Florida 6-20 All Lines Adjuster Exam 2026/2027 |
Practice Questions + Verified Answers + Detailed
Rationales | Graded A+ | Complete Study Guide |
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,1. The principle that restores an insured to approximately the same financial
position after a loss is called:
A. Subrogation
B. Indemnity
C. Utmost good faith
D. Insurable interest
B. Indemnity
Indemnity means the insured should be restored to approximately the
same financial position after a loss, no better and no worse.
2. The insured must have a legal or financial interest in the person or property
insured at the time of loss. This is known as:
A. Waiver
B. Estoppel
C. Insurable interest
D. Subrogation
C. Insurable interest
Insurable interest prevents insurance from becoming a gambling contract
and requires a legitimate interest in the subject of insurance.
3. A false statement made by an applicant that materially affects the insurer’s
decision to issue coverage is called:
A. Concealment
B. Material misrepresentation
C. Waiver
D. Estoppel
, B. Material misrepresentation
A material misrepresentation can allow the insurer to rescind or deny
coverage because it affected the underwriting decision.
4. The voluntary surrender of a known right by an insurer is called:
A. Estoppel
B. Subrogation
C. Waiver
D. Indemnity
C. Waiver
Waiver occurs when an insurer intentionally gives up a known right under
the policy.
5. When an insurer’s conduct leads an insured to reasonably believe a right
will not be enforced, the insurer may be prevented from later denying
coverage. This is:
A. Waiver
B. Estoppel
C. Subrogation
D. Coinsurance
B. Estoppel
Estoppel prevents a party from asserting a right after conduct that misled
another party to their detriment.
6. The right of an insurer to recover claim payments from a negligent third
party is called:
A. Subrogation
, B. Indemnity
C. Salvage
D. Abandonment
A. Subrogation
Subrogation allows the insurer to step into the insured’s legal position and
pursue the responsible third party.
7. A coinsurance clause in a property policy is intended to:
A. Penalize insurers for overpayment
B. Encourage insureds to carry insurance to value
C. Eliminate deductibles
D. Provide liability coverage
B. Encourage insureds to carry insurance to value
Coinsurance encourages the insured to insure property to a specified
percentage of its value to avoid a penalty at loss settlement.
8. Actual cash value is generally defined as:
A. Replacement cost plus depreciation
B. Replacement cost minus depreciation
C. Market value plus deductible
D. Original purchase price
B. Replacement cost minus depreciation
Actual cash value typically equals replacement cost minus depreciation,
reflecting the property’s value at the time of loss.
9. A deductible in an insurance policy serves to:
A. Increase the insurer’s liability
Practice Questions + Verified Answers + Detailed
Rationales | Graded A+ | Complete Study Guide |
Instant PDF Download
,1. The principle that restores an insured to approximately the same financial
position after a loss is called:
A. Subrogation
B. Indemnity
C. Utmost good faith
D. Insurable interest
B. Indemnity
Indemnity means the insured should be restored to approximately the
same financial position after a loss, no better and no worse.
2. The insured must have a legal or financial interest in the person or property
insured at the time of loss. This is known as:
A. Waiver
B. Estoppel
C. Insurable interest
D. Subrogation
C. Insurable interest
Insurable interest prevents insurance from becoming a gambling contract
and requires a legitimate interest in the subject of insurance.
3. A false statement made by an applicant that materially affects the insurer’s
decision to issue coverage is called:
A. Concealment
B. Material misrepresentation
C. Waiver
D. Estoppel
, B. Material misrepresentation
A material misrepresentation can allow the insurer to rescind or deny
coverage because it affected the underwriting decision.
4. The voluntary surrender of a known right by an insurer is called:
A. Estoppel
B. Subrogation
C. Waiver
D. Indemnity
C. Waiver
Waiver occurs when an insurer intentionally gives up a known right under
the policy.
5. When an insurer’s conduct leads an insured to reasonably believe a right
will not be enforced, the insurer may be prevented from later denying
coverage. This is:
A. Waiver
B. Estoppel
C. Subrogation
D. Coinsurance
B. Estoppel
Estoppel prevents a party from asserting a right after conduct that misled
another party to their detriment.
6. The right of an insurer to recover claim payments from a negligent third
party is called:
A. Subrogation
, B. Indemnity
C. Salvage
D. Abandonment
A. Subrogation
Subrogation allows the insurer to step into the insured’s legal position and
pursue the responsible third party.
7. A coinsurance clause in a property policy is intended to:
A. Penalize insurers for overpayment
B. Encourage insureds to carry insurance to value
C. Eliminate deductibles
D. Provide liability coverage
B. Encourage insureds to carry insurance to value
Coinsurance encourages the insured to insure property to a specified
percentage of its value to avoid a penalty at loss settlement.
8. Actual cash value is generally defined as:
A. Replacement cost plus depreciation
B. Replacement cost minus depreciation
C. Market value plus deductible
D. Original purchase price
B. Replacement cost minus depreciation
Actual cash value typically equals replacement cost minus depreciation,
reflecting the property’s value at the time of loss.
9. A deductible in an insurance policy serves to:
A. Increase the insurer’s liability
