Florida Claims Adjuster Exam Latest
Practice Questions with Detailed
Answers
Severability – correct answer – Insurance applies separately to each insured as if other
insureds did not exist.
Abandonment – correct answer – Property insurance policies usually contain an
abandonment clause, stating the insured cannot dump damaged property on the
insurer and demand its full value.
Insurable Interest – correct answer – One wherein economic loss would be suffered
from an adverse happening to the subject.
Liberalization – correct answer – States that if the insurer adopts a revision which would
broaden coverage without additional premium within some period of time prior to the
policy period or during the policy period, the insured receives the benefit of such
broadened coverage.
Doctrine of Proximate Cause – correct answer – States that when there is an unbroken
connection between an occurrence and damage that grows out of the occurrence, then
the resultant damage is all a part of the occurrence.
Indemnity – correct answer – A principle that aims to return the insured to the same
financial position after a loss as before the loss, without profit.
Subrogation – correct answer – The right of an insurer after paying a loss to pursue the
party responsible for the loss to recover the amount paid.
Utmost Good Faith – correct answer – A legal doctrine requiring both the insurer and
the insured to deal honestly and disclose all material facts relevant to the risk.
Representation – correct answer – A statement made by the applicant on an insurance
application that is believed to be true to the best of their knowledge, but not
guaranteed.
Concealment – correct answer – The intentional withholding of a material fact that, if
known, would affect the insurer’s decision to issue the policy or set the premium.
,Waiver – correct answer – The voluntary and intentional relinquishment of a known
right under an insurance policy.
Estoppel – correct answer – A legal principle that prevents a party from asserting a fact
or right that is inconsistent with a previous position or conduct that another party relied
upon.
Appraisal – correct answer – A method used to resolve a dispute about the amount of
loss when the insurer and insured cannot agree, using independent appraisers and an
umpire.
Salvage – correct answer – The property taken over by an insurer after paying a total
loss, which the insurer may then sell to reduce its net loss.
Vacancy Provision – correct answer – A policy condition that reduces or eliminates
coverage if a building is vacant for a specified number of days (often 60 days) before a
loss.
Ordinance or Law Coverage – correct answer – Provides additional insurance for
increased costs due to enforcement of building codes or ordinances after a covered loss.
Pair and Set Clause – correct answer – In property insurance, if an item in a matched
set is lost or damaged, the insurer may pay only the actual cash value of the lost item
rather than the full set’s value.
Loss of Use – correct answer – Coverage that reimburses the insured for additional
living expenses or lost rental income when the insured property is damaged and
uninhabitable.
Direct Loss – correct answer – Physical damage to property caused directly by a
covered peril, such as fire or wind.
Indirect Loss – correct answer – Financial loss resulting from a direct loss, such as
business interruption due to fire damage.
Pro Rata Distribution – correct answer – When multiple insurance policies cover the
same loss, each insurer pays a percentage equal to its policy limit divided by the total
limits of all policies.
Other Insurance Clause – correct answer – A policy provision that determines how the
insurer will share a loss when other valid insurance exists on the same property.
,Contribution by Equal Shares – correct answer – A method of loss allocation among
multiple insurers where each insurer pays an equal share until the loss is paid or its
limits are exhausted.
Claims Adjuster – correct answer – A licensed professional who investigates, evaluates,
and settles insurance claims on behalf of an insurer or insured.
Bad Faith – correct answer – An insurer’s unreasonable denial of coverage or failure to
settle a claim within policy limits, which may expose the insurer to extra-contractual
damages.
Reservation of Rights Letter – correct answer – A letter from an insurer to the insured
stating that coverage may not apply to a claim, but the insurer will investigate while
reserving its rights to deny coverage later.
Non-Waiver Agreement – correct answer – A written agreement signed by the insured
that allows the insurer to investigate or defend a claim without waiving any policy
defenses.
Statute of Limitations – correct answer – The time limit within which a lawsuit must be
filed after a loss or denial of claim (e.g., 5 years for property damage in Florida).
Florida’s Sinkhole Loss Coverage – correct answer – Mandatory coverage for structural
damage caused by sinkhole activity, including stabilization and repair.
Civil Authority Coverage – correct answer – Pays for loss of business income when
government action prohibits access to the insured’s premises due to damage to nearby
property from a covered peril.
Actual Cash Value (ACV) – correct answer – The cost to replace damaged property with
new property of like kind and quality, minus depreciation.
Replacement Cost – correct answer – The cost to repair or replace damaged property
with new property of like kind and quality, without deduction for depreciation.
Stated Value – correct answer – An amount agreed upon by the insurer and insured as
the value of the property, often used for antique or classic cars.
Agreed Value – correct answer – A policy condition that waives the coinsurance clause
if the insured carries insurance equal to a stated percentage of the property’s value.
, Coinsurance – correct answer – A penalty clause that reduces a loss payment if the
insured carries less than a specified percentage (usually 80% or 90%) of the property’s
full replacement cost.
Claims-Made Policy – correct answer – A liability policy that covers claims made during
the policy period, regardless of when the alleged incident occurred, as long as the
incident occurred after the retroactive date.
Occurrence Policy – correct answer – A liability policy that covers incidents that occur
during the policy period, regardless of when the claim is reported.
Retroactive Date – correct answer – A date specified in a claims-made policy; incidents
occurring before that date are not covered.
Tail Coverage – correct answer – An extended reporting period added to a
claims-made policy to cover claims reported after the policy expires for incidents that
occurred during the policy period.
Self-Insured Retention (SIR) – correct answer – A dollar amount that the insured must
pay before the insurer’s coverage applies, similar to a deductible but often applied to
liability policies.
Deductible – correct answer – The amount the insured must pay out of pocket before
the insurer pays a covered loss.
Aggregate Limit – correct answer – The maximum amount an insurer will pay for all
covered losses during a policy period.
Per Occurrence Limit – correct answer – The maximum amount an insurer will pay for a
single loss or incident.
Split Limits – correct answer – Liability policy limits that state separate maximum
amounts for bodily injury per person, bodily injury per accident, and property damage
per accident.
Combined Single Limit (CSL) – correct answer – A liability policy limit that is the total
maximum amount available for all damages (bodily injury and property damage) from a
single accident.
Umbrella Policy – correct answer – An excess liability policy that provides additional
coverage above underlying policies and may also cover gaps in primary coverage.
Practice Questions with Detailed
Answers
Severability – correct answer – Insurance applies separately to each insured as if other
insureds did not exist.
Abandonment – correct answer – Property insurance policies usually contain an
abandonment clause, stating the insured cannot dump damaged property on the
insurer and demand its full value.
Insurable Interest – correct answer – One wherein economic loss would be suffered
from an adverse happening to the subject.
Liberalization – correct answer – States that if the insurer adopts a revision which would
broaden coverage without additional premium within some period of time prior to the
policy period or during the policy period, the insured receives the benefit of such
broadened coverage.
Doctrine of Proximate Cause – correct answer – States that when there is an unbroken
connection between an occurrence and damage that grows out of the occurrence, then
the resultant damage is all a part of the occurrence.
Indemnity – correct answer – A principle that aims to return the insured to the same
financial position after a loss as before the loss, without profit.
Subrogation – correct answer – The right of an insurer after paying a loss to pursue the
party responsible for the loss to recover the amount paid.
Utmost Good Faith – correct answer – A legal doctrine requiring both the insurer and
the insured to deal honestly and disclose all material facts relevant to the risk.
Representation – correct answer – A statement made by the applicant on an insurance
application that is believed to be true to the best of their knowledge, but not
guaranteed.
Concealment – correct answer – The intentional withholding of a material fact that, if
known, would affect the insurer’s decision to issue the policy or set the premium.
,Waiver – correct answer – The voluntary and intentional relinquishment of a known
right under an insurance policy.
Estoppel – correct answer – A legal principle that prevents a party from asserting a fact
or right that is inconsistent with a previous position or conduct that another party relied
upon.
Appraisal – correct answer – A method used to resolve a dispute about the amount of
loss when the insurer and insured cannot agree, using independent appraisers and an
umpire.
Salvage – correct answer – The property taken over by an insurer after paying a total
loss, which the insurer may then sell to reduce its net loss.
Vacancy Provision – correct answer – A policy condition that reduces or eliminates
coverage if a building is vacant for a specified number of days (often 60 days) before a
loss.
Ordinance or Law Coverage – correct answer – Provides additional insurance for
increased costs due to enforcement of building codes or ordinances after a covered loss.
Pair and Set Clause – correct answer – In property insurance, if an item in a matched
set is lost or damaged, the insurer may pay only the actual cash value of the lost item
rather than the full set’s value.
Loss of Use – correct answer – Coverage that reimburses the insured for additional
living expenses or lost rental income when the insured property is damaged and
uninhabitable.
Direct Loss – correct answer – Physical damage to property caused directly by a
covered peril, such as fire or wind.
Indirect Loss – correct answer – Financial loss resulting from a direct loss, such as
business interruption due to fire damage.
Pro Rata Distribution – correct answer – When multiple insurance policies cover the
same loss, each insurer pays a percentage equal to its policy limit divided by the total
limits of all policies.
Other Insurance Clause – correct answer – A policy provision that determines how the
insurer will share a loss when other valid insurance exists on the same property.
,Contribution by Equal Shares – correct answer – A method of loss allocation among
multiple insurers where each insurer pays an equal share until the loss is paid or its
limits are exhausted.
Claims Adjuster – correct answer – A licensed professional who investigates, evaluates,
and settles insurance claims on behalf of an insurer or insured.
Bad Faith – correct answer – An insurer’s unreasonable denial of coverage or failure to
settle a claim within policy limits, which may expose the insurer to extra-contractual
damages.
Reservation of Rights Letter – correct answer – A letter from an insurer to the insured
stating that coverage may not apply to a claim, but the insurer will investigate while
reserving its rights to deny coverage later.
Non-Waiver Agreement – correct answer – A written agreement signed by the insured
that allows the insurer to investigate or defend a claim without waiving any policy
defenses.
Statute of Limitations – correct answer – The time limit within which a lawsuit must be
filed after a loss or denial of claim (e.g., 5 years for property damage in Florida).
Florida’s Sinkhole Loss Coverage – correct answer – Mandatory coverage for structural
damage caused by sinkhole activity, including stabilization and repair.
Civil Authority Coverage – correct answer – Pays for loss of business income when
government action prohibits access to the insured’s premises due to damage to nearby
property from a covered peril.
Actual Cash Value (ACV) – correct answer – The cost to replace damaged property with
new property of like kind and quality, minus depreciation.
Replacement Cost – correct answer – The cost to repair or replace damaged property
with new property of like kind and quality, without deduction for depreciation.
Stated Value – correct answer – An amount agreed upon by the insurer and insured as
the value of the property, often used for antique or classic cars.
Agreed Value – correct answer – A policy condition that waives the coinsurance clause
if the insured carries insurance equal to a stated percentage of the property’s value.
, Coinsurance – correct answer – A penalty clause that reduces a loss payment if the
insured carries less than a specified percentage (usually 80% or 90%) of the property’s
full replacement cost.
Claims-Made Policy – correct answer – A liability policy that covers claims made during
the policy period, regardless of when the alleged incident occurred, as long as the
incident occurred after the retroactive date.
Occurrence Policy – correct answer – A liability policy that covers incidents that occur
during the policy period, regardless of when the claim is reported.
Retroactive Date – correct answer – A date specified in a claims-made policy; incidents
occurring before that date are not covered.
Tail Coverage – correct answer – An extended reporting period added to a
claims-made policy to cover claims reported after the policy expires for incidents that
occurred during the policy period.
Self-Insured Retention (SIR) – correct answer – A dollar amount that the insured must
pay before the insurer’s coverage applies, similar to a deductible but often applied to
liability policies.
Deductible – correct answer – The amount the insured must pay out of pocket before
the insurer pays a covered loss.
Aggregate Limit – correct answer – The maximum amount an insurer will pay for all
covered losses during a policy period.
Per Occurrence Limit – correct answer – The maximum amount an insurer will pay for a
single loss or incident.
Split Limits – correct answer – Liability policy limits that state separate maximum
amounts for bodily injury per person, bodily injury per accident, and property damage
per accident.
Combined Single Limit (CSL) – correct answer – A liability policy limit that is the total
maximum amount available for all damages (bodily injury and property damage) from a
single accident.
Umbrella Policy – correct answer – An excess liability policy that provides additional
coverage above underlying policies and may also cover gaps in primary coverage.
