Florida Public All Lines Adjuster Exam FALL 2023 75
CORRECTLY ANSWERED QUESTIONS GRADED A+
Subordination - ANSWER: When the insured collets damages from his or her own
insurance company and those damages were caused by negligent third-party, the
insurance company steps into the shoes of the insured and is entitled to recover the
damages actually paid to the insured from the negligent party
liability insurance - ANSWER: Means that the payment by the insurance company will
be made to a third-party injured or damaged by the insured. An insured can we
never recover damages from their own liability policy.
DICE: Declarations, insuring agreement , condition, and exclusions. - ANSWER: For
fundamental parts of all property and liability insurance contracts
Proof of Loss - ANSWER: The evidence offered by the insured to support the claim
for damages and, assigned sworn statement by the insured verifying that the
required according to the policy or the insurance company.
Severability - ANSWER: Insurance applies separately to each insured as if the other
insured does not exist. Example: A homeowner who intentionally set fire to the
house will not prevent the bank that holds the mortgage from recovering insurance
for the damage done to the home.
risk - ANSWER: Insurance policies transfer risk, or the chance of financial loss.
Primary Policy - ANSWER: A basic, fundamental insurance policy which pays first with
respect to other outstanding policies followed by an Excess Policy.
Pro-rata policies - ANSWER: Will pay the proportion that it's limit bears to all limits
that applied to the loss.
- ANSWER: Policy A has a limit of 25,000; policy B has a limit of $50K; A loss is $6000.
If we add the policy limits, we have a total of $75,000. Policy A's limit is the 1/3 of
the total limit, therefore policy I will pay 1/3 of the loss, or $2000. Policy B limit is 2/3
of the total limit therefore policy be will pay 2/3 of the loss or $4000.
peril - ANSWER: Fire, windstorm, earthquakes, and flood. Insurance companies only
cover perils
Hazards - ANSWER: Increase the loss by a peril. There are three types of hazards.
A physical hazard is illustrated by a broken smoke alarm. The physical condition of
the alarm increases the chance of lost by fire.
, Moral hazard is the consensus attitude of the insured. And insured that intends to
commit arson increases the chance that there will be a loss by fire.
A morale hazard is an unconscious attitude of the insured, i.e. carelessness. A driver
that is text messaging while operating a motor vehicle increases the chance of loss in
an automobile accident.
Lender interests - ANSWER: Insurance company protect a lender as an insured. A
lender that makes a loan secured by real property is protected by a mortgage clause
or a mortgagee clause. A lender that makes a loan secured by personal property,
such as an auto loan, is protected by a loss payable clause and is referred to as a loss
payee
Actual Cash Value - ANSWER: replacement cost minus depreciation
Replacement Cost - ANSWER: Common on buildings however this valuation appears
to violate the principle of indemnity. The principal of Indemnity provides that the
insured shall not profit from the payment made for loss. Replacement cost provides
new for old and therefore appears to violate this principle
Coinsurance - ANSWER: Loss x policy amt/ coinsurmace % * FMV = Recovery
Direct Loss - ANSWER: Defined as physical harm or damage to tangible property.
Tangible property is a property that you can see touch and feel. Fire damage to an
office building is a direct loss.
Indirect Loss - ANSWER: Is the economic loss that results from a direct loss.
Therefore the indirect laws that arises from fire damage office building would be the
cost of relocation and any loss of profits while repairing the business location.
straight deductible - ANSWER: Is a flat amount subtracted from the loss. It is the
amount of the loss the insured has agreed to be responsible for.
Percentage Deductible - ANSWER: Requires a deduction of a percentage of the value
of the property or percentage of the policy limits. Example: uninsured has a 5%
hurricane deductible. If the value of the property is $100,000, and hurricane causes
$6000 of damage, the insurance deductible will be $5000 subtracted from the loss
and the insurance company will pay the remaining $1000.
Franchise Deductible - ANSWER: Specifies that when the loss is equal to or more
than the deductible, the loss will be paid in full. Example: a franchise deductible is
$5000: a loss is $4999; no insurance payment will be made. If the loss is $5000 or
more, the deductible will disappear and the loss will be paid in full.
Coinsurance Definition - ANSWER: Most commercial policies contain a coinsurance
clause that provide that an insured must carry a specific amount of coverage in order
to recover 100% of a loss within a policy limits. In the event an insured carries less
CORRECTLY ANSWERED QUESTIONS GRADED A+
Subordination - ANSWER: When the insured collets damages from his or her own
insurance company and those damages were caused by negligent third-party, the
insurance company steps into the shoes of the insured and is entitled to recover the
damages actually paid to the insured from the negligent party
liability insurance - ANSWER: Means that the payment by the insurance company will
be made to a third-party injured or damaged by the insured. An insured can we
never recover damages from their own liability policy.
DICE: Declarations, insuring agreement , condition, and exclusions. - ANSWER: For
fundamental parts of all property and liability insurance contracts
Proof of Loss - ANSWER: The evidence offered by the insured to support the claim
for damages and, assigned sworn statement by the insured verifying that the
required according to the policy or the insurance company.
Severability - ANSWER: Insurance applies separately to each insured as if the other
insured does not exist. Example: A homeowner who intentionally set fire to the
house will not prevent the bank that holds the mortgage from recovering insurance
for the damage done to the home.
risk - ANSWER: Insurance policies transfer risk, or the chance of financial loss.
Primary Policy - ANSWER: A basic, fundamental insurance policy which pays first with
respect to other outstanding policies followed by an Excess Policy.
Pro-rata policies - ANSWER: Will pay the proportion that it's limit bears to all limits
that applied to the loss.
- ANSWER: Policy A has a limit of 25,000; policy B has a limit of $50K; A loss is $6000.
If we add the policy limits, we have a total of $75,000. Policy A's limit is the 1/3 of
the total limit, therefore policy I will pay 1/3 of the loss, or $2000. Policy B limit is 2/3
of the total limit therefore policy be will pay 2/3 of the loss or $4000.
peril - ANSWER: Fire, windstorm, earthquakes, and flood. Insurance companies only
cover perils
Hazards - ANSWER: Increase the loss by a peril. There are three types of hazards.
A physical hazard is illustrated by a broken smoke alarm. The physical condition of
the alarm increases the chance of lost by fire.
, Moral hazard is the consensus attitude of the insured. And insured that intends to
commit arson increases the chance that there will be a loss by fire.
A morale hazard is an unconscious attitude of the insured, i.e. carelessness. A driver
that is text messaging while operating a motor vehicle increases the chance of loss in
an automobile accident.
Lender interests - ANSWER: Insurance company protect a lender as an insured. A
lender that makes a loan secured by real property is protected by a mortgage clause
or a mortgagee clause. A lender that makes a loan secured by personal property,
such as an auto loan, is protected by a loss payable clause and is referred to as a loss
payee
Actual Cash Value - ANSWER: replacement cost minus depreciation
Replacement Cost - ANSWER: Common on buildings however this valuation appears
to violate the principle of indemnity. The principal of Indemnity provides that the
insured shall not profit from the payment made for loss. Replacement cost provides
new for old and therefore appears to violate this principle
Coinsurance - ANSWER: Loss x policy amt/ coinsurmace % * FMV = Recovery
Direct Loss - ANSWER: Defined as physical harm or damage to tangible property.
Tangible property is a property that you can see touch and feel. Fire damage to an
office building is a direct loss.
Indirect Loss - ANSWER: Is the economic loss that results from a direct loss.
Therefore the indirect laws that arises from fire damage office building would be the
cost of relocation and any loss of profits while repairing the business location.
straight deductible - ANSWER: Is a flat amount subtracted from the loss. It is the
amount of the loss the insured has agreed to be responsible for.
Percentage Deductible - ANSWER: Requires a deduction of a percentage of the value
of the property or percentage of the policy limits. Example: uninsured has a 5%
hurricane deductible. If the value of the property is $100,000, and hurricane causes
$6000 of damage, the insurance deductible will be $5000 subtracted from the loss
and the insurance company will pay the remaining $1000.
Franchise Deductible - ANSWER: Specifies that when the loss is equal to or more
than the deductible, the loss will be paid in full. Example: a franchise deductible is
$5000: a loss is $4999; no insurance payment will be made. If the loss is $5000 or
more, the deductible will disappear and the loss will be paid in full.
Coinsurance Definition - ANSWER: Most commercial policies contain a coinsurance
clause that provide that an insured must carry a specific amount of coverage in order
to recover 100% of a loss within a policy limits. In the event an insured carries less
