214 FLORIDA INSURANCE EXAM ACTUAL EXAMINATION
Questions with Correct Answers (Grade A+)
Question 1: Risk is NOT the loss itself, but the _________ of loss.
Answer: CHANCE
Question 2: Policy
Answer: a written contract for effecting insurance and includes Clauses, Riders, endorsements, and papers
which are part of the contract
Question 3: Insurance
Answer: a contract where one undertakes to indemnify another or pay a specific amount determined on
contingencies
Question 4: Binders
Answer: temporary insurance which can be made orally or written
Question 5: where payment is made directly to the insured or other named interest
Answer: property insurance
Question 6: where payment is made on behalf of the insured to another
Answer: liability insurance
Question 7: Indemnity contract
Answer: one-party should be put back in the same Financial condition they were before the loss. Never
profit from A Loss.
Question 8: replacement cost
Answer: given new for old
Question 9: agreed value
Answer: specific amount agreed in advance
Question 10: Florida value policy law
Answer: paid limit for total loss
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, Question 11: liability
Answer: pays amount that exceeds insured's resources
Question 12: insurable interest
Answer: insured would suffer economic loss
Question 13: peril
Answer: a contingency that may cause a loss example Wind, Fire, theft
Question 14: hazard
Answer: a condition that increases the likelihood of a loss from a covered peril
Question 15: physical hazard
Answer: physical characteristics that increase the probability and severity of loss example ice-covered steps
Question 16: moral hazard
Answer: intentional loss example steal from employer
Question 17: Morale hazard
Answer: accident prone or carelessness example did not lock the car door
Question 18: proximate cause
Answer: root cause a doctrine that states when there is an unbroken connection between An Occurrence and
damage that grows out of the occurrence, then the resultant damage is all part of the occurrence.
Question 19: direct loss
Answer: physical harm to tangible property
Question 20: indirect loss
Answer: economic loss which flows as a consequence of the direct loss example hotel stay after a fire
Question 21: actual cash value
Answer: is the current cost to replace the item minus depreciation
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Questions with Correct Answers (Grade A+)
Question 1: Risk is NOT the loss itself, but the _________ of loss.
Answer: CHANCE
Question 2: Policy
Answer: a written contract for effecting insurance and includes Clauses, Riders, endorsements, and papers
which are part of the contract
Question 3: Insurance
Answer: a contract where one undertakes to indemnify another or pay a specific amount determined on
contingencies
Question 4: Binders
Answer: temporary insurance which can be made orally or written
Question 5: where payment is made directly to the insured or other named interest
Answer: property insurance
Question 6: where payment is made on behalf of the insured to another
Answer: liability insurance
Question 7: Indemnity contract
Answer: one-party should be put back in the same Financial condition they were before the loss. Never
profit from A Loss.
Question 8: replacement cost
Answer: given new for old
Question 9: agreed value
Answer: specific amount agreed in advance
Question 10: Florida value policy law
Answer: paid limit for total loss
Page 1
, Question 11: liability
Answer: pays amount that exceeds insured's resources
Question 12: insurable interest
Answer: insured would suffer economic loss
Question 13: peril
Answer: a contingency that may cause a loss example Wind, Fire, theft
Question 14: hazard
Answer: a condition that increases the likelihood of a loss from a covered peril
Question 15: physical hazard
Answer: physical characteristics that increase the probability and severity of loss example ice-covered steps
Question 16: moral hazard
Answer: intentional loss example steal from employer
Question 17: Morale hazard
Answer: accident prone or carelessness example did not lock the car door
Question 18: proximate cause
Answer: root cause a doctrine that states when there is an unbroken connection between An Occurrence and
damage that grows out of the occurrence, then the resultant damage is all part of the occurrence.
Question 19: direct loss
Answer: physical harm to tangible property
Question 20: indirect loss
Answer: economic loss which flows as a consequence of the direct loss example hotel stay after a fire
Question 21: actual cash value
Answer: is the current cost to replace the item minus depreciation
Page 2
