FLORIDA 2-20 AGENTS LICENSE PRACTICE
EXAM WITH Q&A NEWLY MODIFIED 2025/2026
LATEST
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 -- ANSWER--Personal liability insurance.
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 --
ANSWER--Risk transfer.
One of the costs of insurance is said to be opportunity costs. This means that if
capital and labor were not being used in the insurance business, they could be
used elsewhere and making other productive contributions to -- ANSWER--
Society
Retention is often used in combination with insurance as a way of treating loss
exposures. One of the major downsides of individuals using retention alone is --
ANSWER--The potential for financial ruin.
Page 1 of 61
,The process of restoring an individual or organization to a pre-loss financial
condition is the process of -- ANSWER--Indemnification
Sometimes the existence of insurance encourages losses. The result of this
phenomenon is that it -- ANSWER--Increases the total cost of insurance
A small business owner concerned about something happening and not being
able to work or earn a living for an extended period of time due to an accident
should purchase -- ANSWER--Disability insurance.
Which of the following is/are not a "your covered auto" under a Personal Auto
Policy for Liability? -- ANSWER--The 1990 Chevy 22 days after you purchase
it as an additional vehicle for your son who just got his license.
Joe has a Personal Auto Policy with one car with liability of 10/20/10, basic PIP,
10/20 UM and no Med Pay. His Florida neighbor has an identical policy on her
care. Joe is driving her car, loses control; and hits a tree. Joe is hurt with
$15,000 in medical bills. What is the maximum Joe can collect from UM from
all sources from this accident? -- ANSWER--$0
Which one of the following has special limits of liability within Coverage C of
the HO-3—Special Form (HO-3)? -- ANSWER--Theft of firearms
Page 2 of 61
,A storm causes power lines to break ten miles from the insured's premises. The
loss of electrical power causes food in the insured's freezer to thaw and spoil.
Coverage for this loss is -- ANSWER--Excluded because the power failure
occurred off the residence premises.
If law enforcement officials seize an insured's personal computer to search for
files that might be related to a crime, the insured under an HO-3—Special Form
(HO-3) may be unsuccessful in claiming a theft loss on the computer due to the
-- ANSWER--Governmental Action exclusion.
Sam and Sophia insure their house with an unendorsed HO-3—Special Form
(HO-3) policy. Sam stores a small fishing boat and trailer behind the house.
While they are out for the evening, a fire destroys most of their kitchen and
completely destroys the boat and trailer. Assuming Sam's boat and trailer are
valued at $4,000 and ignoring any deductible that may apply, what amount will
their HO-3 insurer pay for the loss of the boat and trailer? -- ANSWER--$1,500
The Florida Valued Policy Law applies to: -- ANSWER--mobile homes
For a Dwelling Flood policy, which is correct: -- ANSWER--Primary residences
are covered at replacement cost on building losses.
Page 3 of 61
, Sally insures her house with an unendorsed HO-3—Special Form (HO-3) with a
Coverage A—Dwelling limit of $275,000, which is the replacement cost of the
house. A fire destroys the house including a collection of blueprints belonging to
Sally's employer, valued at $10,000. Sally was storing the blueprints at her
home while her office was changing locations. Assuming no deductible applies,
how much, if any, will Sally's HO-3 insurer pay to replace the blueprints? --
ANSWER--$0
One of the main factors used in developing a base premium for a homeowners
policy is -- ANSWER--The public protection class.
Bert and Maggie 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 fire destroys their detached garage. The cost to
replace the garage is $35,000. Ignoring any deductible that may apply, how
much will Bert and Maggie's insurer pay to replace the detached garage? --
ANSWER--$30,000
Coverage for other structures is automatically provided under the HO-3—
Special Form (HO-3) policy with a limit that is -- ANSWER--10 percent of the
Coverage A limit
Renee is an insured under an unendorsed HO-3—Special Form (HO-3) with a
Coverage C—Personal Property limit of $100,000. She owns a secondary
Page 4 of 61
EXAM WITH Q&A NEWLY MODIFIED 2025/2026
LATEST
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 -- ANSWER--Personal liability insurance.
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 --
ANSWER--Risk transfer.
One of the costs of insurance is said to be opportunity costs. This means that if
capital and labor were not being used in the insurance business, they could be
used elsewhere and making other productive contributions to -- ANSWER--
Society
Retention is often used in combination with insurance as a way of treating loss
exposures. One of the major downsides of individuals using retention alone is --
ANSWER--The potential for financial ruin.
Page 1 of 61
,The process of restoring an individual or organization to a pre-loss financial
condition is the process of -- ANSWER--Indemnification
Sometimes the existence of insurance encourages losses. The result of this
phenomenon is that it -- ANSWER--Increases the total cost of insurance
A small business owner concerned about something happening and not being
able to work or earn a living for an extended period of time due to an accident
should purchase -- ANSWER--Disability insurance.
Which of the following is/are not a "your covered auto" under a Personal Auto
Policy for Liability? -- ANSWER--The 1990 Chevy 22 days after you purchase
it as an additional vehicle for your son who just got his license.
Joe has a Personal Auto Policy with one car with liability of 10/20/10, basic PIP,
10/20 UM and no Med Pay. His Florida neighbor has an identical policy on her
care. Joe is driving her car, loses control; and hits a tree. Joe is hurt with
$15,000 in medical bills. What is the maximum Joe can collect from UM from
all sources from this accident? -- ANSWER--$0
Which one of the following has special limits of liability within Coverage C of
the HO-3—Special Form (HO-3)? -- ANSWER--Theft of firearms
Page 2 of 61
,A storm causes power lines to break ten miles from the insured's premises. The
loss of electrical power causes food in the insured's freezer to thaw and spoil.
Coverage for this loss is -- ANSWER--Excluded because the power failure
occurred off the residence premises.
If law enforcement officials seize an insured's personal computer to search for
files that might be related to a crime, the insured under an HO-3—Special Form
(HO-3) may be unsuccessful in claiming a theft loss on the computer due to the
-- ANSWER--Governmental Action exclusion.
Sam and Sophia insure their house with an unendorsed HO-3—Special Form
(HO-3) policy. Sam stores a small fishing boat and trailer behind the house.
While they are out for the evening, a fire destroys most of their kitchen and
completely destroys the boat and trailer. Assuming Sam's boat and trailer are
valued at $4,000 and ignoring any deductible that may apply, what amount will
their HO-3 insurer pay for the loss of the boat and trailer? -- ANSWER--$1,500
The Florida Valued Policy Law applies to: -- ANSWER--mobile homes
For a Dwelling Flood policy, which is correct: -- ANSWER--Primary residences
are covered at replacement cost on building losses.
Page 3 of 61
, Sally insures her house with an unendorsed HO-3—Special Form (HO-3) with a
Coverage A—Dwelling limit of $275,000, which is the replacement cost of the
house. A fire destroys the house including a collection of blueprints belonging to
Sally's employer, valued at $10,000. Sally was storing the blueprints at her
home while her office was changing locations. Assuming no deductible applies,
how much, if any, will Sally's HO-3 insurer pay to replace the blueprints? --
ANSWER--$0
One of the main factors used in developing a base premium for a homeowners
policy is -- ANSWER--The public protection class.
Bert and Maggie 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 fire destroys their detached garage. The cost to
replace the garage is $35,000. Ignoring any deductible that may apply, how
much will Bert and Maggie's insurer pay to replace the detached garage? --
ANSWER--$30,000
Coverage for other structures is automatically provided under the HO-3—
Special Form (HO-3) policy with a limit that is -- ANSWER--10 percent of the
Coverage A limit
Renee is an insured under an unendorsed HO-3—Special Form (HO-3) with a
Coverage C—Personal Property limit of $100,000. She owns a secondary
Page 4 of 61
