressed except:
• PIP Limit
• Aggregate Limit
• Split Limit
• Single Limit Correct Answer: PIP Limit
,An insured has A SPLIT limit liability policy with 10/20/10 limits. He owes the following people
liability bodily injuries claims of: Passenger 1 = $12,000, Passenger 2 = $10,000, Passenger 3 =
$18,000. How much liability insurance will his policy pay for these claims? Correct Answer:
$20,000
If a lender has an insurable interest in an auto, because of the money loaned to finance the
purchase, the lender would appear on the policy as the:
• Lessee
• Loss Payee
• Mortgagor
• Mortgagee Correct Answer: Loss Payee
To turn partially damaged property over to the insurance company and ask them to pay for a total
loss is called Correct Answer: Abandonment
Firemen caused water damage to a property by spraying water to put out a fire. If the property
insurance policy listed fire as the only named peril: Correct Answer: The water damage is
covered due to the concept of proximate cause
XYZ Insurance Corp. filed its corporate charter in Tallahassee and has its home office in Tampa:
Correct Answer: In Florida, XYZ is a domestic insurer
An insured has a home with a replacement cost / value of $100,000, on which he carries an
insurance policy for $80,000 with an 80% Coinsurance clause. The insured has a $20,000 partial
loss, the insurance company will pay how much for this partial loss of $20,000? (Remember
$80,000 is 80% of $100,000) Correct Answer: $20,000
"Actual Cash Value" ACV means: Correct Answer: Current cost to replace minus depreciation
Which of the following is TRUE concerning Subrogation? Correct Answer: Allows insurer to
sue a negligent third party to recover a loss paid to an insured
All of the following may qualify for a dwelling policy EXCEPT:
• A 6 - family dwelling
• A beach house owned by ACME Corporation
• A small single family home, rented by a salesman
• An old frame home, built upon piers, valued at $10,000 and occupied by the owner, Mrs. Jones.
Company underwriting minimum for a homeowner policy is $50,000 Correct Answer: A 6 -
family dwelling
All of the following are eligible for a Homeowners Policy EXCEPT:
• A person who rents an apartment
• A condominium owner
• Owner-occupant of a four-family dwelling
• A beach house owned by ACME Corporation Correct Answer: A beach house owned by
ACME Corporation
, The principle of "insurable interest" is important in the dwelling policy as well as other kinds of
insurance. Which of the following does not have "insurable interest" in the described property?
• The one who holds title to the property
• One who inherits title to property under the terms of a will
• One who attends a Mary Kay party at a friend's property
• A bank who holds a mortgage on a described property Correct Answer: One who attends a
Mary Kay party at a friend's property
Aunt Mary lives with the insured Homeowner. A thief steals her hearing aid. The HO-3 will:
Correct Answer: Cover within the limits of the H/O policy
Which of the following is eligible for a Homeowners Policy?
I. Susie, who has purchased a condo unit for her residence
II. John, who buys a duplex and lives in one side
III. Sam, who rents an apartment for his residence Correct Answer: I, II and III
Which of the following is NOT covered under the HO-Coverage C, Personal Property?
• An insured's suitcase and clothing, valued at $1.500 stolen from his motel room while at a
convention
• A fire breaks out in the residence and an overnight guest loses hi clothes in the fire
• The insured's daughter's golf clubs are stolen from her locker at school
• The dead fish when the insured accidentally overturns his tropical fish tank and all the fish die
from lack of oxygen Correct Answer: The dead fish when the insured accidentally overturns his
tropical fish tank and all the fish die from lack of oxygen
Under both the Dwelling and Homeowners, Coverage B - unattached structures - usually is:
Correct Answer: 10% of Coverage A - Structure
Which of the following forms is "all risks" on the dwelling policy? Correct Answer: DP-3 , or
the special form
Which of the following is NOT one of the rating factors used in determining a H/O
(Homeowners) premium? Correct Answer: Gender of owner
Jane has a dwelling policy with the house insured for $40,000. If her detached shed, which is
valued at $4500, is destroyed by a covered peril, what can she expect? Correct Answer: She can
expect $4,000 to be paid, because unattached structures are covered up to 10% of the dwelling
amount
Homeowners Policies usually insure property for which of the following?
• Rising water - Flood, back up of sewer or drain
• Inherent vice, underground seepage, governmental action
• Freezing, wear & tear, marring, deterioration
• Fire, lightning, theft Correct Answer: Fire, lightning, theft
Licensing) 137 QUESTIONS| GRADED A
All of the following describe insurable interest EXCEPT:
• It must exist at the time of the loss
• It must exist for insurance to respond
• Shows a similarity between insurance and wagering
• The insured would suffer an economic loss Correct Answer: • Shows a similarity between
insurance and wagering
An Insurance Policy is a contract with all the following characteristics, EXCEPT:
• It is a personal contract
• parties are of unequal power with ambiguities or unclear working resolved in favor of the
insured because it is a contract of adhesion
• Indemnity is not part of an insurance contract
• There are conditions imposed on both the insurer and insured Correct Answer: • Indemnity is
not part of an insurance contract
An insurance contract which may contain a "gray area" or an ambiguity that is generally resolved
in favor of the insured because insurance is a contract of: Correct Answer: Adhesion
If an insured sells his car to another person, the buyer may be prohibited from also receiving the
insured's policy. This is because the insurance contract is a contract of: Correct Answer:
Personal nature
Strict or absolute liability Correct Answer: Is assigned by law or statute
Jack and Connie agree to have Jack burn down Connie's house for $10,000. What element of a
valid contract is missing? Correct Answer: Legal Purpose
Risks that are insurable are Correct Answer: Pure risks
Insurance that covers the responsibility for loss arising out of negligence that results in payment
to a party other than the insured is: Correct Answer: Liability Insurance
The goal of insurance is to restore the insured to the same economic position as before the
covered loss, this is the principle of Correct Answer: Indemnity
All of the following are ways that liability limits can be expressed except:
• PIP Limit
• Aggregate Limit
• Split Limit
• Single Limit Correct Answer: PIP Limit
,An insured has A SPLIT limit liability policy with 10/20/10 limits. He owes the following people
liability bodily injuries claims of: Passenger 1 = $12,000, Passenger 2 = $10,000, Passenger 3 =
$18,000. How much liability insurance will his policy pay for these claims? Correct Answer:
$20,000
If a lender has an insurable interest in an auto, because of the money loaned to finance the
purchase, the lender would appear on the policy as the:
• Lessee
• Loss Payee
• Mortgagor
• Mortgagee Correct Answer: Loss Payee
To turn partially damaged property over to the insurance company and ask them to pay for a total
loss is called Correct Answer: Abandonment
Firemen caused water damage to a property by spraying water to put out a fire. If the property
insurance policy listed fire as the only named peril: Correct Answer: The water damage is
covered due to the concept of proximate cause
XYZ Insurance Corp. filed its corporate charter in Tallahassee and has its home office in Tampa:
Correct Answer: In Florida, XYZ is a domestic insurer
An insured has a home with a replacement cost / value of $100,000, on which he carries an
insurance policy for $80,000 with an 80% Coinsurance clause. The insured has a $20,000 partial
loss, the insurance company will pay how much for this partial loss of $20,000? (Remember
$80,000 is 80% of $100,000) Correct Answer: $20,000
"Actual Cash Value" ACV means: Correct Answer: Current cost to replace minus depreciation
Which of the following is TRUE concerning Subrogation? Correct Answer: Allows insurer to
sue a negligent third party to recover a loss paid to an insured
All of the following may qualify for a dwelling policy EXCEPT:
• A 6 - family dwelling
• A beach house owned by ACME Corporation
• A small single family home, rented by a salesman
• An old frame home, built upon piers, valued at $10,000 and occupied by the owner, Mrs. Jones.
Company underwriting minimum for a homeowner policy is $50,000 Correct Answer: A 6 -
family dwelling
All of the following are eligible for a Homeowners Policy EXCEPT:
• A person who rents an apartment
• A condominium owner
• Owner-occupant of a four-family dwelling
• A beach house owned by ACME Corporation Correct Answer: A beach house owned by
ACME Corporation
, The principle of "insurable interest" is important in the dwelling policy as well as other kinds of
insurance. Which of the following does not have "insurable interest" in the described property?
• The one who holds title to the property
• One who inherits title to property under the terms of a will
• One who attends a Mary Kay party at a friend's property
• A bank who holds a mortgage on a described property Correct Answer: One who attends a
Mary Kay party at a friend's property
Aunt Mary lives with the insured Homeowner. A thief steals her hearing aid. The HO-3 will:
Correct Answer: Cover within the limits of the H/O policy
Which of the following is eligible for a Homeowners Policy?
I. Susie, who has purchased a condo unit for her residence
II. John, who buys a duplex and lives in one side
III. Sam, who rents an apartment for his residence Correct Answer: I, II and III
Which of the following is NOT covered under the HO-Coverage C, Personal Property?
• An insured's suitcase and clothing, valued at $1.500 stolen from his motel room while at a
convention
• A fire breaks out in the residence and an overnight guest loses hi clothes in the fire
• The insured's daughter's golf clubs are stolen from her locker at school
• The dead fish when the insured accidentally overturns his tropical fish tank and all the fish die
from lack of oxygen Correct Answer: The dead fish when the insured accidentally overturns his
tropical fish tank and all the fish die from lack of oxygen
Under both the Dwelling and Homeowners, Coverage B - unattached structures - usually is:
Correct Answer: 10% of Coverage A - Structure
Which of the following forms is "all risks" on the dwelling policy? Correct Answer: DP-3 , or
the special form
Which of the following is NOT one of the rating factors used in determining a H/O
(Homeowners) premium? Correct Answer: Gender of owner
Jane has a dwelling policy with the house insured for $40,000. If her detached shed, which is
valued at $4500, is destroyed by a covered peril, what can she expect? Correct Answer: She can
expect $4,000 to be paid, because unattached structures are covered up to 10% of the dwelling
amount
Homeowners Policies usually insure property for which of the following?
• Rising water - Flood, back up of sewer or drain
• Inherent vice, underground seepage, governmental action
• Freezing, wear & tear, marring, deterioration
• Fire, lightning, theft Correct Answer: Fire, lightning, theft
