FLORIDA 2-20 INSURANCE LICENSE EXAM ACTUAL
EXAM QUESTIONS AND CORRECT ANSWERS WITH
RATIONALES GRADED A+
.Abandonment Clause - ANSWER-often contained in a p/c policy stating that the insured cannot abandon
damaged property to the (dump on) insurer and demand reimbursement for the full value.
.Accident - ANSWER-Sudden fortuitous event
.Accounts Receivable Coverage Form - ANSWER-Inland Marine Coverage form which insures against loss the
insured suffers becasuse of an inability to collect from customers when AR records are damaged.
.Actual Cash Value (ACV) - ANSWER-Current cost to replace and item of property at the time of loss, less an
allowance for depreciation. Most basic way to determine amount of reimbursement for a loss (Replacement
Costs -Depreciation).
.Admitted Aircraft Liability Coverage - ANSWER-Coverage sometimes written in conjunction w/ Aircraft
Passenger Liability which can provide reimbursement for death of dismemberment.
.Aggregate Limit - ANSWER-Type of policy limit found in liability policies which limits coverage to a specified
total amount for all losses occurring within the policy period.
.Agreed Value - ANSWER-Written with property insurance policies. It waives the coinsurance clause and
requires the insured to carry insurance equal to at least 80% of a signed statement of values filed with the
company
,.Aircraft Hull Insurance - ANSWER-Physical damage insurance provided to cover the loss or damage to an
insured aircraft, in motion, not in motion or both.
.Aircraft Liability Insurance - ANSWER-Coverage written to cover public and passenger liability and property
damage
.Airport and Air Meet Liability - ANSWER-Coverage that provides protection to airports for bodily injury and
property damage liability
.All Risk Insurance - ANSWER-Better known as "open perils" insurance. Ins protecting insured from loss arising
from any peril other than those perils specifically excluded by name. Opposite of Named Perils
.Allied Lines - ANSWER-Property coverages which are closely associated and frequently sold w/ fire ins. i.e.
Dwelling, Earthquake, Sprinkler ins.
.Annual Transit Policy - ANSWER-Inland Marine transportation insurance which insures a property owner for
goods being transported.
.Appraisal Clause - ANSWER-provides an appraisal procedure when the insured and the insurer are in
disagreement regarding the amount of the loss. Insured and insurer each choose and appraiser, who, failing to
agree, select and umpire.
.Assignment Clause - ANSWER-Condition in policy that specifies that transferring the policy to another is not
valid unless the company consent in writing.
.Automobile Mechanical Breakdown Insurance - ANSWER-Coverage designed to indemnify against the costs of
mechanical failures or breakdowns not covered under the manufacturer's warranty.
.Avaition Insurance - ANSWER-provides both liability and physical damage coverage for aircraft. aka Aircraft
Hull Insurance. Liablity coverage available seperately for hangarkeepers and airport owners.
, .Bail Bond - ANSWER-Surey bond that guarantees the principal will appear in criminal proceedings.
.Bailee - ANSWER-One who has temporary custody of property belonging to another. i.e. dry cleaners
.Bailee's Policy - ANSWER-Inland Marine ins. obtained by bailee, to cover loss or damage to customers'
property in the bailee's custody, without regard to liability.
.Barratry - ANSWER-Illegal acts committed willfully by a ship's master or crew for the purpose of damaging the
ship or cargo. This Ocean Marine peril includes hijacking, abandonment and embezzlement of cargo.
.Bid Bonds - ANSWER-Type of K bond which guarantees the obligee that if a contractor's bid is accepted, the
contracor will provide the required performance bond.
.Binder - ANSWER-Oral or written statment providing immediate insurance protection, valid for a specified
period. Desined to provide temporary coverage until a policy can be issued or denied.
.Blanket Insurance - ANSWER-Insurance where a single amount of insurance applies to two or more coverage
items which are subject to specific ratings. May result in coverage advantages to the insured.
.Blue Sky Bond - ANSWER-Surey bond required of investment companies, guaranteeing against
misrepresentations of securities and defrauding the public.
.Bodily Injury - ANSWER-Usually defined to include physical harm, sickness, disease, or death resulting from any
of these.
.Boiler and Machinery Coverage Form - ANSWER-covers the insured against loss (liability and physical damage)
arising out of the use of steam boilers or other machinery. Part of a Commercial Package Policy.
.Builder's Risk Coverage Form - ANSWER-provides coverage for buildings under construction as well as
equipment to service the building, owned materials and supplies, and temporary structures used in
construction. Part of the Commercial Propery portion of the Commericial Pakage Policy.
EXAM QUESTIONS AND CORRECT ANSWERS WITH
RATIONALES GRADED A+
.Abandonment Clause - ANSWER-often contained in a p/c policy stating that the insured cannot abandon
damaged property to the (dump on) insurer and demand reimbursement for the full value.
.Accident - ANSWER-Sudden fortuitous event
.Accounts Receivable Coverage Form - ANSWER-Inland Marine Coverage form which insures against loss the
insured suffers becasuse of an inability to collect from customers when AR records are damaged.
.Actual Cash Value (ACV) - ANSWER-Current cost to replace and item of property at the time of loss, less an
allowance for depreciation. Most basic way to determine amount of reimbursement for a loss (Replacement
Costs -Depreciation).
.Admitted Aircraft Liability Coverage - ANSWER-Coverage sometimes written in conjunction w/ Aircraft
Passenger Liability which can provide reimbursement for death of dismemberment.
.Aggregate Limit - ANSWER-Type of policy limit found in liability policies which limits coverage to a specified
total amount for all losses occurring within the policy period.
.Agreed Value - ANSWER-Written with property insurance policies. It waives the coinsurance clause and
requires the insured to carry insurance equal to at least 80% of a signed statement of values filed with the
company
,.Aircraft Hull Insurance - ANSWER-Physical damage insurance provided to cover the loss or damage to an
insured aircraft, in motion, not in motion or both.
.Aircraft Liability Insurance - ANSWER-Coverage written to cover public and passenger liability and property
damage
.Airport and Air Meet Liability - ANSWER-Coverage that provides protection to airports for bodily injury and
property damage liability
.All Risk Insurance - ANSWER-Better known as "open perils" insurance. Ins protecting insured from loss arising
from any peril other than those perils specifically excluded by name. Opposite of Named Perils
.Allied Lines - ANSWER-Property coverages which are closely associated and frequently sold w/ fire ins. i.e.
Dwelling, Earthquake, Sprinkler ins.
.Annual Transit Policy - ANSWER-Inland Marine transportation insurance which insures a property owner for
goods being transported.
.Appraisal Clause - ANSWER-provides an appraisal procedure when the insured and the insurer are in
disagreement regarding the amount of the loss. Insured and insurer each choose and appraiser, who, failing to
agree, select and umpire.
.Assignment Clause - ANSWER-Condition in policy that specifies that transferring the policy to another is not
valid unless the company consent in writing.
.Automobile Mechanical Breakdown Insurance - ANSWER-Coverage designed to indemnify against the costs of
mechanical failures or breakdowns not covered under the manufacturer's warranty.
.Avaition Insurance - ANSWER-provides both liability and physical damage coverage for aircraft. aka Aircraft
Hull Insurance. Liablity coverage available seperately for hangarkeepers and airport owners.
, .Bail Bond - ANSWER-Surey bond that guarantees the principal will appear in criminal proceedings.
.Bailee - ANSWER-One who has temporary custody of property belonging to another. i.e. dry cleaners
.Bailee's Policy - ANSWER-Inland Marine ins. obtained by bailee, to cover loss or damage to customers'
property in the bailee's custody, without regard to liability.
.Barratry - ANSWER-Illegal acts committed willfully by a ship's master or crew for the purpose of damaging the
ship or cargo. This Ocean Marine peril includes hijacking, abandonment and embezzlement of cargo.
.Bid Bonds - ANSWER-Type of K bond which guarantees the obligee that if a contractor's bid is accepted, the
contracor will provide the required performance bond.
.Binder - ANSWER-Oral or written statment providing immediate insurance protection, valid for a specified
period. Desined to provide temporary coverage until a policy can be issued or denied.
.Blanket Insurance - ANSWER-Insurance where a single amount of insurance applies to two or more coverage
items which are subject to specific ratings. May result in coverage advantages to the insured.
.Blue Sky Bond - ANSWER-Surey bond required of investment companies, guaranteeing against
misrepresentations of securities and defrauding the public.
.Bodily Injury - ANSWER-Usually defined to include physical harm, sickness, disease, or death resulting from any
of these.
.Boiler and Machinery Coverage Form - ANSWER-covers the insured against loss (liability and physical damage)
arising out of the use of steam boilers or other machinery. Part of a Commercial Package Policy.
.Builder's Risk Coverage Form - ANSWER-provides coverage for buildings under construction as well as
equipment to service the building, owned materials and supplies, and temporary structures used in
construction. Part of the Commercial Propery portion of the Commericial Pakage Policy.
