FLORIDA 2-20 AGENTS LICENSE EXAM REAL
EXAM 300 QUESTIONS AND CORRECT
DETAILED ANSWERS| A GRADE
1. Joe is out for an evening cruise on his 100 ft yacht. The fog rolls in and he loses all visability.
Then suddenly slams into another boat moored nearby. The damage to the other boat is roughly
$20,000. Under what section of Joe's Ocean Marine Policy would there be coverage for the other
boat?: Running Down Clause
2. Frank has a Personal Articles Floater with a fine arts schedule covering a painting. Coverage
is in the amount of $5,000. A three year old child comes in the house and ruins the painting by
marking it up with a black marker. The painting is now worthless. The company has located the
exact same painting for $2,000. What will the policy pay?: $5,000
3. Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to
special events at schools around the country where it will serve as a mobile billboard to promote his
product. Oscar is surprised to learn that insurers are reluctant to insure his vehicle because it fails
to meet one of the ideal characteristics of an insurable risk. Which characteristic is Oscar's vehicle
least likely to meet?: Large number of similar exposure units
4. Sally is a recent college graduate who lives in the suburbs and drives to work daily in the city.
She recognizes that owning a car creates both property damage and liability exposures for her and
at the same time she has the burden of student loans. For someone in Sally's circumstances the most
practical risk management technique for dealing with her auto-related loss exposures is: Risk
transfer.
5. Smith Construction Company is covered under an unendorsed Commer- cial General Liability
(CGL) Coverage Form. While working at a job site, Smith ruptured a natural gas line causing a
small fire to a neighboring retail store. The following claims have been made against Smith due to
this occurrence: Fire damage to the neighboring store, Pain and suffering claimed by the store
owner, Loss of income by the store owner until repairs are made to the store, and Fire damage to
the backhoe owned by Smith. Which one of the following statements is correct?: The backhoe is
property owned and is excluded.
6. Which one of the following is true of the supplementary payments in the Commercial
General Liability (CGL) Coverage Form?: The obligation to pay these supplementary payments ends
when the limit of insurance is exhausted.
7. Internet blogger Tom operates a public interest group on the Internet. In posting his opinions,
,Tom falsely accused the governor of his state of criminal behavior. Tom's Commercial General
Liability (CGL) Coverage Form will most likely exclude coverage for any resulting damage based
on which one of the following exclusions?: Electronic chatrooms or bulletin boards exclusion
8. Betty's Birdhouses constructs and sells birdhouses. Betty discovered a fungus in the wood used
to construct the birdhouses that would kill birds. Betty withdrew her entire stock of birdhouses to
avoid any claims from envi- ronmental organizations for loss to wildlife. Does Betty's Commercial
General Liability (CGL) Coverage Form cover the cost to withdraw the birdhouses and feeders?:
No, because the cost to withdraw Betty's product is excluded
9. The Business Auto Coverage form has no provision for what is known as "bobtailing." The
motor carrier's coverage form does provide coverage for bobtailing. Which of the following
activities is considered "bobtailing" as it relates to an owner-operator's liability coverage?:
Operating a power unit without a trailer
10.Under the Commercial General Liability (CGL) Coverage Form, medical payments coverage
applies to which one of the following?: A volunteer worker of the named insured.
11.Shady Stories, a tabloid newspaper, prints a false story about a local politi- cian. Shady knows
the story is false but thinks it will sell a lot of papers. The politician claims damages from Shady.
Shady's Commercial General Liability (CGL) Coverage Form excludes coverage for this loss
because the claim arose out of which one of the following?: Written material that was known to be false
12.Carl's Cabinets sells and installs cabinets in apartment buildings. After installation but before
an apartment is occupied, two of the cabinets are damaged when they fall from the wall as a result of
improper installation. Carl's Commercial General Liability (CGL) Coverage Form excludes
coverage for the damage to the cabinets because of which one of the following exclusions?: - Damage
to Your Work
13.Morgan Company is involved in a lawsuit that is covered under its unen- dorsed Commercial
General Liability (CGL) Coverage Form. Which one of the following would be covered under the
supplementary payments section of the CGL policy?: Post judgment interest awarded by the judge
14. The workers compensation laws of some states are inapplicable to which one of the
following?: Partners, sole proprietors, or executive officers.
15. Omicron Corporation currently does business in Colorado, Nebraska, and Kansas. These
states are listed in Item 3.A on the Information Page of Omicron's Workers Compensation and
Employers Liability Insurance Policy. The company is hoping to expand its operations into Utah,
Arizona, and New Mexico during the next year. Which one of the following statements is correct
with respect to workers compensation insurance in the states where Omicron hopes to expand?:
Omicron should include Utah, Arizona, and New Mexico in Item
3.C on the Information Page and advise the insurer immediately if the company begins operations in
any of those states.
16. Which one of the following would be covered under Part Two of the Work- ers Compensation
, and Employers Liability Insurance Policy?: An employee is exposed to disease during the policy
period but symptoms don't appear until after the employee is fired.
17. The Florida Surplus Service Lines Office (FSLSO) was created to: oversee the surplus lines
industry in the state
18. Which of the following is NOT a required qualification for a General Lines Agent:: Seeking
the license only to write controlled business
19. The Department of Financial Services performs the following, EXCEPT:: -
Pays insurance claims
20.Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to
special events at schools around the country where it will serve as a mobile billboard to promote his
product. Oscar is surprised to learn that insurers are reluctant to insure his vehicle because it fails
to meet one of the ideal characteristics of an insurable risk. Which characteristic is Oscar's vehicle
least likely to meet?: Large number of similar exposure units
21.Liability coverage to individuals and families for bodily injury and property damage arising
from the insured's personal premises or activities is typically provided by: Personal liability
insurance.
22.An insured covers his owned auto with more than one Personal Auto Policy (PAP), each from a
different insurer. In the event of a claim for medical payments coverage,: Each insurer pays its pro
rata share based on the proportion that its limit of liability bears to the total of applicable limits.
23.The Insuring Agreement in Part A - Liability Coverage of the Personal Auto Policy contains
descriptions of all of the following EXCEPT:: Limit of Liability
24.Tom and Martha insure their house with an unendorsed HO-3—Special Form (HO-3) with a
Coverage A—Dwelling limit of $300,000, which is the replacement cost of the house. A thief
breaks into the house while Tom and Martha are on vacation and steals the following items: •$500
cash•$50,000 stock certificates. Ignoring any deductible that may apply, how much, if any, will
Tom and Martha's insurer pay for the loss of the items?: $1,700
25. Once license, you have how long to obtain an appointment?: 48 months
26. Which of the following is NOT a duty of the Office of Insurance Regulation?-
: Submit rate filings and underwriting rules for approval
27. Which one of the following statements is correct?: Contractors must usually provide evidence of
liability insurance before a construction contract is granted.
28. From a risk management viewpoint, insurance is used to: Transfer the cost of losses.
EXAM 300 QUESTIONS AND CORRECT
DETAILED ANSWERS| A GRADE
1. Joe is out for an evening cruise on his 100 ft yacht. The fog rolls in and he loses all visability.
Then suddenly slams into another boat moored nearby. The damage to the other boat is roughly
$20,000. Under what section of Joe's Ocean Marine Policy would there be coverage for the other
boat?: Running Down Clause
2. Frank has a Personal Articles Floater with a fine arts schedule covering a painting. Coverage
is in the amount of $5,000. A three year old child comes in the house and ruins the painting by
marking it up with a black marker. The painting is now worthless. The company has located the
exact same painting for $2,000. What will the policy pay?: $5,000
3. Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to
special events at schools around the country where it will serve as a mobile billboard to promote his
product. Oscar is surprised to learn that insurers are reluctant to insure his vehicle because it fails
to meet one of the ideal characteristics of an insurable risk. Which characteristic is Oscar's vehicle
least likely to meet?: Large number of similar exposure units
4. Sally is a recent college graduate who lives in the suburbs and drives to work daily in the city.
She recognizes that owning a car creates both property damage and liability exposures for her and
at the same time she has the burden of student loans. For someone in Sally's circumstances the most
practical risk management technique for dealing with her auto-related loss exposures is: Risk
transfer.
5. Smith Construction Company is covered under an unendorsed Commer- cial General Liability
(CGL) Coverage Form. While working at a job site, Smith ruptured a natural gas line causing a
small fire to a neighboring retail store. The following claims have been made against Smith due to
this occurrence: Fire damage to the neighboring store, Pain and suffering claimed by the store
owner, Loss of income by the store owner until repairs are made to the store, and Fire damage to
the backhoe owned by Smith. Which one of the following statements is correct?: The backhoe is
property owned and is excluded.
6. Which one of the following is true of the supplementary payments in the Commercial
General Liability (CGL) Coverage Form?: The obligation to pay these supplementary payments ends
when the limit of insurance is exhausted.
7. Internet blogger Tom operates a public interest group on the Internet. In posting his opinions,
,Tom falsely accused the governor of his state of criminal behavior. Tom's Commercial General
Liability (CGL) Coverage Form will most likely exclude coverage for any resulting damage based
on which one of the following exclusions?: Electronic chatrooms or bulletin boards exclusion
8. Betty's Birdhouses constructs and sells birdhouses. Betty discovered a fungus in the wood used
to construct the birdhouses that would kill birds. Betty withdrew her entire stock of birdhouses to
avoid any claims from envi- ronmental organizations for loss to wildlife. Does Betty's Commercial
General Liability (CGL) Coverage Form cover the cost to withdraw the birdhouses and feeders?:
No, because the cost to withdraw Betty's product is excluded
9. The Business Auto Coverage form has no provision for what is known as "bobtailing." The
motor carrier's coverage form does provide coverage for bobtailing. Which of the following
activities is considered "bobtailing" as it relates to an owner-operator's liability coverage?:
Operating a power unit without a trailer
10.Under the Commercial General Liability (CGL) Coverage Form, medical payments coverage
applies to which one of the following?: A volunteer worker of the named insured.
11.Shady Stories, a tabloid newspaper, prints a false story about a local politi- cian. Shady knows
the story is false but thinks it will sell a lot of papers. The politician claims damages from Shady.
Shady's Commercial General Liability (CGL) Coverage Form excludes coverage for this loss
because the claim arose out of which one of the following?: Written material that was known to be false
12.Carl's Cabinets sells and installs cabinets in apartment buildings. After installation but before
an apartment is occupied, two of the cabinets are damaged when they fall from the wall as a result of
improper installation. Carl's Commercial General Liability (CGL) Coverage Form excludes
coverage for the damage to the cabinets because of which one of the following exclusions?: - Damage
to Your Work
13.Morgan Company is involved in a lawsuit that is covered under its unen- dorsed Commercial
General Liability (CGL) Coverage Form. Which one of the following would be covered under the
supplementary payments section of the CGL policy?: Post judgment interest awarded by the judge
14. The workers compensation laws of some states are inapplicable to which one of the
following?: Partners, sole proprietors, or executive officers.
15. Omicron Corporation currently does business in Colorado, Nebraska, and Kansas. These
states are listed in Item 3.A on the Information Page of Omicron's Workers Compensation and
Employers Liability Insurance Policy. The company is hoping to expand its operations into Utah,
Arizona, and New Mexico during the next year. Which one of the following statements is correct
with respect to workers compensation insurance in the states where Omicron hopes to expand?:
Omicron should include Utah, Arizona, and New Mexico in Item
3.C on the Information Page and advise the insurer immediately if the company begins operations in
any of those states.
16. Which one of the following would be covered under Part Two of the Work- ers Compensation
, and Employers Liability Insurance Policy?: An employee is exposed to disease during the policy
period but symptoms don't appear until after the employee is fired.
17. The Florida Surplus Service Lines Office (FSLSO) was created to: oversee the surplus lines
industry in the state
18. Which of the following is NOT a required qualification for a General Lines Agent:: Seeking
the license only to write controlled business
19. The Department of Financial Services performs the following, EXCEPT:: -
Pays insurance claims
20.Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to
special events at schools around the country where it will serve as a mobile billboard to promote his
product. Oscar is surprised to learn that insurers are reluctant to insure his vehicle because it fails
to meet one of the ideal characteristics of an insurable risk. Which characteristic is Oscar's vehicle
least likely to meet?: Large number of similar exposure units
21.Liability coverage to individuals and families for bodily injury and property damage arising
from the insured's personal premises or activities is typically provided by: Personal liability
insurance.
22.An insured covers his owned auto with more than one Personal Auto Policy (PAP), each from a
different insurer. In the event of a claim for medical payments coverage,: Each insurer pays its pro
rata share based on the proportion that its limit of liability bears to the total of applicable limits.
23.The Insuring Agreement in Part A - Liability Coverage of the Personal Auto Policy contains
descriptions of all of the following EXCEPT:: Limit of Liability
24.Tom and Martha insure their house with an unendorsed HO-3—Special Form (HO-3) with a
Coverage A—Dwelling limit of $300,000, which is the replacement cost of the house. A thief
breaks into the house while Tom and Martha are on vacation and steals the following items: •$500
cash•$50,000 stock certificates. Ignoring any deductible that may apply, how much, if any, will
Tom and Martha's insurer pay for the loss of the items?: $1,700
25. Once license, you have how long to obtain an appointment?: 48 months
26. Which of the following is NOT a duty of the Office of Insurance Regulation?-
: Submit rate filings and underwriting rules for approval
27. Which one of the following statements is correct?: Contractors must usually provide evidence of
liability insurance before a construction contract is granted.
28. From a risk management viewpoint, insurance is used to: Transfer the cost of losses.
