Florida General Lines Agent Exam

questions and answers 2023/2024

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What is the definition of a risk that is insurable?

a.Risk is defined as a chance or the possibility of financial loss; only pure risks are
insurable as there is no possibility of a gain
b.A chance of a loss or gain
c.A risk where there is a possibility of a gain
d.A chance for insurance coverage
Answer a

What is an insurance policy?

a.A binder that offers initial insurance coverage
b.An oral agreement related to insurance
c.A temporary agreement for insurance coverage
d.A written agreement or contract for insurance coverage Correct Answer
.
What is an insurance binder?
a.An agreement with an insurer for coverage
b.A temporary agreement for insurance coverage subject to the decision of the
insurer Correct Answer
c.A permanent agreement for insurance coverage
d.An agreement with an agent

The term casualty is related to all the following insurance lines except?
a.Life and health insurance Correct Answer
b.Marine insurance
c.Insurance on property
d.Liability insurance

What is the mathematical concept where the actual results from an event being
measured will equal the predicted or expected results as the number of units or
trials increases?
Answer The concept of The Law of Large Numbers.

What insurance principle acts to place an insured in the same or similar financial
position after a loss as was prior to the loss event?
a.The indemnity principle Correct Answer
b.The waiver principle
c.The principle of utmost good faith
d.The principle of subrogation

What type of contract prevents an insured from transferring the interest of an

insurance policy to another?
a.A personal contract Correct Answer
b.An indemnity contract
c.A subrogation contract
d.A contract of good faith
a
What type of contract is one where the obligation of the insurer is to perform the
terms of the contract and is based on the insured satisfying certain conditions?
a.A binding contract
b.A personal contract
c.A conditional contract Correct Answer
d.An adhesion contract

What type of contract is it that the insured cannot negotiate the terms of the
contract and must accept the terms specified in the contract?
a.An indemnity contract
b.A conditional contract
c.A contract of adhesion Correct Answer
d.A personal contract

What type of interest (financial or legal) in property must an insured have to

benefit from a loss that is insured?
a.Insurable interest Correct Answer
b.An adhesion interest
c.An indemnity interest
d.A personal interest
What insurance doctrine states that a cause of a loss and all other directly related
events flowing from the same cause of the loss would be considered as one
event?
a.The doctrine of insurable interest
b.The doctrine of proximate cause Correct Answer
c.The loss doctrine
d.The doctrine of classification

John got in an accident that damaged his automobile, what would be considered
as what type of loss?
a.Direct loss Correct Answer
b.Insured loss
c.Insurable loss
d.Indirect loss

John's home was totally destroyed by fire that resulted in him moving his family
to a hotel. The cost of the hotel would be considered as what type of loss?

a.A direct loss

b.Direct expenses
c.An indirect loss Correct Answer
d.Insured loss

What insurance clause is related to a lender or creditor's interest in real property

and the insurer would pay losses to all parties that have an interest in the same
property?

a.Subrogation clause
b.Mortgage or mortgagee clause Correct Answer
c.Property loss clause
d.Loss payable or payee clause
What insurance clause is related to a creditor's interest in personal property such
as an auto?

a.The property interest clause

b.The mortgage or mortgagee clause
c.The creditor interest clause
d.The loss payable or loss payee clause Correct Answer

Which of the following is not a legal requirement for a contract?

a.All are legal requirements Correct Answer

b.The contract must have a legal purpose and transfer of consideration
(something of value such as payment of insurance premiums)
c.There must be a valid offer and a voluntary acceptance
d.The parties to the contract must have legal capacity to contract

What insurance loss settlement method is defined as the cost to replace the item
less allowance for depreciation, and is the common method used for settlement
of personal property losses?

a.Scheduled settlement method

b.Valued or stated settlement method
c.Actual cash value settlement method Correct Answer
d.Replacement cost (RC) settlement method

What insurance loss settlement method is defined as: the property loss is
replaced with items that are similar and of like kind and quality, and is the
common method used in settling real property losses?

a.Replacement cost settlement method Correct Answer

b.Actual cash value settlement method
c.Scheduled settlement method
d.Valued or stated settlement method
a
What insurance settlement method is defined as: the insurer agrees in advance to
pay the value of the property insured up to the coverage limits regardless of the
property ACV or RC

a.Actual cash value ACV settlement method

b.Valued or stated settlement method Correct Answer
c.Replacement cost (RC) settlement method
d.Structured settlement method

What settlement method is related to the price a willing buyer will pay for the
property?
The market value Answer

The remaining value of property after a total loss is referred to as?

Salvage value Answer

The Florida law that states that an insured must pay the full coverage limits on
property when there is a total loss is referred to as?
Florida valued policy law Answer

A property valued at $100,000 is insured for $56,000 on a property policy that has
a coinsurance requirement of 80%. What amount of the loss is payable by the
insurer if there is a loss of $20,000? The coinsurance formula is C / R x L where C is
the amount of insurance CARRIED by the insured on the property. R is the amount
of insurance coverage REQUIRED by the insurer based on the coinsurance
requirement and L is the amount of the LOSS. The amount payable for the loss
would be?
loss would be $14,000 ($56,000 / $80,000 (80% of $100,000) x $20,000.
Calculate the amount payable for a loss of $50,000 based on a property that is
valued at $200,000 and the property is insured for $120,000 on a policy that
requires a coinsurance amount of 80%?

a.$37,500 ($120,000 / $160,000 (80% of $200,000) x $50,000) Correct Answer

b.$10,000 (20% of $50,000)
c.$50,000 (100% of $50,000)
d.$40,000 (80% of $50,000)
There are 2 properties insured, property #1 has an insurance limit of $200,000
and property #2 has a coverage amount of $300,000. What would be the total
coverage limit based on the properties being insured on a blanket basis?

a.Each property would be insured for their coverage limits

b.$300,000 would be the blanket limit
c.$500,000 ($200,000 + $300,00) Correct Answer
d.$200,000 would be the blanket limit
A property policy is insured with a standard deductible of $500 and there is a loss
of $5,000. What would the insurer pay for the loss?
$4,500 ($5,000 - $500) Answer

A property is insured with a franchise deductible of $500 and there is a $5,000

loss. What amount of the loss would be payable by the insurer?
$5,000 (the entire loss would be paid as the loss exceed the deductible). Answer

An agreement that pays on behalf of an insured as defined by the policy or

coverage the amount that the insurer is legally liable for up to the limits of the
policy is considered?
legal liability Answer

An insured auto is insured for $30,000 liability coverage that applies to both
bodily injury and property damage would be considered as?

a.Single limit of liability Correct Answer

b.Total liability
c.Aggregate limit of liability
d.Split limits of liability

John's auto is insured for 10/20/10 liability split limits. Explain how the limits
would be applied if there is an accident?
$10,000 would be the limit that would apply to any 1 person bodily injury.
$20,000 would be the limit that would apply to 2 or more persons injury and
$10,000 would be the limit that would apply to the property damage. Answer
A policy with one limit that would apply to all losses that occur during the policy
period would be considered as what type of liability limit?
aggregate limit of liability Answer

Liability insurance only pays for?

monetary damages,Remember liability insurance does not cover punitive
damages which are damages a court may impose on someone due to gross
negligence or willful regard for the welfare of others Answer

What type of legal liability is imposed on a person regardless of fault for liability
such as liability for employee injury and manufacturing of chemicals or other
dangerous substances?
absolute or strict liability Answer

What type of liability may be imposed on someone for the negligent acts of
others within the person's control or supervision or for employees acting within
the scope of the authority granted?
vicarious liability Answer
The following are legal requirements for bringing a suit involving negligence
except?

a.All are legal requirements Correct Answer

b.The person must fail to perform the legal duty
c.The person must be under a legal duty to perform some action
d.The injury must be the proximate (related) cause of the failure to perform

Which of the following legal damages are not covered by liability policies?

a.General damages
b.Punitive damages Correct Answer
c.Compensatory damages
d.Special damages
What type of compensatory damage involves injuries that can easily be calculated
in monetary terms often including injury that result in loss of wages and medical
expenses? general damages Answer

What type of compensatory damage involves injuries that may not be easily
calculated in monetary terms often including injury such as pain and suffering,
death and other serious injury? special damage Answer

Which of the following is not one of the duties of an insured after the occurrence
of a loss that is insured?

a.Cooperate with the insurer

b.All are duties Correct Answer
c.Prompt notice of the loss to the insurer
d.Act in ways to preserve the insurer's rights under the contract
B

What insurance clause provides the insurer the right to recover claims paid to an
insured from a negligent third party and the insured is prohibited from impeding
the insurer's rights under the clause?

a.Subrogation clause Correct Answer

b.Assignment clause
c.Indemnity clause
d.Insurable interest clause
A

What insurance clause prohibits the insured from transferring the rights under
the contract to another without written consent of the insurer?
rights of assignment clause Answer

What will happen to insurance coverage when the property insured is taken
outside the territory (geographic area) specified by the insurance contract? The
coverage will be suspended until the property is return to the covered territory".
Answer
There are 2 policies covering the same loss of $30,000. Policy A coverage limit is
$100,000 and policy B coverage limit is $200,000. How would the loss be
distributed under the Pro-rata distribution method?
Policy A would pay $10,000 (1/3 of the loss $100,000 / $300,000) and Policy B
$20,000 (2/3 of the loss $200,000 / $300,000). Answer

There are 2 policies covering the same loss of $120,000. Policy A is the primary
policy with a limit of $100,000 and Policy B is the excess policy with a limit of
$100,000. How would the loss be distributed under the primary and excess
method?
Policy A would pay $100,000 and policy B would pay $20,000 Answer

Which insurance policy provision states that when the insurer broadens coverage
without any additional premiums the benefit would apply to all similar polices?

a.The insurable interest provision

b.The liberalization provision Answer
c.The subrogation provision
d.The appraisal provision
B

Which insurance policy provision provides a remedy for settling claim disputes
between an insured and insurer but only related to the amount of the settlement
and not any other disputes?

a.The severability provision

b.The subrogation provision
c.The liberalization provision
d.The appraisal provision
d

Which insurance provision states that insurance coverage would apply

individually to all insureds and the acts of one would not impede the rights of the
other insureds?

a.The appraisal provision

b.The insurable interest provision
c.The severability provision
d.The liberalization provision
c
A statement of fact that is made part of an insurance contract and a breach would
result in the contract being voidable by the insurer is?

a.A concealment
b.A representation
c.A misrepresentation
d.A warranty
D

An untrue statement made by an applicant for insurance coverage would be

considered as?
Misrepresentation Answer

Statements made on an application for insurance for insurance coverage shall be

deemed as?
Answer representations:Note that Florida requires all statements on an insurance
application should be representations and not warranties except for
transportation insurance

An insured's failure to reveal relevant facts known to the insured is considered

as?
Concealment Answer

The following would be legal grounds for an insurer avoidance of performance

(prevent recovery) under an insurance contract except?

a.All would apply

b.Intentional and fraudulent acts by an insured
c.Misrepresentations that are material to the risk being insured
d.Breach of a warranty under transportation insurance that would result in a
hazardous condition and the means of the breach is within the control of the
insured
A
The following are related to the Federal Fair Credit Reporting Act (FCRA) except?
a.The consumer is required to be provided with information related to the
consumer reporting agency when there is an adverse decision
b.All are related to the FCRA
c.The act requires consumers to be aware of the purpose for a consumer report
by providing written consent to securing a credit report
d.The primary purpose of the act is to set guidelines for consumer reporting
agencies regarding sharing of consumers non-public information
B

The following are information required to be excluded from consumer reports

provided by consumer reporting agencies under the Fair Credit Reporting Act
except?
a.Arrest records over 7 years or expiration of statutes of limitations
b.Report on bankruptcy adjudicated over 10 years and civil judgements over 7
years
c.Paid tax liens or other adverse information antedating the report more than 7
years
d.Information regarding Title Eleven of the US code

The following are related to the Gramm-Leach-Bliley Act (GLBA) also known as the
Financial Services Modernization Act (FSMA) except?

a.It prohibits Banks and other financial institutions from cross marketing or
involvement in financial products not related to the particular financial institution
b.The act specifies that the privacy notice must contain a customer right of refusal
to share their financial information with non-affiliates and contain the
information collected, the use of the information and where and how the
information is shared
c.The act mandated financial institutions to implement policies and procedures to
protect the integrity, confidentiality and privacy regarding the sharing of
consumers non-public personal information
d.The act requires that each consumer be provided with a written privacy notice
at the time the of the relationship and thereafter on an annual basis
A

The following are related to the Terrorism Risk Insurance Act (TRIA) enacted in
2002 after the terrorist attack on the World Trade Center on 09/11/2001 except?
a.Under the act the Federal government would provide assistance to insurers
which would share in losses due to acts of terrorism and provide that insurers
should omit any exclusions applicable to commercial property policies
b.The act requires property and casualty insurers to offer applicants terrorism
coverage for a period of 2 years and the definition of terrorism must be certified
by the Secretary of State and the Attorney General
c.All are related to the TRIA
d.The purpose of the act was to allow commercial property insurers to provide
terrorism coverage for insureds whom may be subject to acts of terrorism
C

The following events (triggers) would require a person to comply with Florida
financial responsibility law after an auto accident except?
a.An accident that result in damage to the auto that render it inoperable
b.All would apply
c.After conviction of a serious traffic violation such as driving under the influence
d.An accident that result in bodily injury
B

What is the minimum liability limits under Florida financial responsibility law?
10/20/10 split limits or $30,000 single limit of liability Answer

What is the required liability limit under Florida financial responsibility law for a
person being found guilty of driving under the influence for a period of 3 years?
100/300/50 or $350,000 single limit Answer
A Florida resident with 10/20/10 liability limits got in an accident in a state that
requires 25/50/10 liability limits under that state financial responsibility law.
What limit would apply to the accident in the other state?
25/50/10, the other state required limit would apply Answer

The following are penalties for non-compliance under Florida financial

responsibility law except?
a.There would be no penalty
b.The registration of all vehicles would be suspended
c.Conviction of a 2nd degree misdemeanor for committing forgery or filing a false
affidavits with the motor vehicle department
d.The vehicle operator driver's license would be suspended
A

A person who does not own an auto, but is required to comply (file SR-22) with
Florida financial responsibility law for use of non-own vehicles, can purchase?
The named non-owner policy Answer

The following are primary elements of Florida no-fault law except?

a.Persons who comply with the law have limited immunity for injuries and
coverage under no-fault only provides for bodily injury coverage and not property
damage
b.Florida is not a no-fault state
c.Coverage is provided by the person's own insurer regardless of fault for an
accident and benefits are provided under the state personal injury protection
(PIP) coverage
d.No-fault provides first party benefits for economic loss over other medical
expense and disability policies except in excess for benefits payable under
workers compensation
B Answer

The following vehicles are exempt from carrying no-fault coverage except?
a.Government vehicles used in transit to transport more than 5 passengers
b.Mobile homes and public school buses
c.Taxicabs, limousines and vehicles with 2 wheels
d.Vehicles with 4 or more wheels required to be registered for use on Florida
public highways
D Answer

What is the minimum required coverage limit under the state no-fault PIP
coverage?
$10,000 per person each occurrence (per accident),
Which of the following is not a benefit under the state personal injury protection
(PIP) coverage?

a.60% of loss of gross income (work loss)

b.80% of medical expenses
c.100% for replacement of household services and $5,000 death benefit
d.Survivors benefit
D

The following are other requirements under the PIP coverage except?

a.Coverage may be provided subject to deductibles of $250, $500 and $1,000

b.Deductibles are subtracted from the medical expenses before applying to
benefit
c.Work loss benefits may be excluded for persons without earned income such as
a retiree
d.The insurer of the negligent party for an accident must provide PIP coverage to
any person who is not at fault for the accident
D

An insured has $10,000 PIP coverage with $1,000 deductible and got in an
accident that resulted medical expenses of $11,000. What is the PIP coverage for
the medical expenses?
$8,000 ($11,000 - $1,000 deductible @ 80%);Note:if after the calculation the
amount had exceeded the coverage limit of $10,000 then the amount would have
been the coverage limit as the loss cannot exceed the coverage limit

The following are defined as insureds and would be entitle to PIP benefits except?

a.The named insured and family members of the named insured household while
occupying any vehicle in Florida and as pedestrians
b.An insured injury while as a pedestrian or occupying a non-own vehicle out of
Florida
c.Injury to pedestrians by an insured covered auto for accidents occurring in
Florida except non-residents
d.Injuries to passengers of an insured auto who is not required to have PIP for
accidents that occur in Florida
B

John a Florida resident with $10,000 PIP got in an accident in New York in his
friend's vehicle and incurred $10,000 medical expenses. What is the PIP coverage
amount for John's medical expenses?
$0 (PIP does not apply for injuries of an insured occupying a non-own auto out-of-
state),

John has $10,000 PIP and got in accident in Florida due to the fault of the other
driver and incurred $20,000 in medical expense. What is the amount John can
recover under Tort law for his medical expenses not covered by his PIP?
$10,000 ($10,000 - $20,00);Note:80% of $20,000 = $16,000 which exceeds the PIP
limit of $10,000 so the coverage amount would be $10,000 and John can sue for
the amount not recovered from PIP which is $10,000

The following are exclusions under PIP except?

a.All are exclusions

b.Injuries resulting from self-inflicted injuries or during the commission of a felony
c.Persons operating the insured auto without permission
d.Insureds occupying a vehicle owned not covered for PIP
A

The following are exemptions (thresholds) for suits under tort law for injuries
(pain and suffering) of an insured resulting from an at fault driver except?
a.Permanent injury other than scaring and disfigurement
b.Significant and permanent loss of bodily function
c.All are thresholds
d.Significant and permanent scaring and disfigurement
C

What is the required written notice an insurer is required to provide an insured

for cancellation or non-renewal of coverage for automobile coverage?

a.10 days for non-payment of premiums both for cancellation and non-renewal
b.All are required
c.Florida requires 45 days' notice for cancellations (first 90 days of coverage)
d.Florida requires 45 days' notice for non-renewal (after 90 days coverage) and
renewal of coverage
B

The following are related to uninsured motorist (UM) coverage in Florida except?

a.The agent is required to offer UM coverage at the time of an application and

have subject sign a written waiver by the applicant for refusal of coverage
b.The insurer is required to offer UM coverage for insureds without UM coverage
each year at the renewal date of the policy
c.All apply to Uninsured Motorists coverage in Florida
d.The UM coverage must be at least equal to the policy bodily injury liability
coverage limit and have subject sign a waiver for lesser coverage
C

A Florida resident with physical damage coverage subject to a deductible of $500

got in an accident that damage the auto glass and it would cost $1,500 to repair.
What coverage would apply to the glass damage?
$1,500 (no deductible apply to glass damage in Florida

Which of the following is not eligible for coverage under the personal auto policy
(PAP)?

a.An auto title in the name of a business

b.A private passenger type auto including a Jeep or Station wagon
c.A van or pickup with a gross weight of less than 10,000 pounds and not used to
transport goods or materials
d.An auto lease for a period of 6 months or more
A

Which of the following would not be part of the personal auto policy (PAP)
declaration page?

a.The telephone number of the insured

b.The coverages, limits and any applicable deductibles
c.The name of the loss payee (a creditor's interest in the auto)
d.The policy period and insurer's name and home office address
A

Which of the following would not be considered as a covered auto under the
PAP?

a.An auto permanently assigned to an insured

b.A temporary substitute auto due to the breakdown, repair or maintenance of
the insured covered auto and a non-own auto not permanently assigned to an
insured
c.The auto listed in the policy declaration page including an own or non-own
trailer
d.A newly acquired auto including an additional or replacement auto
A
The following applies for coverage of a newly acquired auto under the PAP
except?
a.The broadest coverage on the policy will apply to newly acquired autos not
including the physical damage coverage
b.An additional auto is covered for 14 days if the policy has physical damage
coverage on at least 1 auto and 4 days on a policy without physical damage
coverage
c.All would apply to a newly acquired auto
d.A replacement auto is covered for 14 days if the policy has physical damage
coverage and for 4 days if the policy has no physical damage coverage
C

Which business auto policy (BAP) coverage symbol provides coverage for both
own and non-own autos and is only to apply liability coverage?
Symbol 1 - Provides coverage for any auto no other coverage symbol provides this
wide coverage

Which business auto policy (BAP) coverage symbol would be used in Florida to
provide no-fault coverage?
Symbol 5 - which provides vehicles coverage for states with compulsory no-fault
laws such as Florida

Which BAP symbol would be used to cover a business owner from liability for
employees use of their own autos in the business?
Symbol 9 - Provides coverage for non-own autos only except vehicles rented or
borrowed which is covered under symbol 8.

What is the maximum load capacity for trailers under the business auto policy
(BAP)?
A maximum weight capacity of 2,000 pounds Answer

Which policy is designed to provide coverage for an insured in the garage

business that is excluded under the personal and commercial auto policy?
The garage policy

Which garage coverage symbol covers damage to autos left for service, repair and
storage in the custody of an insured?
Symbol 30 which provides liability coverage for damage to vehicles of others left
in an insured care, custody and control.

Which of the following would not be covered under the garage policy liability
coverage?

a.A person got in an accident due to a defective tire sold to him by an insured
b.A person got in an accident due to a faulty breaking system installed by an
insured
c.A person got in an accident due to wheels not properly installed by the insured
d.A person got in an accident while test driving an auto due to his fault
D

All of the following are coverages under the garage liability coverage except?

a.Liability resulting from the premises of a garage business

b.All are covered
c.Liability arising from the operations of a garage business
d.Liability arising from defective products and faulty workmanship
B

The following are excluded under the garage policy liability coverage except

a.Property damage to an insured own products

b.All are exclusions
c.Injury to employees covered under workers compensation
d.Liability resulting from recall of products
B

Which garage policy coverage covers an insured's liability for physical damage to
non-own vehicles left in the care, custody and control of the insured?
The garage keepers liability coverage

Coverage for vehicles of auto dealers is usually written under what coverage
form?
On a blanket basis which means one limit would apply to any one loss.
Which of the following is not an exclusion under the garage policy dealer's
coverage?

a.Loss at a newly acquired location not reported to the insurer with 45 days of the
location acquisition
b.Collision damage to vehicles driven or transported from the point of purchase
to a destination over a 50 miles radius
c.Collision damage to vehicles driven within a 50 miles radius from the dealership
d.Expected profits
C

What is the garage policy endorsement that would provide coverage for dealers
for physical damage to vehicles delivered to a destination over a 50 miles radius
from the point of purchase?
The dealers drive away collision endorsement.

What garage policy endorsement will provide physical damage coverage to

dealers that ensure against loss from voluntary parting of a covered auto by trick
or scheme or acquiring an auto from a person who does not have a legal title?
The false pretense endorsement

The following are related to commercial property insurance coverages except?

a.Covers coverage for both direct and indirect losses

b.Provides first party coverage for losses resulting from damage to property
c.Provides liability coverage
d.Coverage is provided for properties other than 1 to 4 families dwellings
C

What is the written notification period an insurer must provide an insured for the
cancellation (within the first 90 days) and non-renewal (after the first 90 days) of
a commercial property policy?
20 days for cancellation and 45 days for non-renewal and 10 days for non-
payment of premiums.
Commercial property insurance coverage may be void for the following reasons
except?

a.Intentional concealment of material facts

b.Intentional misrepresentation of material facts
c.All would apply
d.Fraud committed by an insured
C

What is the commercial property clause that states that coverage would apply to
an insured when coverage is broaden without an increase in premium?

a.The indemnity clause

b.The liberalization clause
c.The subrogation clause
d.The other insurance clause
B

How losses under property insurance are distributed when more than one policy
covers the same loss but has different provisions?
The commercial property policy would be excess over the other policy.

What is the commercial property clause that states that the insurer will be
entitled to recover losses paid to an insured from a negligent third party?
The subrogation clause

The primary coverages under the commercial property policy include the
following except?

a.Liability coverage
b.Coverage on business personal property
c.Coverage on personal property of others
d.Coverage on the building
A

What is the debris additional coverage limit under the commercial property
policy?
25% of the building coverage plus an additional $10,000

What is the pollution cleanup and removal maximum additional coverage limit
under the commercial property policy?
$10,000 during any 12 months period.

What is the automatic coverage limit under the commercial property policy for
newly acquired buildings or buildings under construction at the insured premises
or other premises?
$250,000 for a period of 30 days

What is the automatic coverage limit for newly acquired business personal
property under the commercial property policy at the insured location or another
location?
$100,000 for a maximum period of 30 days during which it must be reported to
the insurer.

What is the extension coverage limit for restoration of valuable papers and
records under the commercial property policy?
$2,500 limit at each insured premises.

Which of the following is not one of the duties of an insured after a loss under the
commercial property policy?

a.Provide the insurer with notice of the loss

b.Protect the property from further damage
c.Permit the insurer to inspect the loss and submit a sworn proof of loss
d.Provide the insurer of the loss covered under the policy
D
Which of the following perils would not be suspended when a commercial
building is vacant beyond 60 consecutive days?

a.Vandalism and sprinkler leakage

b.Fire
c.Glass breakage and theft and attempt theft
d.Water damage
B

What endorsement is valuable to a business with widely fluctuating inventory

patterns under the commercial property policy?
The value reporting endorsement.

What endorsement is an alternate to the value reporting form under the

commercial property policy that provides additional insurance coverage during
specific periods of the policy
The peak season endorsement

What endorsement is available under the commercial property policy that covers
the insured for enforcement of laws regarding demolition of property or increase
cost of construction or repair related to zoning or building codes?
Building ordinance coverage

Which commercial property insurance form provides coverage for buildings under
construction?
Builders risk coverage form.

What is the coverage limit under the builders risk coverage form for building
materials and supplies own by others in the insured care, custody and control?
5,000
The builders risk coverage will terminate on the date of any of the following
events except?

a.All would apply

b.When the property is accepted by the purchaser or is abandoned
c.When the policy is cancelled or expires
d.90 days after the building is completed or 60 days after the building is occupied
A

Which of the following is not one of the coverage forms under the commercial
property policy (CPP)?

a.The broad form

b.Comprehensive form
c.The basis form
d.Special form
B

Which of the following is not covered under the dwelling program?

a.A six family residence

b.An owner occupied dwelling or rented to others by the insured
c.A 1-4 family residence (maximum limit)
d.Dwellings own by a corporation or other business entities
A

The following are primary coverages under the dwelling program except?

a.Personal property (coverage C)

b.Fair rental value (coverage D) and additional living expenses (coverage E)
c.Dwelling (coverage A) and other structures (coverage B)
d.Liability coverage
D

The following policies are available under the dwelling program except?

a.The DP-1 Basic from

b.DP-2 Broad form
c.All are policy forms under the dwelling program
d.DP-3 Special form
C

The following are related to the hurricane deductible under the dwelling property
policy except?

a.The insurer must offer optional deductibles of 2%, 5% and 10% of the building
coverage
b.The minimum deductible is $500 and is separate from the $500 all perils
deductible
c.The policy must express the deductible as a dollar amount and apply the
deductible on annual basis instead on an occurrence basis
d.The minimum deductible is $1,000 each occurrence
d (The minimum is 500)

The dwelling property (DP) policy coverages on the dwelling (coverage A) include
the following except?

a.The dwelling including additions

b.Unattached structures
c.Outdoor equipment used in the maintenance and service and located on the
premises
d.Building materials on or adjacent to the premises used in the alteration or
repair of the dwelling
B

The dwelling property (DP) policy other structures (coverage B) exclusions include
the following except?
a.Structures used for commercial purposes including manufacturing
b.Unattached garage rented to others
c.Structures rented to others except to a tenant of the dwelling
d.Structures that store gaseous or liquid fuel
B

The dwelling property (DP) policy personal property (coverage C) coverages

include the following except?

a.Personal property of family members of the insured household

b.Personal property of guests and servants
c.Coverage for money, stamps and other valuable papers
d.Personal property belonging to the insured
C

The following are related to the dwelling property (DP) policy fair rental value
(coverage D) except?

a.Coverage is extended for the period necessary to restore the dwelling to a

tenantable condition
b.Coverage only applies when the dwelling becomes uninhabitable from a
covered peril.
c.All would apply
d.The insured is reimbursed for the fair rental value of a unit rented to others
C

The dwelling property (DP) policy additional living expenses (coverage E) applies
to the following policies except?

a.The DP-2 Broad form

b.The DP-3 Special form
c.The DP-1 Basic coverage form
d.Both the DP-2 and DP-3 policies
C

The following are general exclusions under the dwelling property (DP) policy
except?
a.Loss resulting from enforcement of a law, nuclear hazards and war
b.Earthquake and water damage by flood and backup of a sewer or drain or
malfunction of a sump pump
c.All are exclusions
d.Loss due to power interruption resulting from off premises, intentional loss and
excludes damage to outdoor lawns, trees, shrubs or plants under the DP-1 policy
C

The DP-1 policy primary coverages include the following except?

a.Coverage E - Additional living expenses

b.Coverage D - Fair rental value
c.Coverage C- Personal property
d.Coverage A - Dwelling and Coverage B - Other structures
A

An insured has a DP-1 policy with a limit of $100,000 on the dwelling and the
unattached garage was totally destroyed by fire and it will cost $15,000 to be
repaired. What is the coverage limit that would apply to the damage garage?
$10,000 (10% of $100,000)

What is the DP-1 policy personal property (coverage C) limit that apply to
personal property situated off the premises worldwide?
10% of the personal property (coverage C) amount

The following are additional coverages under the DP-1 policy except?

a.Damage to outdoor trees, shrubs and plants

b.Limit of 10% applies to the other structures (coverage B) and 10% of the
personal property (coverage C) applies worldwide

c.Reasonable cost for necessary repairs to protect the property from further loss
and a limit of 5 days (30 days for the DP-2 and DP-3 policies) for property
removed to a temporary location to protect the property from a loss covered by
the policy
d.A limit of 20% of the dwelling (coverage A) limit applies to the fair rental value
(coverage D) coverage prorated on a monthly 1/12 basis
A

Losses under the DP-1 basic form are covered on what settlement method?
Actual cash value (ACV) settlement method.

The DP-1 policy form provides what causes of loss form on the dwelling (coverage
A), other structures (coverage B) and personal property (coverage C)?
"Basic form coverage

How are losses distributed when the DP policy and other policies cover the same
loss?
On a pro-rata basis which is each policy limit in relation to the total policies limits
covering the same loss.

What is Florida requirement for cancellation (during the first 90 days of the
policy) and non-renewal (after the first 90 days of the policy) of a DP policy by an
insurer?
20 days for cancellation, 60 days for non-renewal and 10 days for termination due
to non-payment of premiums.

The following are additional coverages under the DP-2 Broad form except?

a.A limit of 10% of the dwelling (coverage A) applies to the other structures
(coverage B)

b.A combined limit of 20% apply to the fair rental (coverage D) and the additional
expenses (coverage E) but not a monthly pro-rata basis

c.Coverage for trees, shrubs and plants and 10% for increase cost associated with
building ordinance and law
d.20% limit separately apply to the fair rental (coverage D) and the additional
living expenses (coverage E)
D

What is the causes of loss form that applies to the DP-2 policy property coverages
including the dwelling (coverage A), other structures (coverage B) and personal
property (coverage C)?
Coverage is on a broad form basis.

What is the settlement method under the DP-2 and DP-3 for the losses to the
dwelling (A), other structures (B) and perconal property (C)?
Losses on the dwelling and other structures are covered on a replacement cost
(RC) basis and coverage on personal property is on an actual cash value (ACV)
basis.

What is the causes of loss coverage form under the DP-3 special form policy?
Coverage on the dwelling and other structures are on a special form basis and
personal property are covered on a broad form basis.

Which optional coverage is available for DP policies that would provide theft
coverage which is excluded for theft that occur both on and off premises and
written for owner occupied dwellings?
Broad form theft coverage

The following are the internal limits that apply to certain personal property items
under the broad form theft coverage except?

a.$2,500 for theft of firearms and $1,500 for theft of water crafts
b.$1,500 for theft of outdoor motors including trailers on the insured premises
c.$1,500 for theft of jewelry, watches, furs and precious and semi-precious stones
and $1,500 for theft of securities and documents
d.$500 for theft of money
D

The following are excluded by the broad form theft optional coverage except?

a.Theft of property of tenants, roomers and boarders

b.Property in the custody of a Bailee (a person who has temporary custody of
other persons property)
c.Theft of silverware, gold ware and pewter ware
d.Theft of insured property at other locations own or rented by the insured
c(limited to 1,500)

Which are the following coverages under the farm coverage form that pertains to
the farmer property and not property used in farming?

a.Other structures used in farming (coverage G)

b.Loss of use coverage (coverage D) including additional living expenses and fair
rental value or loss of rents
c.Coverage on the dwelling (coverage A)
d.Other private structures unattached to the dwelling (coverage B) and household
personal items (coverage C)

Which of the farm coverages covers personal property used in farming on a

scheduled basis (coverage limits are listed in the policy declaration page)?
Coverage E - scheduled farm personal property which means individual limits
apply to each listed property.
Which of the farm coverages covers personal property on a blanket basis (one
limit apply to any one loss)?
Coverage F - Unscheduled farm personal property which means one limit (blanket
basis) applies to all the covered property.
The farm liability provides liability coverage for?
Personal and business liability resulting from the operation of a farm.

Which farm optional coverage covers a farmer's mobile equipment and

machinery used in the operation of a farm?
The mobile agriculture and equipment coverage.
The following are related to flood insurance except?

a.Flood is a commonly available coverage under property insurance

b.Flood insurance is provided by the Federal government through the National

Flood Insurance Program (NFIP)

c.Property policies commonly exclude coverage for flood

d.Flood coverage is available by insurers who are part of the "write your own"
program and is 100% guaranteed by the NFIP
A

New communities applying for flood coverage is placed under the?

The emergency program

Buildings are eligible for flood coverage in the following situations except?

a.50% or more of the value of the building must be above ground

b.The building must be 100% completed
c.2 or more of the outside walls must be completed
d.The roof must be completed and attached to the structure
B

Flood coverage for contents are eligible when?

When the building is fully enclosed

The following are related to the flood dwelling coverage form except?

10% of the dwelling coverage applies to detached garages but is part of the
dwelling coverage and not an additional coverage limit
b.Covers 1-4 family residence
c.Liability coverage is included in this coverage form
d.Separate structures such as utility buildings, storage sheds etc. require a
separate policy
C
The following are related to the flood general property form except?

a.Coverage applies to contents not available under the dwelling form

b.Coverage applies for buildings not available under the dwelling property form
c.Coverage does not apply to buildings under the Residential Condominiums
Building Association Policy (RCBAP) form
d.Coverage is available to 1-4 families buildings
D

What is the primary requirement for coverage under the Residential

Condominium Building Association Policy form?
75% or more of the total floor area is residential and the building is located in a
regular program community.

What is the maximum coverage limit that applies to 1-4 families' residence under
the regular flood program?
250,000

What is the maximum coverage limit that applies to all other properties other
than residential property under the flood regular program?
500,000

What is the maximum coverage limit under the flood emergency program for
property and contents other than residential property?
$100,000 for the buildings and $100,000 for contents

Flood losses are generally settled under what settlement method?

The Actual cash value (ACV) settlement method

The following are requirements for a building to covered on a replacement cost

basis except?

a.The building must be insured for at least 80% or the building replacement cost
b.The insured must live on the premises at least 80% of the time during the year
c.The building must be a 1 family residence
d.All are requirements
D

What is the pre-notification Florida requirements for an insurer termination of a

CGL policy?
20 days for cancellation (within the first 90 days of coverage), 45 days for non-
renewal (after the first 90 days of coverage) and 10 days for termination due to
non-payment of premiums.

The following are primary liability coverages under part A of the commercial
general liability (CGL) policy except?

a.Premises and operations liability coverages

b.All are primary coverages
c.Liability resulting from faulty workmanship (Completed operations liability)
d.Liability resulting from defective products (Products liability)
B

A customer was injured from a condition that existed on the premises of an

insured's business. What CGL coverage would protect the business owner should
the customer sue for legal damages?
The premises liability coverage.

A homeowner hired a contractor to installed carpet and his son was injured
during the installation of the carpet. What CGL coverage would protect the
contractor if the homeowner sued for the injury of his son?

a.The operations liability coverage

b.The products liability coverage
c.The premises liability coverage
d.The completed operations liability coverage
B

A person was injured due to tainted food delivered at his home by a restaurant.
What CGL coverage would cover the restaurant owner should the person sue for
legal damages?
The product liability coverage.
A person was injured from gas escaping from a gas pipe after a contractor
installed a gas heater. What CGL coverage would cover the contractor should the
person sue for legal damages?
The completed operations liability coverage

A contractor's employee fell off a roof he was repairing for the contractor and
was injured. What CGL coverage would respond to the worker's injury?
No CGL coverage would respond to employee injuries

What type of liability is related to a person being held legally liable for negligence
of others acting within authority granted to them such as employees and hired
agents?
vicarious liability

A contractor hired a subcontractor and the subcontractor negligently left a pit

open at the job site and a child fell in the hole and was injured. Would the
contractor be held liable for the negligence of the subcontractor?
The contractor would be held legally liability for the actions of any employee
under the vicarious liability law.

What CGL coverage form provides (triggers) coverage for losses that occur during
the policy period regardless of any latter time the claim for the losses is made?

a.The occurrence coverage form

b.The loss sustained coverage form
c.The claims made coverage form
d.The discovery coverage form
A

What CGL coverage form provides (triggers) coverage for losses that occur and
reported to the insurer within the policy period or reported within 60 days (basic
extended reported period) after the policy terminates?
The claims made coverage form
An insured has 2 CGL policies on an occurrence basis. Policy A coverage was from
1/1/2011 to 12/31/2011. Policy B was from 1/1/2012 to 12/31/2012. A loss
occurred on 12/01/2011 and reported to the insurer on 1/15/2012. What policy
would cover the loss?
Policy A would cover the loss as it occurred during its policy period of 1/1/2011 to
12/31/2011.

There are 2 CGL policies on a claims made basis. Policy A coverage from 1/1/2011
to 12/31/2011. Policy B from 1/1/2012 to 12/31/2012. A loss occurred on
12/01/2011 and reported on 1/15/2012. What policy would cover the loss form?
Policy A would cover the loss as it occurred during its policy period and reported
to the insurer within the 60 days basic extended reporting period which would
end on 3/1/2012.

What option is available under the claims made policy that would cover losses
that occur prior to the effected date of the policy and reported to the insured
during the policy period or within the 60 days basic extended reporting period?
The retroactive date coverage option.

What claims made policy option is available that will extend the basic extended
reporting period beyond the 60 days to 5 years provided the option is selected
during the policy 60 days basic extended reporting period?
The supplementary extended reporting period option.

What is the policy clause found in CGL policies that states that an insurer would
deny coverage for a loss that was known to exist prior to the effective date of the
CGL policy and any continuous exposure to the same risk?
The known loss rule clause.

Which of the following is not an excluded coverage under the CGL policy?

a.Liquor liability, employee injuries, pollution, damage to an insured own

products, liability resulting from recall of products and delays
b.Injury due to defective products
c.Liability resulting from intentional causes and liability assumed under contracts
d.Liability resulting from use of aircrafts, autos, watercrafts and mobile
equipment
B

What CGL coverage applies to misappropriations of others advertising ideas,

infringements of copyright materials, titles or slogans?
advertising injury liability

What CGL coverage applies to medical expenses of others regardless of the

insured legal liability resulting from conditions at or on the insured premises or
due to the insured operations and is covered within 1 year from the date of the
accident?
The medical payments coverage

Which of the following is not a supplementary payments under the CGL liability
coverage?

a.$500 for the cost of bail bonds

b.$250 for an insured loss of earnings to attend trials and hearings
c.Interest on court judgements
d.The cost of court bonds to release attachments
A

The following are considered as insureds under the CGL policy except?

a.An individual person and partners in a partnership and their employees

b.Officers, directors and stockholders of a corporation
c.Managers and members of a limited liability company and employees
d.All would be considered as insureds
D
The following are common coverage limits under the CGL policy for bodily injury
(BI) and property damage (PD) of others under the CGL coverage A except?

a.$100,000 for BI and PD for any one occurrence

b.$200,000 for BI and PD for all occurrence that occur during the policy period
refer to as general aggregate limit (does not apply to the products and completed
operations liability coverages)
c.All are common CGL coverage limits
d.A separate aggregate limit of $200,000 apply for BI and PD resulting from
products and completed operations
C

The following are the other common liability limits of the CGL that apply to
losses?

a.$5,000 per person each occurrence for medical payments coverage

b.$5,000 per person each occurrence for personal and advertising injury liability
c.$100,000 each occurrence for damage to premises rented to an insured refer to
as fire or legal liability
d.All are the other CGL liability limits
D

When more than one policy cover a loss the CGL policy would respond as follows?

a.All are correct

b.Under the claims made policy form the CGL policy would be excess over other
policies that are not claims made
c.The CGL policy would be the primary policy except as otherwise provided
d.The CGL forms are excess over property insurance that applies to completed
operations or insured premises
A

Which special commercial liability coverage form is design to cover an insured for
liability resulting from work performed by independent contractors and others or
the insured acts or omissions in supervising these persons?
The owners and contractors protective (OCP) liability coverage form.
What special commercial liability coverage form is designed for persons who are
in the business of manufacturing, selling or serving alcohol or furnishing alcohol to
minors that result in bodily injury or property damage due to intoxication?
Liquor liability coverage form

Which special commercial liability coverage form is designed to cover an insured

from a pollution incident including emission of pollutants in the air or land causing
environment damage?
Pollution liability coverage form
What commercial general liability specialized form provides coverage for damage
to property of others in an insured care custody and control such as a laundry?
Bailee liability coverage

What excess liability coverage form provides the same coverages, provisions and
exclusions as the underlying policies (other policies that provide liability
coverage)?
The follow form

What excess liability coverage form provides the same coverages as the
underlying policies but may include some different provision and exclusions?
The standalone coverage form

What excess liability policy is usually written on a standalone basis with high
liability limits, commonly require specific liability limits for underlying policies and
may provide additional liability coverage not provided by the underlying policies?
The umbrella liability policy

An insured has a $1,000,000 Umbrella policy and a personal auto policy with
100/300/100 liability limits. The insured injured a person in an auto accident
resulting in damages of $800,000. What would the Umbrella policy would pay?
$700,000 ($800,000 - $100,000 the person auto BI limit)

What liability insurance covers an insured for liability resulting from failure to
render required services and errors that result from rendering such service?
Professional liability insurance also refer to as malpractice and error and omission
insurance.
The following are standardized professional liability policies except?

a.The Hospitals professional liability policy

b.The Lawyers professional liability policy
c.The Physicians, Surgeons and Dentists (PS&D) professional liability policy
d.Bailee liability policy
D

The following apply to the Physicians, Surgeons and Dentists professional liability
policy except?

a.A medical incident is defined as furnishing medical or dental services by an

insured
b.Covers legal liability resulting from a medical incident
c.Covers injury to employees or obligations under workers compensation law
d.The policy covers services by the insured or persons under the direction, control
or supervision of the insured and the cost of legal defense in addition of the
liability limit
C

The following apply to the Hospital professional liability policy except?

a.All apply
b.A medical incident is defined as acts or omissions in the furnishing of
professional health care services and include legal expenses to represent the
insured in addition to the policy liability limits
c.Coverage also applies to the named insured professional boards or committees
d.Covers the insured liability arising from medical incidents
A

How do liability limits apply to the physicians, surgeons and dentist (PS&D) and
the hospital professional liability policies?
Coverage limits apply per claim (or medical incident) and an aggregate limit for all
claims during the policy period.

The following apply to the Lawyers professional liability coverage form except?
a.Claim expenses are part of and not in addition to the liability limit
b.Coverage is provided for acts and omissions of the insured in rendering service
as a lawyer
c.The insurer's cost to represent the insured is in addition to the liability limit
d.Coverage is also provided for activities as an administrator, executor, guardian,
conservator fiduciary or as a trustee
A

The following are common exclusions under the Lawyers professional liability
policy except?

a.Acts related to legal documents prepare by the lawyer

b.Acts involving the purchase or sale of securities
c.Acts as a fiduciary under the Federal Employees Retirement Income Security Act
(ERISA)
d.Dishonest, fraudulent, criminal or malicious acts
A

The following are related to the personal liability coverage form except?

a.Coverage can be provided for business liability

b.Coverage is available to residences that are owner occupied, non-owner
occupants, condos and coops units and mobile homes
c.Medical payments of others are also included similar to the homeowners
policies section II coverages
c.Provides coverage for liabilities arising from private residences and personal
activities
A

The following are considered as insureds under the personal liability coverage
form except?

a.Any person who is legally responsible for animals

b.The named insured and resident spouse and relatives of the named insured and
spouse
c.All would be considered as insureds
d.A child in the care of an insured to age 21
C

The following are coverage limits under the personal liability coverage form
except?

a.A limit of S1,000 applies to the medical payments of others coverage

b.A minimum liability limit of $100,000 for bodily injury and property damage of
others
c.A maximum limit of $10,000 applies to parents vicarious (imputed) liability
d.Liability losses assessed against an insured by a condo or coop association
D

The following are additional coverages available by endorsements to the personal

liability coverage form except?

a.Sailboats 26 feet or more with or without auxiliary power

b.Coverage for incidental business pursuits related to a home base business
activity
c.Water crafts not more than 26 feet and power by an outboard motor of 25 or
more horsepower
d.Coverage for personal liability resulting from premises and personal activities of
an insured
D

The following are related to the farm liability coverage form except?

a.It provides liability coverage for bodily injury and property damage both arising
out of farming operations and personal activities of the insured
b.Coverage is provided for personal and advertising injury liability
c.Coverage is provided for medical payments of others without regard to the
insured legal liability
d.It provides coverage for liability arising from pollutants and injury to farm
employees
D
The following are exclusions under the farm liability coverage form except?

a.Bodily injury and property damage arising out of activities related to farming
and personal activities
b.Damage to an insured own products
c.Liability arising from aircraft crop spraying
d.Liability for pollutants and injury to employees
A

Which liability coverage form is designed to provide coverage to corporations and

other business entities for suits brought against them by employees for
employment related offenses?
The employment-related practices liability coverage form.

The following are defined as insureds under the Employment-related Practices

Liability (EPL) coverage form except?

a.All would be considered as insureds

b.Partners in a partnership or joint venture
c.An individual sole-proprietor business owner
d.Corporate officers, directors and employees in managerial and supervisory
positions
A

The following are exclusions under the Employment-related Practices Liability

(EPL) coverage form except?

a.All are exclusions

b.Criminal, fraudulent and malicious acts of an insured
c.Liability resulting from failure to comply with The Americans with Disability Act
d.Liability arising out of strikes and lockouts and intentional injury
A
What liability coverage form is the EPL is written under?
The claims made coverage form.
The following apply to the employment-related practices liability (EPL) coverage
form except?

a.The coverage territory includes the US, Puerto Rico and worldwide provided
that the suit is brought within the US or Puerto Rico
b.A co-payment provision requires the insured to pay part of the legal damages
and defense cost subject to a maximum limit
c.All apply
d.A single liability limit apply for both legal damages and defense expenses of the
insurer and the claims made extended reporting period may be applied by an
endorsement
C

The following are included in the definition of an injury under the EPL policy
except?

a.Refusal to employ or promote, unlawful termination and discrimination

b.Commission of an unlawful act within the scope of employment
c.Violation of the Americans with Disability Act
d.Work related sexual harassment and physical or mental abuse related to any
form of discrimination
C
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