FLORIDA PERSONAL LINES EXAM 120 QUESTIONS &
CORRECT ANSWERS LATEST 2025
Which of the following is LEAST likely to be a factor when determining the
eligibility of a person for property insurance?
A.) The claims history showing when prior claims occurred and how much was
paid to settle the claim.
B.) The nature of the risk, such as the type of building and the number of families
living in the building.
C.) Existence of any hazards, such as nearby environmental risks
D.) Whether the premium will be paid in full or billed to the insured. - ANSWER-
D.) Whether the premium will be paid in full or billed to the insured.
Underwriting considers the nature of the risk, hazards, present, and claims
history. How the premium will be paid is not a favor in the determining an
applicants eligibility for insurance.
M and C both have Personal Auto policies with liability limits of 20/30/10. If M
borrows C's car and injures a pedestrian, causing injuries that will cost $5,000 to
treat, which policy will provide coverage for the injured party?
,A.) Both policies will share the loss on a pro rata basis.
B.) M's policy
C.) C's policy
D.) Neither policy, since C's car is not scheduled on M's policy - ANSWER-C.) C's
policy
Under personal auto policies, the auto owner's coverage is primary insurance, and
coverage for non-owned autos is excess insurance. Since C is the owner, C's policy
will cover the loss first, and M's policy will provide excess insurance if necessary.
This condition is established in the "Other Insurance" condition of both policies.
M has a liability insuring M's flower shop. After M sells the shop, the buyer asks if
M can transfer the liability policy as part of the sale. Which condition prevents M
from making this transfer without the insurer's consent?
A.) Assignment
B.) Liberalization
C.) Assumption of Risk
,D.) Subrogation - ANSWER-A.) Assignment
The assignment condition states a policy holder cannot transfer policy ownership
without the insurer's written consent
Which of the following is not a function of insurance?
A.) To protect against uncertainty and reduce anxiety
B.) To transfer risk from the insured to the insurer
C.) To exchange a small certain expense for a large uncertain loss
D.) To act as an investment vehicle for the insured - ANSWER-D.) To act as an
investment vehicle for the insured
Investment entails speculative risk, which is not Insurable
K has an unendorsed Special Form Homeowners policy with a $200,000 limit of
personal liability, and a Personal Umbrella Liability policy with a $1 million limit. A
suit is brought against K by a local business, claiming that K slandered the the
business on social media and caused business to decline. How will K's Personal
Umbrella Liability policy respond?
, A). The policy will only pay damages owed to the business that are in excess of
$200,000
B.) The policy drops down to act as primary insurance, and K must pay a self-
insured retention
C.) The policy does not cover claims made against K for personal injury
D.) Any damages covered by the policy as excess insurance will be subject to a
high deductible that K must pay - ANSWER-B.) The policy drops down to act as
primary insurance, and K must pay a self-insured retention.
Because personal injury coverage is NOT provided by the homeowners policy, the
coverage provided by the umbrella policy drops down to act as primary insurance,
requiring the insurer to pay the policy's self-insured retention. The umbrella
insurer will pay for the defense causes.
Coverage D of a dwelling policy covers which of the following losses?
A.) Loss if rental income due to the cancellation of a lease
B.) Access prevented by a civil authority because of a neighboring location's direct
loss by a peril covered under the insured's policy
C.) Additional living expenses after a covered loss
CORRECT ANSWERS LATEST 2025
Which of the following is LEAST likely to be a factor when determining the
eligibility of a person for property insurance?
A.) The claims history showing when prior claims occurred and how much was
paid to settle the claim.
B.) The nature of the risk, such as the type of building and the number of families
living in the building.
C.) Existence of any hazards, such as nearby environmental risks
D.) Whether the premium will be paid in full or billed to the insured. - ANSWER-
D.) Whether the premium will be paid in full or billed to the insured.
Underwriting considers the nature of the risk, hazards, present, and claims
history. How the premium will be paid is not a favor in the determining an
applicants eligibility for insurance.
M and C both have Personal Auto policies with liability limits of 20/30/10. If M
borrows C's car and injures a pedestrian, causing injuries that will cost $5,000 to
treat, which policy will provide coverage for the injured party?
,A.) Both policies will share the loss on a pro rata basis.
B.) M's policy
C.) C's policy
D.) Neither policy, since C's car is not scheduled on M's policy - ANSWER-C.) C's
policy
Under personal auto policies, the auto owner's coverage is primary insurance, and
coverage for non-owned autos is excess insurance. Since C is the owner, C's policy
will cover the loss first, and M's policy will provide excess insurance if necessary.
This condition is established in the "Other Insurance" condition of both policies.
M has a liability insuring M's flower shop. After M sells the shop, the buyer asks if
M can transfer the liability policy as part of the sale. Which condition prevents M
from making this transfer without the insurer's consent?
A.) Assignment
B.) Liberalization
C.) Assumption of Risk
,D.) Subrogation - ANSWER-A.) Assignment
The assignment condition states a policy holder cannot transfer policy ownership
without the insurer's written consent
Which of the following is not a function of insurance?
A.) To protect against uncertainty and reduce anxiety
B.) To transfer risk from the insured to the insurer
C.) To exchange a small certain expense for a large uncertain loss
D.) To act as an investment vehicle for the insured - ANSWER-D.) To act as an
investment vehicle for the insured
Investment entails speculative risk, which is not Insurable
K has an unendorsed Special Form Homeowners policy with a $200,000 limit of
personal liability, and a Personal Umbrella Liability policy with a $1 million limit. A
suit is brought against K by a local business, claiming that K slandered the the
business on social media and caused business to decline. How will K's Personal
Umbrella Liability policy respond?
, A). The policy will only pay damages owed to the business that are in excess of
$200,000
B.) The policy drops down to act as primary insurance, and K must pay a self-
insured retention
C.) The policy does not cover claims made against K for personal injury
D.) Any damages covered by the policy as excess insurance will be subject to a
high deductible that K must pay - ANSWER-B.) The policy drops down to act as
primary insurance, and K must pay a self-insured retention.
Because personal injury coverage is NOT provided by the homeowners policy, the
coverage provided by the umbrella policy drops down to act as primary insurance,
requiring the insurer to pay the policy's self-insured retention. The umbrella
insurer will pay for the defense causes.
Coverage D of a dwelling policy covers which of the following losses?
A.) Loss if rental income due to the cancellation of a lease
B.) Access prevented by a civil authority because of a neighboring location's direct
loss by a peril covered under the insured's policy
C.) Additional living expenses after a covered loss
