2-20 Practice Final Exam

In the Farm Policy the Mobile Agricultural Machinery and Equipment coverage from covers:

A) Mobile Equipment

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B) Coverage is on a monoline basis

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C) Both A & B

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D) Neither A or B

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The BOP provides a $ _____ coverage limit for off premises loss not including money and securities, valuable papers, and accounts receivable.

$500

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$5,000

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$50,000

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No limit for off premises loss

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In the Homeowners policy Section II provides liability coverage at:

A) The insured residence

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B) Personal activities of the insured

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C) Both A & B

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D) Neither A or B

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Your BAP insured has filed a claim for an expensive battery in her tractor trailer which has “gone bad” and required replacement. Is this a compensable claim?

yes, the battery is part of the tractor

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yes, but subject to depreciation

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no, wear and tear is not covered

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none of these apply

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True or False? Road Damage to tires is excluded in the BAP’s Physical Damage coverages.

True

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False

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Rates in Tier Three are set at ___% above comparable voluntary markets.

10%

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25%

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50%

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Tier Three rates are required to be actually sound with any shortfalls assessed to Tier Three participants

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Physicians Coverage…

A) Reimburses an insured for non-surgical care provided by a physician

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B) Services in the physician’s office, insured’s home, or hospital are typically not covered

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C) Both A & B

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D) Neither A or B

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True or False: Medicare Supplement Insurance provides coverage for the gaps, deductibles, exclusions, and coinsurance in Federal Medicare.

True

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False

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Major Medical Insurance typically excludes:

Physicians and surgeons fees

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Operating room

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Treatment in a VA or government hospital

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Medical expenses including lab work

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True or False: PPOs provide the insured with comprehensive health services with a focus on managed care, cost containment, and flexibility.

True

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False

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This Health Insurance coverage continuation provision permits non-renewal for reasons specifically stated; no other reasons can apply:

Cancellation Clause

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Optionally Renewable

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Conditionally Renewable

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Guaranteed Renewable

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Which of the following are true of Disability Income policies?

Lump sum payments are common for loss of sight/hands/feet

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Occupation of insured is significant in underwriting

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DI policy may contain provision reducing benefits if insured’s occupation increases in hazard

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All of the above

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The Small Business Boiler and Machinery Broad Form.

Spoilage Coverage can be endorsed

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Spoilage Coverage cannot be endorsed

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Spoilage Coverage is included in the base policy

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Is not address in the policy or by endorsement

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The Boiler and Machinery Policy has a $______ limit for damage by water from refrigerating or air conditioning vessels and piping.

$10,000

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$25,000

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$50,000

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no limit is listed in the policy

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In the Boiler and Machinery Objects Definition Form an “Insurable Objects” includes all BUT which of the following?

boilers

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turbines

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air conditioning equipment

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aircraft

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The Boiler and Machinery Policy has a $______ limit for damage caused by ammonia contamination.

$10,000

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$25,000

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$50,000

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No limit is listed in the policy

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Exceptions to the definition of an “accident” in the Boiler and Machinery include all BUT which of the following?

Depletion and Deterioration

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Corrosion and Erosion

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Rupture and Collapse

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Wear and Tear

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This coverage covers the insured’s liability for damage to aircraft in the care, custody, and control “stored for safekeeping or repair”.

Medical Payments

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Admitted Aircraft Liability Coverage

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Aircraft Liability

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Hangarkeeper’s Liability

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True or False? In-Motion covers the aircraft while it is under its own power.

True

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False

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True or False: The Running Down Clause is the insuring agreement for liability to other ship-owners.

True

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False

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Ocean Marine Freight Coverage…

A. Is not normally part of the Hull coverage

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B. Covers financial loss by vessel owner if freight charges are not paid

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C. Both A & B

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D. Neither A or B

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The Floating or Open Form of Ocean Marine Insurance…

Does not have an expiration date

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Insurer or insured may cancel with a 30 day notice

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Insured uses a reporting form to declare exposure to insurer

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All of the above

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The Commercial Inland Marine Annual Transit coverage:

Covers the shipper or receiver of goods against loss to goods in transit

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Covers the shipper of singular shipments of goods against loss to goods in transit

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Covers the carrier for loss to domestic shipments in transit

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Covers the shipper for all risks against loss to property sent by registered mail, first class mail, certified mail or express mail

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True or False? Suretyship and Insurance are identical in every way in securitization.

True

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False

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Which bond is used to guarantee the Principal’s activities associated with importing and exporting?

Public Official Bond

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Self-Insurance Bond

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Blue Sky Bond

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Customs Bond

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Which bond is used to indemnify a governmental body for liability imputed to it by the negligence of the Principal?

License Bond

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Indemnity Bond

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Permit Bond

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Franchise Bond

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Which bond is furnished by plaintiffs and defendants in litigation to protect the opposing party from loss in the event the principal fails to show a legal entitlement to the remedy sought?

Probate Bond

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Conservation Bond

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Insolvency Bond

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Court Bonds

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The Crime policy covers:

A. Property of the named insured

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B. Property in the custody of the named insured

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C. Both A and B

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D. Neither A or B

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This Crime coverage endorsement covers the named insured’s legal liability as custodian of guest property:

Extortion

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Funds Transfer Fraud

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Safe Depository

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Guest Property

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The Crime policy Loss Sustained Form covers:

A. Losses that both occurred and were discovered during the policy period, or within one year of its expiration

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B. Losses discovered during the policy period or within four years after its expiration are covered regardless of when the loss occurred

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C. Both A & B

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D. Neither A or B

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The insured has a Crime policy form and has suffered a loss by governmental action. Is this loss covered?

Covered

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Not Covered

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Under Florida’s Workers’ Compensation laws penalties for non-compliance include:

business is guilty of first-degree misdemeanor

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business is guilty of second-degree misdemeanor

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business is guilty of third-degree misdemeanor

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business is guilty of a third-degree felony

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Part One Workers’ Compensation:

A. Covers the cost of defending the employer against a claim for these benefits

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B. Requires the employer to be responsible for any payments in excess of those regularly provided by the applicable workers' compensation laws

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C. Both A & B

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D. Neither A or B

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True or False? The workers’ compensation system in Florida is based on a mutual renunciation of common-law rights and defenses.

True

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False

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Under Florida’s Workers’ Compensation laws a sole proprietor or partner:

Is considered to be the employer and not an employee

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Is considered to be the employer and an employee

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There is no ruling concerning sole proprietors or partners

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None of the above

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An accident has occurred at an insured business. The accident was significant and was the proximate cause of death of the injured employee. The death took place three years after the accident. Is there a death benefit due the decedent’s family?

Yes, because the death occurred within 3 years of accident

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Yes, because the death occurred within 5 years of accident

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No, because the death occurred after 1 year of the accident date

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There is no time element associated with the compensable death benefit in the Workers Compensation policy as long as the accident occurred within the course and scope of the employment

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Under Florida’s Workers’ Compensation laws the WC death benefit pays up to $____ for actual funeral expenses.

$1,000

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$7,500

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$15,000

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$100,000

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True or False? Under Florida’s Workers’ Compensation laws permanent impairment is paid based upon a medical impairment rating schedule.

True

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False

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Shelby Tassitino, your CGL insured, is a sole proprietor and wants to know how the CGL policy’s language addresses coverage for her estate if she were to fortuitously expire. You advise Shelby…

The CGL does not address this issue and you advise her to form a corporation

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The CGL expires when a sole proprietor expires

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The CGL’s language provides that the legal custodian of the business becomes the insured for the purposes of winding down the business

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None of the above

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True or False: Supplemental Payments are payable in addition to the CGL’s policy limits.

True

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False

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An insured has the following limits with the “basic” limits for Fire Damage/Fire Legal coverage.
What is the basic limit for Fire Damage/Fire Legal coverage?

General Aggregate Limit $2,000,000
Products-Completed Operations Limit $2,000,000
Personal and Advertising Injury Limit $1,000,000
Per Occurrence Limit $1,000,000
Fire Damage/Fire Legal $ ______
Medical Payments Limit $ 5,000

The basic limit for Fire Damage is $1,000

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The basic limit for Fire Legal is $5,000

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The basic limit for Fire Legal is $100,000

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The basic limit for Fire Legal is $1,000,000

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The CGL’s Coverage C Medical Payments covers members of the public who are injured:

A. On or next to the insured’s owned or rented premises

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B. Because of the insured’s operations

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C. Both A & B

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D. Neither A or B

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True or False? The Basic Extended Reporting Period (BERP) provides an extension beyond the policy term for the reporting of a claim.

True

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False

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True or False: The CGL Occurrence Form does not require that a claim be made during the policy term in which the bodily injury or property damage took place.

True

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False

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You are explaining CGL coverages with your insured, Becky Johnson. You tell Becky that Coverage C covers:

Coverage C covers Bodily Injury and Property Damage

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Coverage C covers Personal and Advertising Injury

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Coverage C covers Medical Payments

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None of the above

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All of the following are EXCLUDED for BI and PD claims in the CGL EXCEPT:

Recall

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Delay

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Pollution

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Ordinary Negligence

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The Farm Employers’ Liability/Medical Payments Endorsement covers Liability and Medical Payments coverages to injuries to farm employees.

True

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False

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The CGL is excess to policies which cover…

Aircraft

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Watercraft

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Automobile

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All of the above

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True or False: Employment Related Practices Liability includes a single limit of insurance which includes damages and excludes defense expenses.

True

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False

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The Special Form Cause of Loss form EXCLUDES:

Dishonesty of insured or employees

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Rust, decay, and deterioration

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Loss to property in the open from rain, snow, ice, or sleet

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All of the above

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The Leasehold Interest Coverage Form covers the “remaining” financial loss(es) associated with the destruction of the insured location which results in all BUT which of the following:

Loss of the remaining value of improvements and betterments made by a tenant

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Total and entire cost of improvements and betterments made by a tenant

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Loss of the remaining value of a bonus paid to acquire a lease

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Loss of the remaining value of prepaid rents

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The Business Income coverage option “Maximum Period of Indemnity”:

Eliminates coinsurance but limits the recoverable amount during any 30 day period to a selected fraction (1/16, 1/14, 1/13)

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Enforces coinsurance by agreeing to stated value of net income/loss and operating expense

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Up to 690 days of Additional Coverage beyond the 30-day extended period

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Eliminates coinsurance but limits the coverage to 120 days (applies to extra expense and business income)

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The Commercial Property policy’s Optional Coverage, “Replacement Cost”:

Provides an annual percentage increase in coverage

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Waives the Coinsurance condition

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States the policy will pay for replacement of new building and personal property; Insured has 180 days to replace and notify insurer of replacement

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None of the above

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True or False: In the Commercial Property Insurance coverage form Building coverage includes materials, equipment, and supplies within 100 feet of the premises.

True

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False

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The Commercial Property Insurance policy requires a ___ day notice for non-payment of premium.

10

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30

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60

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90

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In the Commercial Property policy’s Additional Coverage Extensions there is $____ coverage for property in transit.

$1,000

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$2,500

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$5,000

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$10,000

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The Basic Form Cause of Loss perils include:

A. Riot or Civil Commotion

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B. Earth Movement

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C. Both A & B

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D. Neither A or B

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True or False? Your Garage policyholder has Comprehensive coverage in Part IV of his Garage policy. This Comprehensive coverage provides the insured broader coverage than Specified Causes of Loss coverage.

True

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False

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Section II of the Garage Policy excludes:

Liability assumed under contract

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Employee Injuries

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Liability for pollution or contamination

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Section II Liability of the Garage Policy does not apply to:

A. Negligence

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B. Employee injuries

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C. Both A & B

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D. Neither A or B

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Josephine’s Garage has replaced all four tires on a customer’s truck. The truck’s rear right wheel flew off when the customer left the garage striking a pedestrian. How will the Garage Policy respond?

The Garage Policy will respond to liability associated with the work performed by the insured less a $100 deductible

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The Garage Policy will respond to liability associated with the work performed by the insured less a $250 deductible

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The Garage Policy will respond to liability associated with the work performed by the insured less a $500 deductible

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The Garage Policy will respond to liability associated with the work performed by the insured less a $1,000 deductible

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True or False? Specified Causes of Loss provides the insured broader coverage than Comprehensive coverage in the BAP.

True

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False

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The BAP’s Section II Liability coverage does not apply to:

Insured property

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Employee injuries

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Mobile equipment

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Each of these are correct

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True or False? The garaging territory is not a rating factor in the BAP.

True

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False

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Underwriting radius of operation includes all BUT which of the following?

Local = within 50 miles

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Local = within 25 miles

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Intermediate = 50 to 200 miles

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Long distance = over 200 miles

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In the Business Auto Policy (BAP) Symbol 7 covers:

Owned Autos Only

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Specifically Described Autos

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Owned Private Passenger Vehicles Only

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Any Auto

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In the BAP Comprehensive covered perils include:

Intentional Acts

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Nuclear

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War

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Fire

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Your commercial insured has struck a light pole in a one vehicle accident which resulted in a broken windshield. What type of physical damage claim will he be filing?

Special

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Comprehensive

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Collision

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Mailbox

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True or False? The BAP includes $30 per day/$900 maximum Transportation Expense.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

True or False? Florida statute encourage rebating and no conditions apply.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

True or False? Florida law does not address Unfair Trade Practices or Acts.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

An agent has knowingly made some misleading representations to sell an insurance policy. This is known as…

Salesmanship

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Twisting

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Premiuming

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Rebating

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Unfair methods of competition and/or deceptive acts include which of the following?

Using an advertisement, announcement, or statement containing any assertion, representation, or statement with respect to the business of insurance, which is untrue, or misleading

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Comparisons between policy features

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Comparisons between policy benefits

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Comparisons between product pricing

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True or False? Fraud only applies to the filing of insurance claims.

True

Correct Incorrect Correct answer

False

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Defamation includes…

A) Disseminating information

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B) Dissemination information which is false

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C) Dissemination of information which is calculated to injure a third party

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D) Both B & C

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Shirley Sterling has obtained her insurance license for the sole purposes of selling insurance exclusively for her family. Is this permissible under Florida law?

Yes, she can sell insurance to whomever she wants

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Yes, as long as the insurance companies do not object

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No, Shirley cannot obtain a license to solely sell insurance to “controlled business”

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No, she should not sell insurance to friends or family

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True or False? A loan officer may not solicit or sell insurance in connection with a loan but she may refer the loan customer to another insurance agent who is not involved in the application, solicitation, or closing of the same loan transaction.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Mary Mowinski has requested her FAJUA policy have Medical Payments coverage with a $5,000 limit. You advise her…

Medical Payments max is $500 in the FAJUA policy

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Medical Payments max is $1,000 in the FAJUA policy

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Medical Payments is not available in the FAJUA policy

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Medical Payments' max limit is only $2,000 in the FAJUA policy

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To be eligible for a FAJUA policy you must:

A) Be a Florida resident

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B) Have a vehicle registered in Florida if a non-resident

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C) Either A or B are eligible

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D) Neither A or B is eligible

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The standard deductibles for a Citizens Homeowners policy are?

$1,000 All Perils and 2% Hurricane

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$1,000 All Perils and 5% Hurricane

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$2,500 All Perils and 2% Hurricane

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$5,000 All Perils and 5% Hurricane

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In the Dwelling Program “Open Perils” covers all direct physical loss but for which things are _________.

Included

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Excluded

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None of the above

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Broad Form DP-2 includes the DP-1 coverages (Fire, EC and VMM) and adds which of the following perils:

A) Falling objects and Weight of ice, snow or sleet

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B) Volcanic eruption and Damage by burglars

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C) Both A & B

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D) Neither A or B

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Other Coverages in the DP1 policy provides Other Structures coverage up to ____ of Coverage A.

10%

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20%

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30%

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40%

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Other Coverages in the DP1 policy provides coverage for “property away from the premises” in the amount of:

Up to 10% of Coverage C

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Up to 20% of Coverage C

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Up to 25% of Coverage C

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Up to 50% of Coverage C

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Hurricane deductibles apply:

Per occurrence

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Per year

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Deductibles do not apply to the Dwelling Program

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None of the above

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Your insured has a Dwelling Policy with the Broad Form Theft endorsement and want to know how much coverage she will have for jewelry. You tell her she will have $____ coverage.

$500

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$1,500

Correct Incorrect Correct answer

$5,000

Correct Incorrect Correct answer

$10,000

Correct Incorrect Correct answer

A moral hazard is an unconscious mental attitude which increase the probability and severity of loss.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

True or False: Insurance is a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies.

True

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False

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Bill Williams, your insured, has failed to reveal some relevant facts when he is applying for insurance. This is considered:

A) Concealment

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B) Misrepresentation

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C) Fraud

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D) Both B & C

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What amount will the insurer pay if an insured has a $25,000 policy with an 80% coinsurance provision, a $50,000 building value and a $20,000 loss?

$10,000

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$12,500

Correct Incorrect Correct answer

$15,000

Correct Incorrect Correct answer

None of the above

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What amount will the insurer pay if an insured has a $40,000 policy with an 80% coinsurance provision, a $45,000 building value and a $10,000 loss?

$10,000

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$8,000

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$5,000

Correct Incorrect Correct answer

None of the above

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Negligence is failure to…

A) Exercise care to protect others from harm

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B) Act as a prudent person would

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C) Both A & B

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D) Neither A or B

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Petey’s automobile incurs $1,000 of physical damage in an accident caused by Spanky. Petey receives a claims payment of $800 from her own insurer, because of a $200 deductible clause. What subrogation right does the insurance company have?

A) The insurance company is now subrogated to Petey’s right to collect from Spanky

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B) Spanky’s insurance company will owe $800 to Petey’s insurance company

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C) Both A & B

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D) Neither A nor B

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“Severability of Interest” means…

Several options of interest

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Policy cannot be cancelled

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Insurance applies to all or none

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Insurance applies separately to each insured

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Property and liability insurance policies are said to be ___________ contracts because the obligation of the insurer to perform may be conditioned upon the insured satisfying certain conditions.

Personal

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Adhesions

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Written

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Conditional

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This Homeowners policy form covers Section I Property on an “open perils” basis:

HO-2

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HO-3

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HO-5

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HO-64

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A Homeowners policyholder has come to the office to file a theft claim for the loss of an expensive watch. She tells you that the value of the watch is $1,200. How would you advise her regarding the coverage in the HO policy?

No coverage for jewelry

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No theft coverage for jewelry

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The claim will be paid (less her deductible) as there is $1,500 per occurrence for theft of watches in the basic policy form

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The claim will be paid less her deductible as there is $15,000 per occurrence for theft of watches

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Coverage C in the Homeowners policy covers:

Dwelling

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Other Structures

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Personal Property

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Loss of Use

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Coverage D in the Homeowners policy covers:

Dwelling

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Other Structures

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Personal Property

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Loss of Use

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Your HO-3 insured has contacted you to add the hovercraft he has just purchased to his Homeowners policy. How will you advise him?

Ask for a copy of the bill of sale and increase Coverage C by that amount

Correct Incorrect Correct answer

Advise the insured that the Homeowners policy specifically excludes coverage for hovercrafts

Correct Incorrect Correct answer

Advise the client that the Homeowners policy only insures up to $1,000 for hovercrafts

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

What amount of Ordinance and Law coverages is required in the Florida Homeowners policy?

10%

Correct Incorrect Correct answer

20%

Correct Incorrect Correct answer

30%

Correct Incorrect Correct answer

40%

Correct Incorrect Correct answer

Florida law requires ___ days of notice of renewal for a Homeowners policy.

10

Correct Incorrect Correct answer

30

Correct Incorrect Correct answer

45

Correct Incorrect Correct answer

100

Correct Incorrect Correct answer

You have been contacted by Jane Smith who is inquiring into a Homeowners policy for the duplex she just purchased. Jane has taken on three boarders to help make her mortgage payment. Is she eligible for a Homeowners policy?

Yes, roomers and boarders are permissible under the Homeowners policy

Correct Incorrect Correct answer

Yes, but not if she has more than four roomers or boarders

Correct Incorrect Correct answer

No, the Homeowners policy permits up to two roomers and boarders

Correct Incorrect Correct answer

No, the Homeowners policy does not permit any roomers or boarders

Correct Incorrect Correct answer

Your insured has an Inland Marine policy covering Furs. She inherited several pieces six months ago and never added them to her policy. She has just suffered a theft of those same furs. How will the policy respond?

A) No coverage as her ownership exceeds the 30 days of automatic coverage

Correct Incorrect Correct answer

B) Covered if under the loss is the lesser of 25% of the coverage limit or $10,000

Correct Incorrect Correct answer

C) Both A & B

Correct Incorrect Correct answer

D) Neither A or B

Correct Incorrect Correct answer

Which of the following are rating factor for the PAP:

Age, sex, and marital status

Correct Incorrect Correct answer

Driving records of operators

Correct Incorrect Correct answer

Usage

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

The PAP policy territory includes all but which of the following?

United States

Correct Incorrect Correct answer

Mexico

Correct Incorrect Correct answer

Puerto Rico

Correct Incorrect Correct answer

Canada

Correct Incorrect Correct answer

How many days does the insured have to put the insurer on notice when a substitute vehicle has been purchased which requires Comprehensive coverage if the policy has Comprehensive coverage on at least one vehicle prior to the substitution?

4

Correct Incorrect Correct answer

14

Correct Incorrect Correct answer

30

Correct Incorrect Correct answer

No time limit

Correct Incorrect Correct answer

True or False? The naming of a Loss Payee on the PAP Declarations ensures: claims payments under Coverage D will be paid jointly to both named insured and Loss Payee.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Extended Personal Injury Protection…

A) Extends PIP medical benefits to 100% and work loss benefits to 80% – applicable to the named insured and family members only

Correct Incorrect Correct answer

B) Increases the basic PIP benefit of $10,000 per person for additional amounts

Correct Incorrect Correct answer

C) Both A and B

Correct Incorrect Correct answer

D) Neither A or B

Correct Incorrect Correct answer

Your insured has asked which coverage they can obtain to cover the cost of towing or labor if their vehicle becomes incapacitated. Your recommendation is…

Transportation Expense

Correct Incorrect Correct answer

Miscellaneous Type Vehicle Endorsement

Correct Incorrect Correct answer

Extended Non-owned Coverage

Correct Incorrect Correct answer

Towing and Labor

Correct Incorrect Correct answer

True or False? The PAP excludes Part D coverage if the covered auto is destroyed or confiscated by governmental or civil authorities.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Stacked UMBI coverage means:

A) Coverage limits for two or more vehicles are added together

Correct Incorrect Correct answer

B) UM deductibles are waived

Correct Incorrect Correct answer

C) Both A & B

Correct Incorrect Correct answer

D) None of the above

Correct Incorrect Correct answer

PAP Medical Payments are payments for necessary medical and funeral expenses rendered within ____ years from the date of accident?

1 year

Correct Incorrect Correct answer

2 year

Correct Incorrect Correct answer

3 year

Correct Incorrect Correct answer

40 years and a day

Correct Incorrect Correct answer

Which style of limits are available on the PAP?

A) Single limits

Correct Incorrect Correct answer

B) Split limits

Correct Incorrect Correct answer

C) Fractional limits

Correct Incorrect Correct answer

D) Both A & B

Correct Incorrect Correct answer

True or False? In the PAP, “defense costs” are included in the policy’s limits

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

True or False? Medical Payments coverage is issued on an excess basis to coordinate with PIP?

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

This coverage covers upset and/or overturn with another vehicle or object:

Other Than Collision

Correct Incorrect Correct answer

Specified Perils

Correct Incorrect Correct answer

Open Perils

Correct Incorrect Correct answer

Collision

Correct Incorrect Correct answer

Your insured has had a one vehicle accident with a tree. The policy has Other Than Collision coverage with a $250 deductible and Collision coverage with a $500 deductible. The insured vehicle has $2,500 in damages how much will the insured collect after applying the correct coverage and deductible?

$1,750

Correct Incorrect Correct answer

$2,000

Correct Incorrect Correct answer

$2,250

Correct Incorrect Correct answer

$2,500

Correct Incorrect Correct answer

This Homeowners policy form insures condominium owners?

HO-2

Correct Incorrect Correct answer

HO-3

Correct Incorrect Correct answer

HO-4

Correct Incorrect Correct answer

HO-6

Correct Incorrect Correct answer

Stacked UM coverage means:

A) Coverage limits for two or more vehicles are added together

Correct Incorrect Correct answer

B) UM deductibles are waived

Correct Incorrect Correct answer

C) Both A & B

Correct Incorrect Correct answer

D) None of the above

Correct Incorrect Correct answer

Chris was permanently injured in an auto accident by the negligence of Melanie. Chris’s injuries are valued at $1,000,000. Chris has PIP and has recovered his full $10,000 limit, and he has $100,000 per person and $300,000 per occurrence UM coverage. Melanie has a liability insurance policy with limits of 50,000/100,000/$50,000.

How much is Chris’s UM recovery?

$10,000

Correct Incorrect Correct answer

$40,000

Correct Incorrect Correct answer

$100,000

Correct Incorrect Correct answer

$300,000

Correct Incorrect Correct answer

Staci was permanently injured in an auto accident by the negligence of Jan. Staci’s injuries are valued at $1,000,000. Staci has PIP with a $0 deductible and has recovered $10,000 from PIP. She has UM coverage of $250,000/$500,000. Jan has a liability insurance policy with limits of 100,000/300,000/$50,000.
How much is Staci’s UMBI recovery?

$100,000

Correct Incorrect Correct answer

$250,000

Correct Incorrect Correct answer

$500,000

Correct Incorrect Correct answer

$500,000

Correct Incorrect Correct answer

True or False? Uninsured Motorist coverage applies if the insured is hit by a hit and run motorists.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Your insured has rejected Uninsured Motorists coverage because she has “great” health insurance. What is your response?

A) You agree with your insured

Correct Incorrect Correct answer

B) You advise your insured that UM covers non-economic damages such as pain and suffering

Correct Incorrect Correct answer

C) You advise your insured that UM covers lost wages

Correct Incorrect Correct answer

D) Both B & C

Correct Incorrect Correct answer

True or False. Janice is injured by Jack who was at fault in an automobile accident. Janice had $10,000 in medical bills and had purchased PIP with $500 deductible. Janice can recover $7,600 from her own PIP coverage ($10,000 – $500 x 80%) AND also has a tort right against Jack for $2,400 – the full amount of her economic loss.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

True or False: Individuals subject to the No-Fault law who comply with the law, are immune from legal liability for causing bodily injuries to others?

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Your insured has been injured in an automobile accident and wants to know what her PIP will cover:

A) You tell her 80% of her reasonable medical expenses

Correct Incorrect Correct answer

B) You tell her she will be reimbursed up to 60% of her gross income

Correct Incorrect Correct answer

C) You tell her she will have replacement services up to 75%

Correct Incorrect Correct answer

D) Both A and B

Correct Incorrect Correct answer

True or False? PIP benefits include coverage for those who rely on spiritual means through prayer alone for healing, in accordance with religious beliefs

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Little Richard, your auto insured has suffered a cracked driver’s side window. He has a $1,000 Other Than Collision deductible but he was told that glass claims are not subject to a deductible. How will you advise your client?

You advise Little Richard that non-windshield glass claims are compensable under the Other Than Collision coverage subject to his $1,000 deductible

Correct Incorrect Correct answer

You agree with your client but advise them that the $1,000 Other Than Collision deductible is per year and the side glass loss will count towards meeting the deductible

Correct Incorrect Correct answer

You advise your client that all glass damage is paid first dollar and no deductible applies

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

Which of the following are triggers of the financial responsibility law?

Accident involving bodily injury

Correct Incorrect Correct answer

Certain traffic offenses

Correct Incorrect Correct answer

Property damage rendering vehicle inoperable

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

Which of the following is NOT a trigger of the financial responsibility law?

Accident involving bodily injury

Correct Incorrect Correct answer

Accumulation of driving points

Correct Incorrect Correct answer

Property damage rendering vehicle inoperable

Correct Incorrect Correct answer

Certain traffic offenses

Correct Incorrect Correct answer

The Florida Financial Responsibility Law can be satisfied by which of the following:

A) Auto liability limits of 10/20/10

Correct Incorrect Correct answer

B) Qualified self-insurer for 10/20/10 limits

Correct Incorrect Correct answer

C) Both A & B

Correct Incorrect Correct answer

D) Neither A or B

Correct Incorrect Correct answer

An insurer is required to provide an insured with a ___ day notice of cancellation for underwriting reasons.

10

Correct Incorrect Correct answer

20

Correct Incorrect Correct answer

30

Correct Incorrect Correct answer

45

Correct Incorrect Correct answer

A PAP insurer has called your office advising that a non-renewal notice will be sent to your PAP insured. How many day notice is required for the non-renewal notice?

30

Correct Incorrect Correct answer

45

Correct Incorrect Correct answer

60

Correct Incorrect Correct answer

75

Correct Incorrect Correct answer

Herman Hornblower, your insured, has cancelled his PAP policy. How many days does the insurer have to return Herman’s premium payments?

10

Correct Incorrect Correct answer

20

Correct Incorrect Correct answer

30

Correct Incorrect Correct answer

40

Correct Incorrect Correct answer

The basic limits for Section II of the Homeowners policy are:

$100,000 Liability and $1,000 Medical Payments

Correct Incorrect Correct answer

$300,000 Liability and $3,000 Medical Payments

Correct Incorrect Correct answer

$500,000 Liability and $5,000 Medical Payments

Correct Incorrect Correct answer

$1,000,000 Liability and $10,000 Medical Payments

Correct Incorrect Correct answer

Your Homeowners insured has a motor vehicle in dead storage at the insured residence. Do they have liability coverage for that vehicle?

Yes

Correct Incorrect Correct answer

No

Correct Incorrect Correct answer

Not addressed by Section II of the Homeowners policy

Correct Incorrect Correct answer

No but liability can be endorsed

Correct Incorrect Correct answer

Statutory imposed vicarious liability is capped under the Homeowners policy at: __________.

$1,000

Correct Incorrect Correct answer

$5,000

Correct Incorrect Correct answer

$10,000

Correct Incorrect Correct answer

$100,000

Correct Incorrect Correct answer

Liability for motorized land conveyances under the Homeowners policy form applies to:

Vehicles anywhere

Correct Incorrect Correct answer

Vehicles in dead storage

Correct Incorrect Correct answer

Golf carts anywhere

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

Coverage E – Liability of the Homeowners policy indemnifies the insured from legal liability from personal activities ___________.

At work only

Correct Incorrect Correct answer

Anywhere

Correct Incorrect Correct answer

Personal activities are not covered

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

An insured has curiously called you to ask if his burial plot is insured for Liability under his Homeowners policy. How will you respond?

Advise the insured that cemetery plots and burial vaults are covered as insured locations

Correct Incorrect Correct answer

Advise the insured that cemetery plots and burial vaults are excluded as insured locations

Correct Incorrect Correct answer

Advise the insured that cemetery plots and burial vaults are not addressed in the Homeowners policy

Correct Incorrect Correct answer

Advise the insured that only the residence premises is considered an insured location for Section II of the Homeowners policy

Correct Incorrect Correct answer

Your Homeowners insured has taken his off-road recreation vehicle to the Utah Salt Flats to see how fast it can really go. Unfortunately he hit another off-road recreational vehicle enthusiast while he was testing his maximum speed.
How will the Homeowners policy respond?

Property Damage and Bodily Injury for the other party will be covered 100% up to the policy limits

Correct Incorrect Correct answer

The Homeowners policy will not pay anything as owned RVs are not covered for Liability off the residence premises

Correct Incorrect Correct answer

The policy will pay for the damages as long at the length of the recreational vehicle does not exceed 16 feet

Correct Incorrect Correct answer

The policy will pay for the damages as long at the length of the recreational vehicle does not exceed 350 horsepower.

Correct Incorrect Correct answer

Your Homeowners insured has rented an off-road recreation vehicle at Cape May to drive up and down the beach. Unfortunately she ran over two sunbathers.
How will the Homeowners policy respond?

Bodily Injury for the injured parties will be covered up to the policy limits

Correct Incorrect Correct answer

The Homeowners policy will not pay anything as owned RVs are not covered for Liability off the residence premises

Correct Incorrect Correct answer

The policy will pay for the damages as long at the length of the recreational vehicle does not exceed 200 horsepower

Correct Incorrect Correct answer

The policy will pay for the damages as long at the length of the recreational vehicle does not exceed 350 horsepower

Correct Incorrect Correct answer

Your insured owns a sailboat which is 25 feet long. Will Section II – Liability of the Homeowners policy provide coverage for the insured’s legal liability while operating the watercraft?

Yes, as it is under 26 feet

Correct Incorrect Correct answer

Yes, as it is under 30 feet

Correct Incorrect Correct answer

Yes, as it is under 45 feet

Correct Incorrect Correct answer

No, watercraft liability is excluded under Section II of the Homeowners policy

Correct Incorrect Correct answer

Your insured owns a boat with an inboard/outboard motor which is 25 feet long. The insured has collided with another boater damaging the hull of the boat to the tune of $10,000. How will the Homeowners policy respond?

The $10,000 claim will be paid as the occurrence is compensable given the length of the boat

Correct Incorrect Correct answer

The $10,000 claim will not be paid as the occurrence is not compensable given the ownership and use of an inboard/outboard watercraft

Correct Incorrect Correct answer

The claim will be paid less the watercraft liability deductible (standard $500 in Florida)

Correct Incorrect Correct answer

Florida Statutes require all watercraft liabilities to be paid under the Homeowners policy up to the Section II limit

Correct Incorrect Correct answer

An insured’s legal liability for the usage of a golf cart is covered:

A) At the insured’s residence

Correct Incorrect Correct answer

B) On a golf course

Correct Incorrect Correct answer

C) Both A & B

Correct Incorrect Correct answer

D) Neither A or B

Correct Incorrect Correct answer

True or False? Section II- Liability of the Homeowners policy excludes liability coverage for damage caused by a motorized vehicle which is normally used to assist a handicapped family member if the vehicle damages property or injures third parties while not being used in it’s “assistance” capacity at the time of loss.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

This endorsement protects the insured’s legal liability for libel, slander, and defamation.

Incidental Injury endorsement

Correct Incorrect Correct answer

Personal Injury Liability endorsement

Correct Incorrect Correct answer

Libel, Slander, and Defamation endorsement

Correct Incorrect Correct answer

This exposure is not available under the ISO HO-3

Correct Incorrect Correct answer

This Homeowners policy endorsement provides an additional amount of insurance over and above the stated Coverage A Dwelling amount

Inflation Guard

Correct Incorrect Correct answer

Building Ordinance or Law

Correct Incorrect Correct answer

Personal Property Replacement Cost

Correct Incorrect Correct answer

Extended Replacement Cost

Correct Incorrect Correct answer

An eligible building is a structure:

A) Affixed to a permanent site

Correct Incorrect Correct answer

B) With two or more outside walls and secured roof

Correct Incorrect Correct answer

C) 25% or more of the value above ground level

Correct Incorrect Correct answer

D) Both A & B

Correct Incorrect Correct answer

This Flood Form is written for condominium associations:

Dwelling Form

Correct Incorrect Correct answer

Preferred Risk Policy

Correct Incorrect Correct answer

General Property Form

Correct Incorrect Correct answer

Residential Condominium building Association Policy Form

Correct Incorrect Correct answer

All of the following apply to the Division of Agents & Agencies Services EXCEPT?

Investigate charges of unethical conduct

Correct Incorrect Correct answer

Issue agent licenses

Correct Incorrect Correct answer

Set insurance rates

Correct Incorrect Correct answer

Supervision of insurance claims activity

Correct Incorrect Correct answer

This unit reviews and approves company applications to sell insurance:

Bureau of Specialty Insurers

Correct Incorrect Correct answer

Applications Coordination Unit

Correct Incorrect Correct answer

Division of Agents and Agencies Services

Correct Incorrect Correct answer

Bureau of Life and Health Forms and Rates

Correct Incorrect Correct answer

An insurance company owned by its policyholders is a….

Mutual Insurer

Correct Incorrect Correct answer

Reciprocal Exchange

Correct Incorrect Correct answer

Stock Insurance Company

Correct Incorrect Correct answer

Lloyds of London

Correct Incorrect Correct answer

A non-licensed member of your office has solicited a potential insured for an insurance policy is this considered “transacting insurance”?

A) No, because the staff member is unlicensed

Correct Incorrect Correct answer

B) Yes, because any solicitation of an insurance policy is considered “transacting insurance”

Correct Incorrect Correct answer

C) No, it is only considered “transacting insurance” if the person were to purchase the policy

Correct Incorrect Correct answer

D) Both A and C

Correct Incorrect Correct answer

True or False: A “foreign” insurer is one formed under the laws of this state.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Which if any of the following are required to have a Certificate of Authority?

Agency

Correct Incorrect Correct answer

Agent

Correct Incorrect Correct answer

Insurance Company

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

You have just learned that a new insurance company in Florida has a certificate of authority issued by the department to transact insurance in this state. This new company is an _________ company.

Authorized

Correct Incorrect Correct answer

Unauthorized

Correct Incorrect Correct answer

Stock

Correct Incorrect Correct answer

Mutual

Correct Incorrect Correct answer

True or False? Transportation Expense (TE) coverage does not require Other Than Collision or Collision coverage to be provided by an insured’s policy for the TE coverage to be in effect.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

True or False? An insured’s Collision coverage covers loss from the collision, upset, or overturn of an insured vehicle.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

Mitigation credits are available for roof coverings if the roof is installed per the ____ Florida Building Code.

1995

Correct Incorrect Correct answer

2000

Correct Incorrect Correct answer

2001

Correct Incorrect Correct answer

There are no credits for roof coverings
Who is a licensed insurance representative responsible to?

Agency

Correct Incorrect Correct answer

Insurance Company

Correct Incorrect Correct answer

Insured

Correct Incorrect Correct answer

each of these are correct

Correct Incorrect Correct answer

You, a General Agent, have hired a Customer Representative with an understanding that the Customer Representative’s compensation will be predominately commission based. Is commission based compensation permitted for Customer Representatives?

any agreement between a Customer Representative and the agency-employer is permitted

Correct Incorrect Correct answer

compensation based upon premium or other production is permissible per F.S. 626.7354

Correct Incorrect Correct answer

no, production based compensation (i.e. commission based) is not permitted per 626.7354

Correct Incorrect Correct answer

none of these apply

Correct Incorrect Correct answer

You, the Agent in Charge, have asked your customer representative to transact insurance business outside of your agency’s office. Is this permissible?

it is permissible as long as you, the appointing agent, are aware of the outside activities

Correct Incorrect Correct answer

it is not permissible per F.S. 626.7354

Correct Incorrect Correct answer

it is permissible as long as the business corresponds to the types of business you, the appointing agent, are licensed to sell

Correct Incorrect Correct answer

none of these apply

Correct Incorrect Correct answer

FWCJUA Tier One eligible insureds:

Must have modification factors below 1.00

Correct Incorrect Correct answer

No lost time claims

Correct Incorrect Correct answer

Both A & B

Correct Incorrect Correct answer

Neither A or B

Correct Incorrect Correct answer

Hospitalization Expense Insurance pays for all BUT which of the following…

Room and board in the hospital

Correct Incorrect Correct answer

Nursing care

Correct Incorrect Correct answer

Laboratory fees

Correct Incorrect Correct answer

Vision and Dental

Correct Incorrect Correct answer

Accident Insurance

Protects specifically for injury from accidents

Correct Incorrect Correct answer

May include provisions for hospital, physician, and nursing expenses

Correct Incorrect Correct answer

May include provision for lost wages

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

A bailor is:

A. The custodian of another’s property

Correct Incorrect Correct answer

B. The owner of property in the care of another

Correct Incorrect Correct answer

C. Both A & B

Correct Incorrect Correct answer

D. Neither A or B

Correct Incorrect Correct answer

Which bond guarantees the Principal’s maintenance of faulty work and replacement of defective materials if required by law or contract?

Payment Bond

Correct Incorrect Correct answer

Maintenance Bond

Correct Incorrect Correct answer

Subdivision Bond

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

The 4 Cs of surety underwriting are:

Character, capital, capacity, and collateral

Correct Incorrect Correct answer

Character, corporate, capacity, and collateral

Correct Incorrect Correct answer

Character, capital, chartered, and collateral

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

Crime coverage “Computer Fraud” covers:

Loss of money and securities resulting from theft, disappearance, or destruction

Correct Incorrect Correct answer

Worldwide coverage of loss of money, securities and other property by use of a computer to fraudulently convert assets

Correct Incorrect Correct answer

Loss resulting from receiving payment with counterfeit currency or money orders

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

The insured has incurred extraordinary expenses with the use of a public adjuster and seeks compensation for those expenses in their Crime claim. Will the Crime policy form pay for those expenses?

Yes, if they are reasonable

Correct Incorrect Correct answer

Yes, they are specifically covered by the Crime policy form

Correct Incorrect Correct answer

No, as the Crime policy form specifically excludes cost incurred to establish the amount of loss

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

Workers’ Compensation rating is based on the cost per $___ of payroll per class code.

$100

Correct Incorrect Correct answer

$1,000

Correct Incorrect Correct answer

$1,000

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

The Florida law permits secured payments of compensation by

Purchase of insurance

Correct Incorrect Correct answer

Self-insurance

Correct Incorrect Correct answer

Pooled liabilities

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

Under Florida’s Workers’ Compensation laws what is the maximum daily fine as a penalty for non-compliance?

$1,000 fine each day of non-compliance

Correct Incorrect Correct answer

$2,500 fine each day of non-compliance

Correct Incorrect Correct answer

$5,000 fine each day of non-compliance

Correct Incorrect Correct answer

any of the above as there is no set limit

Correct Incorrect Correct answer

Advantages of the Commercial Package Policy include all BUT which of the following:

Simplifies insured’s administration of many policies

Correct Incorrect Correct answer

Eliminates policy conditions

Correct Incorrect Correct answer

Reduces coverage gaps and overlapping coverage

Correct Incorrect Correct answer

Reduces coverage gaps and overlapping coverage

Correct Incorrect Correct answer

For a convenience store to be eligible for a BOP gasoline sales must be less than ___% of total annual gross sales.

10%

Correct Incorrect Correct answer

25%

Correct Incorrect Correct answer

50%

Correct Incorrect Correct answer

75%

Correct Incorrect Correct answer

A restaurant’s BOP eligibility may pertain to:

Seating capacity

Correct Incorrect Correct answer

Types of food and drinks served

Correct Incorrect Correct answer

Methods of cooking

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

Physicians, Surgeons and Dentist professional liability insurance covers legal liability resulting from….

Automobile accident

Correct Incorrect Correct answer

Employee injury

Correct Incorrect Correct answer

Employee injury

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

True or False: Excess liability and Umbrella coverage are for the rich and famous only.

True

Correct Incorrect Correct answer

False

Correct Incorrect Correct answer

This CGL coverage form provides a monoline form solely for the Products/Completed Operation’s exposure:

Owners and Contractors Protective Liability Form (OCP)

Correct Incorrect Correct answer

Products/Completed Operations Coverage Form

Correct Incorrect Correct answer

Liquor Liability Coverage Form

Correct Incorrect Correct answer

Pollution Liability Coverage Form

Correct Incorrect Correct answer

Who must pay premiums and is also the party who receives and return or refundable premium?

Any Named Insured

Correct Incorrect Correct answer

Any Loss Payee or Mortgagee

Correct Incorrect Correct answer

The First Named Insured

Correct Incorrect Correct answer

The Lessor if the policy is subject to a lease

Correct Incorrect Correct answer

Under the Garage Policy Section II provides liability coverage less a _____ deductible for work performed by the insured.

$100

Correct Incorrect Correct answer

$250

Correct Incorrect Correct answer

$500

Correct Incorrect Correct answer

$1,000

Correct Incorrect Correct answer

The Garage Policy endorsement “False Pretense” provides coverage for:

Product liability for the insured’s own product/work ($250 deductible applies)

Correct Incorrect Correct answer

Product liability for the insured’s own product/work ($250 deductible applies)

Correct Incorrect Correct answer

Loss from acquiring an auto from someone who does not have legal title or voluntarily parting with a covered auto by trick or scheme

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

Section III Physical Damage in the BAP covers:

A. Collision

Correct Incorrect Correct answer

B. Comprehensive or Specified Perils

Correct Incorrect Correct answer

C. Both A & B

Correct Incorrect Correct answer

D. Neither A or B

Correct Incorrect Correct answer

The BAP policy includes all BUT which of the following “usage” categories:

Retail

Correct Incorrect Correct answer

Long-Hauler

Correct Incorrect Correct answer

Commercial

Correct Incorrect Correct answer

Service

Correct Incorrect Correct answer

The consequences for aiding and abetting an unauthorized insurer include:

A) misdemeanor

Correct Incorrect Correct answer

B) third degree felony

Correct Incorrect Correct answer

C) liability of unpaid claims

Correct Incorrect Correct answer

D) both B & C

Correct Incorrect Correct answer

The Citizens HO-3 policy has an endorsement for?

Home Day Care

Correct Incorrect Correct answer

Personal Injury Liability

Correct Incorrect Correct answer

Scheduled Personal Property

Correct Incorrect Correct answer

Replacement Cost on Contents

Correct Incorrect Correct answer

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