PROPERTY & CASUALTY INSURANCE EXAM PREP FLORIDA 3
QUESTIONS AND ANSWERS UPDATED 2024 -2025
ANS -The law of large numbers examines how likely an event will occur, such as using the information
that 1 in every 500 cars will be stolen and selling 500 auto policies to cover the one theft.
ANS -Solicitors sell insurance policies, receive insurance premiums and represent the insurance
company. They share several duties with agents and can work for agents, but they cannot issue or
countersign policies.
ANS -Rebating is the practice of returning a portion of the premium or the agent's/broker's
commission to the insured or providing other inducements (e.g., cash, gifts) to obtain the client's
business or to buy a policy from a specific insurer. While rebating is illegal in most states, it is currently
legal in California and Florida.
ANS -Solicitors sell insurance policies, receive insurance premiums and represent the insurance
company. They share several duties with agents and can work for agents, but they cannot issue or
countersign policies. Countersigning refers to the insurance agent's authentication of an insurance
contract. An agent is required to review and sign new insurance policies
ANS -In the event of a loss to property, aside from the insurance company, the insured also has
responsibilities, such as the duty to perform temporary repairs that are necessary to secure the
property, the duty to retain all receipts for materials and labor required to make any temporary repairs
and a duty to take reasonable action to prevent any additional damage to the property. The insured
does not typically have a duty to hire someone to restore the property to its original condition and then
request reimbursement from the insurance company. Generally, the insured has no duty to completely
repair property before obtaining reimbursement.
ANS -The driver other car endorsement can be added to an automobile policy to cover the insured
when the insured is operating a vehicle other than the specific vehicle named in the insured's policy.
ANS -Replacement cost is the cost of replacing the property without considering any depreciation,
though requirements must be met in order to get the full replacement cost. ACV is the replacement cost
of the property minus any depreciation. For losses to a dwelling or structure, the replacement cost
method is used. Personal property losses are reimbursed using the actual cash value (ACV) method.
, ANS -HO1 is the Basic Homeowner Policy, which covers the home's structure and the property inside,
BUT NOT FOR A COLLAPSE. Basic perils are covered under all homeowner's insurance policies include:
-Windstorm and hail damage (damage to the interior is covered only when the wind or hail first creates
a hole in the structure and then the interior is damaged)-Lightning/Fire/Explosion/Smoke (including
discharges from furnaces and boilers. Fireplaces are not included)-Vandalism/criminal mischief (unless
the premises has been vacant for at least 60 continuous days)-Damage caused by vehicles (unless
vehicle is owned or operated by the insured or residents of the insured property)-Damage caused by an
aircraft
ANS -Personal property that has been moved to a safe location to protect it from flood damage is
covered for up to 45 days at the new location under NFIP.
The National Flood Insurance Program (a/k/a NFIP) is a federally subsidized program that provides flood
insurance
ANS -Basic dwelling policies include the following other coverages:-Debris removal: Covers the cost of
removal of any debris resulting from a loss-
Property removal: Covers the cost of moving property to another location in order to protect it from a
covered peril-
Worldwide: Covers personal property wherever it is located on earth-
Improvements, alterations, and additions: Provides coverage to tenants making improvements or
alterations to a rented dwelling at their own expense-
Reasonable repairs: Coverage for reasonable repairs due to damage caused by a covered peril-
Fire department service charge: Provides coverage for fire department charges in the event that the fire
department is needed to take action to protect against a covered peril
ANS -. The NFIP is managed by the Federal Insurance Administration (a/k/a FIA). Flood insurance
coverage applies to a walled or roofed building permanently affixed to an above ground location. The
building and its contents (e.g., personal property) are covered.
ANS -A work van is an automobile for coverage purposes. Mobile Equipment includes tractors,
bulldozers, earthmovers, forklifts, digging machines and farm-related machinery. Mobile equipment is
self propelled, but is not covered within the definition of automobile. Mobile equipment is primarily
designed to be used off of public roadways.
QUESTIONS AND ANSWERS UPDATED 2024 -2025
ANS -The law of large numbers examines how likely an event will occur, such as using the information
that 1 in every 500 cars will be stolen and selling 500 auto policies to cover the one theft.
ANS -Solicitors sell insurance policies, receive insurance premiums and represent the insurance
company. They share several duties with agents and can work for agents, but they cannot issue or
countersign policies.
ANS -Rebating is the practice of returning a portion of the premium or the agent's/broker's
commission to the insured or providing other inducements (e.g., cash, gifts) to obtain the client's
business or to buy a policy from a specific insurer. While rebating is illegal in most states, it is currently
legal in California and Florida.
ANS -Solicitors sell insurance policies, receive insurance premiums and represent the insurance
company. They share several duties with agents and can work for agents, but they cannot issue or
countersign policies. Countersigning refers to the insurance agent's authentication of an insurance
contract. An agent is required to review and sign new insurance policies
ANS -In the event of a loss to property, aside from the insurance company, the insured also has
responsibilities, such as the duty to perform temporary repairs that are necessary to secure the
property, the duty to retain all receipts for materials and labor required to make any temporary repairs
and a duty to take reasonable action to prevent any additional damage to the property. The insured
does not typically have a duty to hire someone to restore the property to its original condition and then
request reimbursement from the insurance company. Generally, the insured has no duty to completely
repair property before obtaining reimbursement.
ANS -The driver other car endorsement can be added to an automobile policy to cover the insured
when the insured is operating a vehicle other than the specific vehicle named in the insured's policy.
ANS -Replacement cost is the cost of replacing the property without considering any depreciation,
though requirements must be met in order to get the full replacement cost. ACV is the replacement cost
of the property minus any depreciation. For losses to a dwelling or structure, the replacement cost
method is used. Personal property losses are reimbursed using the actual cash value (ACV) method.
, ANS -HO1 is the Basic Homeowner Policy, which covers the home's structure and the property inside,
BUT NOT FOR A COLLAPSE. Basic perils are covered under all homeowner's insurance policies include:
-Windstorm and hail damage (damage to the interior is covered only when the wind or hail first creates
a hole in the structure and then the interior is damaged)-Lightning/Fire/Explosion/Smoke (including
discharges from furnaces and boilers. Fireplaces are not included)-Vandalism/criminal mischief (unless
the premises has been vacant for at least 60 continuous days)-Damage caused by vehicles (unless
vehicle is owned or operated by the insured or residents of the insured property)-Damage caused by an
aircraft
ANS -Personal property that has been moved to a safe location to protect it from flood damage is
covered for up to 45 days at the new location under NFIP.
The National Flood Insurance Program (a/k/a NFIP) is a federally subsidized program that provides flood
insurance
ANS -Basic dwelling policies include the following other coverages:-Debris removal: Covers the cost of
removal of any debris resulting from a loss-
Property removal: Covers the cost of moving property to another location in order to protect it from a
covered peril-
Worldwide: Covers personal property wherever it is located on earth-
Improvements, alterations, and additions: Provides coverage to tenants making improvements or
alterations to a rented dwelling at their own expense-
Reasonable repairs: Coverage for reasonable repairs due to damage caused by a covered peril-
Fire department service charge: Provides coverage for fire department charges in the event that the fire
department is needed to take action to protect against a covered peril
ANS -. The NFIP is managed by the Federal Insurance Administration (a/k/a FIA). Flood insurance
coverage applies to a walled or roofed building permanently affixed to an above ground location. The
building and its contents (e.g., personal property) are covered.
ANS -A work van is an automobile for coverage purposes. Mobile Equipment includes tractors,
bulldozers, earthmovers, forklifts, digging machines and farm-related machinery. Mobile equipment is
self propelled, but is not covered within the definition of automobile. Mobile equipment is primarily
designed to be used off of public roadways.
