Florida 3-20 Public Adjusters State Exam : Complete Study Guide – Real Exam Questions & Answers for FL Public Adjuster License

Pass the Florida 3-20 Public Adjuster License Exam on your first attempt with this complete, up-to-date study guide for the certification cycle. This document contains real exam-style questions and verified answers covering all required content for the Florida Department of Financial Services (DFS) 3-20 Public Adjuster licensing examination. What’s Included – Complete Content Coverage: Insurance Fundamentals & Terminology: Declarations (identifies insured, endorsements, coverages, limits, premiums), assignment (policyholder cannot transfer policy without insurer's written permission), hazard (increases likelihood of loss), peril (actual cause of loss), alien insurer (domiciled outside US), proximate cause (unbroken chain of events), estoppel (insurer waives defense by continued action), agreed value policies (insurer and insured agree to specific value), bailee (care, custody, control of another's property), first-party claim (policyholder against own insurer), negligent entrustment (entrusting object leading to injury), moral hazard (conscious decision due to having insurance), binder (temporary coverage until policy written), completion bonds (guarantee loan payment upon completion), commercial insurers (for-profit, collect premiums, reserve portion to pay claims), independent adjuster (investigates/adjusts losses for insurer or self-insured), damages (result of insured's tort/wrongdoing), direct loss (physical harm caused by covered peril), obligee (recipient to principal), adhesion (take it or leave it contract), occurrence (event causing damage), civil authority (coverage if access denied due to covered peril), waiver (voluntary relinquishment of legal right), foreign insurer (domiciled outside state where writing insurance), commissioner (state officer administering insurance laws), bid bond (promise to accept bid if awarded), salvage (damaged property insurer takes over after paying claim), representations (factual statements policy based upon), contract of adhesion (consumer cannot negotiate terms), advertisements (publication about goods/services), strict torts/absolute liability (duty to make something safe – inherently dangerous), dwelling (house, structure, primary risk), deductible (amount of loss paid by policyholder), breach of warranty (violation of agreement between seller/buyer about condition/content/quality/title), indemnify (compensation, reparation), installation floater (covers contractor's equipment intended for permanent installation during transport/unload/install), third party (beneficiary of contract due to first party's negligence), quota share (reinsurance agreement – insurers pay claims in direct relationship to % of risk insured), risk sharing (sharing replacement cost), class action (legal action by one or more persons on behalf of themselves and others with identical interest), exclusions (loss or risk policy doesn't cover), insurance (technique to transfer risk using two-party contract), indemnity contract (legal document describing relationship between insured and insurer), strict liability (legal document making person responsible for damages regardless of fault), concealment (intention to withhold relevant information about risk), special investigations unit (subset of claims function investigating suspicious losses separately), implied waiver (insurer takes no action upon realizing material changes), intentional tort (acts committed without negligence but result in damages), barratry (willful/illegal sinking of ship at sea or its cargo), commercial inland marine (covers physical damage and liability – very broad), specific coverage (single insurance for only one kind of property at one location), statutes (legislative acts/laws), second party (insurance company risk transferred to), attractive nuisance (hazards on private property that attract trespassing – swimming pools, trampolines), estimates (approximate calculation of amount/extent/quality/magnitude/position/degree/worth), risk management (insurer assesses/mitigates/monitors risk items customers want to insure), reciprocity (granting privileges/licensing based on license in another state deemed equivalent), coverage (specific protection in insurance policy), licensee (individual holding license under authority of state), pollutants (any solid/liquid/gaseous/thermal irritant or contaminant – smoke, vapor, soot, fumes, acids, alkalis, chemicals), homeowners policy (package policy combining property and casualty coverages), indemnification (legal term for third-party claims – "to pay back or to make whole"), surety bonds (agreement by guarantor to answer to third person for debt/default of principal), additional living expense (ALE – necessary increase in living expense resulting from covered peril loss), actual cash value (replacement cost of like kind/quality at time of loss less reasonable depreciation), physical hazard (physical condition increasing chance of loss), exposure (openness to loss or damage), liberalization clause (changes broadening coverage on edition of policy automatically apply without premiums), fidelity bonds (protect employer from losses by employee), package policy (combination of property and liability coverages of two or more separate policies in one premium), hostile fire (fire not contained in vessel in which it was set), endorsement (written agreement attached to policy to add/subtract coverage), insured contract (covers lease of premiums, easements, sidetrack agreements, elevator maintenance agreements), assumption of liability (act of taking responsibility through agreement for something person may not be legally liable), diminution of value (property value decreased due to damage but property still has some value and can be used), recoverable depreciation (depreciation initially held back, then disbursed after proof of repairs), indirect loss (economic loss arising as consequence of direct/physical loss), proof of loss (statement made regarding extent of claim, may be requested in accordance with policy conditions), impaired property (tangible property other than products or work produced), law of large numbers (more times event repeated, more predictable outcome), underwriting (access eligibility of customer, decide coverage amount, determine premium), replacement cost (actual cost of replacing property due to covered peril with like kind/quality without depreciation), soft fraud (exaggerating otherwise legitimate claim for profit), reciprocal insurance exchange (unincorporated association where each member insures other members), policy (agreement and contract), warranty (ongoing assurance made by one party to another that certain facts are true), excess of loss (insurer pays each claim up to limit, reinsurer pays claim above specified limit), bailor (person who voluntarily gives up possession of property), ocean marine (one of earliest forms of insurance), field adjuster (adjuster who works primarily outside office, often meets personally with public), arson (purposefully setting fire to property – not covered if act committed by insured), misrepresentation (attempt by applicant to deceive insurance company), contents (personal property not part of dwelling or structure), umpire (individual used when claim has been questioned – unbiased party required to resolve dispute), loss (amount insurer must pay insured to meet promises outlined in contract – reduction in value of insured item), amendment (addition, deletion, or change to legal document or policy), declarations page (section of policy identifying insured, endorsements, coverages, limits, premiums), coinsurance (reinsurance agreement where insurers pay claims in direct relationship with % of risk they are insuring), insurable interest (financial investment or dependency individual/business has in person or property), negligence (failure to use care reasonable/prudent person would have used under same/similar circumstances), unilateral insurance contract (insurer has obligation to pay covered loss – insured has no obligation), speculative risk (uninsurable because of possibility of either loss or gain), non-recoverable depreciation (depreciation from total replacement cost due to age, use, condition – resulting amount is actual cash value). Florida Statutes for Public Adjusters (626.854): (3) Public adjuster may not give legal advice or act on behalf of/aid any person in negotiating/settling claim relating to bodily injury, death, or noneconomic damages. (5) May not directly/indirectly solicit insured or claimant except Monday through Saturday, 8 a.m. to 8 p.m. (6) Insured/claimant may cancel contract within 3 business days after execution or after notifying insurer of claim (whichever later) – no penalty/obligation; notice must be written, sent certified mail/other proof of mailing. (7) Unfair/deceptive trade practice to circulate/disseminate advertisement with untrue/deceptive/misleading statements. (7)(a) Deceptive/misleading statements include: inviting claim when no covered damage, offering monetary/other valuable inducement, claiming "no risk" to policyholder, implying solicitation issued/distributed by governmental agency. (7)(b) Written advertisements (newspapers, magazines, flyers, bulk mailers – NOT business cards) must contain bold print/capital letters disclaimer: "THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU MAY DISREGARD THIS ADVERTISEMENT." (8) Public adjuster/apprentice may not give or offer monetary loan/advance to client/prospective client. (9) May not give or offer any article of merchandise with value $25 for advertising or as inducement to enter contract. (10)(a) For reopened/supplemental claim, compensation based only on additional payments obtained through adjuster's work – may not exceed 20% of reopened/supplemental claim payment. (10)(b) Compensation limits: 10% of claim payments for claims based on events subject to Governor's state of emergency declaration (within 1 year after declaration); after that year – 20% for non-emergency claims. (10)(c) Compensation may not be based on deductible portion of claim. (10)(d) Any maneuver/shift/device exceeding compensation limits is violation punishable under s. 626.8698. (11) Public adjuster must provide claimant/insured written estimate of loss – retain for 5 years. (12) May not accept referrals with agreement to compensate person for referring business (except another public adjuster). (13) Company employee adjuster/independent adjuster/attorney/investigator/others acting on behalf of insurer must provide at least 48 hours' notice to insured/claimant/public adjuster/legal representative before scheduling meeting or onsite inspection. Insured/claimant may deny access if notice not provided; may waive 48-hour notice. (14) Public adjuster must ensure prompt notice to insurer, provide contract to insurer, property available for inspection, insurer given opportunity to interview insured directly. Insurer must be allowed to obtain necessary information. (14)(a) Insurer may not exclude public adjuster from in-person meetings with insured; both parties shall meet/communicate to reach agreement on scope of covered loss. (14)(b) Public adjuster may not restrict/prevent insurer's reasonable access at reasonable times to insured/claimant or insured property. (14)(c) Public adjuster may not act or fail to reasonably act in manner that obstructs/prevents insurer's timely inspection; if unavailability of public adjuster delays inspection, must allow access without public adjuster's presence. (15) Licensed contractor (part I, chapter 489) may not adjust claim on behalf of insured unless licensed as public adjuster; contractor may discuss/explain bid for construction/repair with property owner or insurer for usual/customary fees. (16) Public adjuster shall not acquire interest in salvaged property except with written consent and signed affidavit from insured. (17) May not enter contract or accept power of attorney that vests effective authority to choose persons/entities performing repair work or providing goods/services requiring insured/third-party claimant to expend funds beyond amounts payable to public adjuster under adjusting services contract. (18) Subsections (5)-(17) apply only to residential property insurance policies and condominium unit owner policies (s. 718.111(11)). (19) Except as otherwise provided, no person except attorney at law or public adjuster may for money/commission/other thing of value directly/indirectly: (a) prepare/complete/file insurance claim for insured or third-party claimant; (b) act on behalf of or aid insured/third-party claimant in negotiating for/effecting settlement of claim for loss/damage; (c) advertise for employment as public adjuster; or (d) solicit/investigate/adjust claim on behalf of public adjuster, insured, or third-party claimant. Florida Statutes for Public Adjusters (Additional – from file): 626.8796 – Public Adjuster Fraud Statement. 817.234 (felony), 775.082, 775.083, 775.084 (punishments). 627.409 – misrepresentation by insured – only defense for insurer if they didn't know and it would have affected coverage offer. Residential property policy in effect for 90 days to hold insured immune to 627.409 (fraud by insured). 627.7011 – statute requiring that when property insured for replacement cost is deemed total loss, full replacement cost without reservation or holdback of depreciation must be paid. 627.70131 – Insurer's duty: acknowledge communications within 14 calendar days (unless payment made within that time or failure caused by factors beyond control); within 10 working days after receiving proof of loss statements, begin reasonable investigation; within 90 days after receiving notice of initial/reopened/supplemental property insurance claim, pay or deny claim or portion (unless failure to pay caused by factors beyond control). 627.70132 – statute of limitations for windstorm damage claim – 3 years. 627.7015 – Mediation Statute – Department shall adopt property insurance mediation program. 627.70131(5) – Full replacement cost without reservation or holdback of depreciation. 626.8695 – Primary Adjuster – each adjusting firm and branch must designate adjuster responsible for supervision of all individuals within adjusting firm. 626.9541 – Unfair and deceptive insurance trade practices. Citizens Property Insurance Corporation: Residential Property and Casualty Joint Underwriting Association (FRPCJUA) originally created by statute – known as Citizens Property Insurance Corporation. Provides insurance for residential and commercial property for applicants who in good faith are unable to procure insurance through voluntary market. FWUA (Florida Windstorm Underwriting Association) merged with FRPCJUA as Citizens. FIGA (Florida Insurance Guaranty Association) – nonprofit corporation created 1970, establishes and maintains service-oriented operation for processing covered claims of insolvent members, servicing pending claims by or against Florida policyholders of member insurance companies which become insolvent and are ordered liquidated. FAJUA – Florida Automobile Joint Underwriting Association. FRPCJUA – merged with FWUA to become Citizens. Citizens provides coverage for residential and commercial property. Dwelling Policy Forms (DP-1, DP-2, DP-3): DP-1 Basic Form – perils: fire, lightning, internal explosion. DP-2 Broad Form – covers DP-1 perils with ECE and optional VMM endorsement, plus: burglars, falling objects, weight of snow/ice/sleet, accidental discharge/overflow of water/steam, sudden/accidental tearing apart/cracking/burning/bulging of steam/hot water heating system/AC/fire protective sprinkler system/appliance for heating water, freezing of plumbing/heating/AC/fire protective sprinkler system/household appliance, sudden/accidental damage from artificially generated electrical current. DP-3 Special Form – covers dwelling and other structures on open perils basis, except perils specifically excluded. Under DP-2 or DP-3, maximum paid for "loss of use"/ALE – 20% of Dwelling Coverage. Homeowners Policy Forms (HO-2, HO-3, HO-4, HO-5, HO-6, HO-8): HO-2 – named peril (16 perils). HO-3 – Special Form – covers owner-occupied dwelling, private structures, unscheduled personal property (on broad named perils basis), loss of use; dwelling/other structures on all risks basis; dwelling/other structures paid on replacement cost basis; personal property paid on ACV basis. HO-4 – Renter's policy – personal property covered for broad perils. HO-5 – open perils form – lists exclusions; common exclusions include earth movement, ordinance/law, water damage (flood/sewer backup/seepage), power failure, war, nuclear hazard, intentional loss, government action, collapse, theft to dwelling under construction, vandalism/malicious mischief if vacant 60 days, mold/fungus/wet rot, neglect/wear/tear/deterioration, mechanical breakdown, smog/rust/corrosion, smoke from agricultural smudging/industrial operations, discharge/dispersal/seepage of pollutants, settling/shrinking/bulging/expanding of foundation, infestation of birds/vermin/rodents/insects, animals owned by insured. HO-6 – Condominium/co-op unit owner coverage – personal property coverage, liability coverage, coverage for improvements to unit. HO-8 – Modified version for older homes (typically 40 years) unable to attain HO-3; covers dwelling, personal property, liability, loss of use but not as broad as HO-3/HO-5. Homeowners Coverage A – Dwelling (building and structures attached; construction materials/supplies on or adjacent to premises). Coverage B – Other Structures/Appurtenant Structures (10% of Coverage A). Coverage C – Personal Property – actual cash value – usually 50% of Coverage A. Coverage D – Loss of Use – standard limit for HO-2, HO-3, HO-5 – 30% of Coverage A. Four additional coverages: claims expense, first aid expenses, damage to property of others, loss assessment. Homeowners Policy Loss Settlement: Loss Settlement covers buildings under Coverages A & B to full replacement cost if limit of insurance at time of loss is 80% or more of replacement value of building. Hurricane coverage occurs on annual basis (not per occurrence). If more than one applicable deductible – only highest deductible applies. Insured wishing to completely reject windstorm coverage must handwrite: "I DO NOT WANT THE INSURANCE ON MY (HOME/MOBILE HOME/CONDOMINIUM UNIT) TO PAY FOR DAMAGE FROM WINDSTORMS OR HURRICANES. I WILL PAY THOSE COSTS. MY INSURANCE WILL NOT." Insurer must give 120 days' notice of non-renewal of homeowner's policy. Commercial General Liability (CGL) Contract: Contents: Declarations Form, Common Policy Conditions Form, Occurrence Form or Claims Made Form, Nuclear Energy Liability Exclusion Endorsement. Declarations include: Named Insured (address), Policy Period, Premium, Limits of Coverage. 7 Common CGL Conditions: Cancellation (30 days by insurer option, 10 days by non-payment), Changes, Examination of Books, Inspections and Surveys, Premiums, Transfer, Nuclear Endorsement. Products/completed operations hazard – CGL coverage for BI/PD arising out of products or work completed. Occurrence – accident, including continuous/repeated exposure to substantially same general harmful conditions. Accident – sudden, unexpected event. Coverage trigger difference: Occurrence Form applies to BI/PD regardless of when claim made; Claims-Made Form applies only to BI/PD occurring on or after retroactive date. Business Auto Coverage Form – Physical Damage Coverage: Comprehensive Coverage – from any cause except (1) covered auto's collision with another object or (2) covered auto's overturn. Specified Causes of Loss Coverage – fire/lightning/explosion, theft, windstorm/hail/earthquake, flood, mischief/vandalism, sinking/burning/collision/derailment of conveyance transporting covered auto. Collision Coverage – caused by (1) covered auto's collision with another object or (2) covered auto's overturn. Part D – Insurer agrees to pay amount in excess of deductible for direct/accidental loss to covered car or any other car specified in agreement – pays for damage or theft. Valuation of Mobile/Manufactured Homes: If manufactured home's homeowners policy has value on it in valued policy state, insurer pays up to limit if home deemed total loss. Some policies allow homes less than certain age (e.g., 10 years) to be valued at replacement cost. Basic/Broad/Special Form Perils (Commercial Property): Basic Form – 11 perils: Fire or Lightning, Smoke, Windstorm or Hail, Explosion, Riot or Civil Commotion, Aircraft (striking property), Vehicles (striking property), Glass Breakage, Vandalism & Malicious Mischief, Theft, Volcanic Eruption. Broad Form – same 11 perils plus 6 more: Falling objects, Weight of ice/snow/sleet, Accidental discharge/overflow of water/steam from within plumbing or related systems (does not include sump), Sudden/accidental rupture of heating/AC/fire protective sprinkler/hot water heating system, Freezing of plumbing or related systems, Sudden/accidental damage from artificially generated electrical current. Special Form – "all risk" coverage unless specifically excluded. Florida No-Fault Tort Exemption: Those who comply with law granted limited immunity from suits of others through PIP coverage. Four exceptions to tort exemption (threshold of no-fault): (1) Significant and permanent loss of bodily function; (2) Permanent injury other than scarring/disfigurement; (3) Significant and permanent scarring/disfigurement; (4) Death. SR-22: Drivers convicted of DUI or traffic felony over prior 3 years required to have 100/300/50 coverage or certificate of self-insurance of $350,000. NFIP (National Flood Insurance Program): Homeowners Flood Insurance Affordability Act of 2014 allows private carriers to write off four different types of flood coverages. Valued Policy Law: Requires payment of face amount of insurance to insured if total loss to real property occurs from peril specified in law. Coinsurance: Policy for less than entire value of insured property – covers pro-rata whether or not other insurance exists; 80% means pro-rata share/80%. Tort Liability: Two types – Negligent Liability (unintentional) and Strict Liability (intentional). Two main defenses against negligence: Assumption of Risk and Comparative Negligence. Contracts: Contracts of Adhesion – parties of unequal bargaining power; rule of law – ambiguities resolved in favor of insured. Waivers: Two types – Explicit and Implied. Settlement and Release Options: Full release settlement, open-ended release, payment of PD/BI pending, no release, advanced payment, structured settlement, rehabilitation (including provisions for rehabilitative treatment of claimant). Apportionment: When two or more contracts cover same claim and have to pay proportionate amounts. Guiding principles – principles guiding apportionment to avoid controversy that could delay adjustment. Minor Injury Settlement: Maximum injury to minor that can be settled out of court (preferably with both parents) – $15,000 (statute 744.387). Florida Unfair Insurance Trade Practices Act – Practices Insured Protected From: (1) failing to act promptly; (2) denying claims without reasonable investigation; (3) failure to affirm or deny claim when insured entitled thereto; (4) failure to explain claim denials in writing; (5) failure to maintain complaint-handling procedures (keeping accurate records of complaints). Primary Adjuster (626.8695): Department requires each adjusting firm and each branch to designate adjuster responsible for supervision of all individuals within adjusting firm. Code of Ethics (FAC 69B-220.201): Work of adjusting claims engages public trust. Adjuster shall put duty for fair/honest treatment of claimant above adjuster's own interests. Adjuster shall treat all claimants equally. 7 Ethics to Code of Ethics: (1) No negotiating with attorney's client; (2) No misleading in any way; (3) No legal advice; (4) No special releases – fill in blanks only; (5) No exploiting incapacitated clients; (6) Advise client of rights under contract and by state; (7) Act with no bias. 6 Rights of Insured: (1) Acknowledgement in 14 days; (2) Approval or denial in 30 days; (3) Full payment as applicable in 90 days; (4) Free mediation; (5) Neutral evaluation of sinkhole claim; (6) Availability of assistance from Department of Consumer Services. Public Adjuster Responsibilities: Evaluate existing insurance policies to determine applicable coverage, prepare documents and support claim on behalf of insured, negotiate settlement with insurance company on behalf of insured. Public Adjuster Continuing Education Requirements: 5 hours law and ethics, 19 hours elective credits – every 2 years. Public Adjuster License Expiration: Adjuster license can hold only one appointment at a time. If unappointed for 48 months, license expires. Proof of Loss Requirements: Submit within 30 to 60 days after damages occur. Commingling: Illegal practice occurring when agent mixes personal funds with insured's or insurer's funds. Public Adjuster Fraud Statement: 626.8796 – felony warnings required in public adjuster contracts. 817.234 is felony; 775.082, 775.083, 775.084 are punishments. Re-opened Claim Limit – Public Adjuster Share: 20% (626.854(10)(a)). Insured Cancellation of Public Adjuster Contract: 3 business days (626.854(6)). Public Adjuster Written Estimate Retention: 5 years (626.854(11)). Public Adjuster Loan/Advance to Client: Not permitted (626.854(8)). Public Adjuster Acquisition of Interest in Salvaged Property: Not permitted without written consent and signed affidavit (626.854(16)). Insurer's 3 Goals When Handling Claim: (1) Comply with contract; (2) Control costs; (3) Cultivate good customer relations. 3 Basic Claims Handling Activities: (1) Investigate; (2) Evaluate; (3) Negotiate. 5 Technical Expertise for Successful Negotiation: (1) Insurance contract; (2) Reparable from replacement requiring damages; (3) Law; (4) Insurer's goals; (5) Computer estimating systems being utilized by insurance industry. 5 Questions to Establish Contract Coverage: (1) Did covered peril occur? (2) When? (3) Were there more than one? (4) Which one was proximate cause? (5) Was there mix of covered and uncovered losses? 5 Ways to Appraise Damages: (1) Survey and estimate of determination; (2) Acceptance of cost or quality shown by records; (3) Actual repair or replacement; (4) Sale of salvage; (5) Appraisal (after two parties have failed to agree). 4 Elements of Valid Contract: (1) Manifestation of assent to its terms by parties who make contract; (2) Sufficient consideration (value or payment) for each promise; (3) Legal capacity of parties to contract; (4) Legal subject matter. Valued Policy State – Mobile Homes: Mobile home valued policy law – insurer pays up to limit listed on policy if home deemed total loss. What does NFIP stand for? National Flood Insurance Program. When might "Loss Settlement" cover buildings under Coverages A & B to full replacement cost? If limit of insurance at time of loss is 80% or more of replacement value of building. Statute requiring full replacement cost without reservation or holdback of depreciation for total loss: 627.7011. If more than one applicable deductible: Only the highest deductible applies. Perfect for Florida 3-20 Public Adjuster License Exam, Florida insurance adjusting certification, public adjuster continuing education, and insurance claims professional preparation.