Claims Adjuster Florida Exam Review Questions
with Verified Correct Answers
For purposes of insurance, a "loss" is best defined as:
an unwelcomed, unplanned reduction in economic value
An automatic sprinkler system in a hotel building is a risk reduction measure because it:
reduces the amount of damage that a fire is likely to do
Insuring a new restaurant against business failure is not possible because business success or
failure is:
a speculative risk
Which of the following is an example of pure risk?
the possibility of a business being flooded
Zenith Insurance Company issues a policy to Best Manufacturing Company. A dispute arises
between Zenith and Best on the meaning of an ambiguous clause in their contract. The matter
goes to court, which can be expected to interpret the clause in a manner that:
favors Best Manufacturing
The fact that insurance policy language is written by an insurance company and is
nonnegotiable makes insurance policies:
contracts of adhesion
Which of the following correctly identifies three elements that must be present to create an
enforceable contract?
acceptance, consideration, and offer
Rhonda's parents bought her a car for her sixteenth birthday and made her responsible for
maintaining and insuring it. However, when Rhonda applied for auto insurance after getting
,her driver's license, she was told that she could not enter into a binding insurance contract
because, according to the law in her state, a 16-year-old does not qualify as a(n):
competent party
A fire severely damages Carl's home, making it uninhabitable. He moves his family to a hotel
while the house is repaired. The additional expenses incurs in housing the family are
considered what type of loss?
indirect
Butch's Meat Market loses electrical power during a flood. The business closes for several
days, during which time there is no refrigeration and a large quantity of meat spoils. The loss
of the meat is what type of loss?
consequential
"Replacement cost minus physical depreciation" describes which type of loss valuation
method?
actual cash value
From a property insurance perspective, which of the following is NOT a basic type of
construction?
steel
For an insurer to pay a property insurance claim, when must the policyholder have an
insurable interest in the insured property?
at the time of the loss
Ken's house has an exterior layer of brick that covers wooden walls supported by wooden 2-
by-4 studs. What type of construction does Ken's house have?
masonry veneer
Corinne purchased her home with a 10 percent down payment and a 90 percent mortgage
from Sidney Bank. Why does Sidney Bank have an insurable interest in Corinne's house?
The bank faces the possibility of a loss if Corinne's house is damaged or destroyed.
All of the following are perils EXCEPT:
texting while driving
theft
, lightning
windstorm
texting while driving
A dump truck collided with a tall oak tree in Marian's front yard. The tree fell onto her house,
breaking a glass picture window and knocking a lamp off the table inside it. Sparks from the
lamp started a fire that destroyed half the house. What is the proximate cause of the damage
to Marian's house?
the collision
All of the following causes of loss are commonly listed as excluded perils in open perils
property insurance policies, EXCEPT:
wear and tear
flood
war
vandalism
vandalism
While a homeowner is out of town, a group of teenagers break into her house, throw a beer
party, and damage the interior without stealing anything. Connie's resulting property
insurance claim will be covered if her policy covers what peril(s)?
vandalism
Laura owns poisonous snakes on her property, which she uses for venom research purposes.
One of the snakes escaped and within hours bit a neighbor who sued Laura. Though Laura
was not negligent in her ownership of the snakes, the plaintiff easily won the suit based on
the doctrine of:
strict (absolute) liability
Which one of the following incidents is an example of vicarious liability?
Rudy is held responsible for an accident caused by his employee.
Dominic is held responsible for food poisoning due to a pizza he delivered.
Edie is held responsible for striking a pedestrian with her bicycle.
Lilly is held responsible for her cat's injury to Lilly's guest.
Rudy is held responsible for an accident caused by his employee.
Bill's children have grown up and moved away, but the tree house that he built for them now
draws other neighborhood children despite his handmade "No Trespassing" sign. If a
with Verified Correct Answers
For purposes of insurance, a "loss" is best defined as:
an unwelcomed, unplanned reduction in economic value
An automatic sprinkler system in a hotel building is a risk reduction measure because it:
reduces the amount of damage that a fire is likely to do
Insuring a new restaurant against business failure is not possible because business success or
failure is:
a speculative risk
Which of the following is an example of pure risk?
the possibility of a business being flooded
Zenith Insurance Company issues a policy to Best Manufacturing Company. A dispute arises
between Zenith and Best on the meaning of an ambiguous clause in their contract. The matter
goes to court, which can be expected to interpret the clause in a manner that:
favors Best Manufacturing
The fact that insurance policy language is written by an insurance company and is
nonnegotiable makes insurance policies:
contracts of adhesion
Which of the following correctly identifies three elements that must be present to create an
enforceable contract?
acceptance, consideration, and offer
Rhonda's parents bought her a car for her sixteenth birthday and made her responsible for
maintaining and insuring it. However, when Rhonda applied for auto insurance after getting
,her driver's license, she was told that she could not enter into a binding insurance contract
because, according to the law in her state, a 16-year-old does not qualify as a(n):
competent party
A fire severely damages Carl's home, making it uninhabitable. He moves his family to a hotel
while the house is repaired. The additional expenses incurs in housing the family are
considered what type of loss?
indirect
Butch's Meat Market loses electrical power during a flood. The business closes for several
days, during which time there is no refrigeration and a large quantity of meat spoils. The loss
of the meat is what type of loss?
consequential
"Replacement cost minus physical depreciation" describes which type of loss valuation
method?
actual cash value
From a property insurance perspective, which of the following is NOT a basic type of
construction?
steel
For an insurer to pay a property insurance claim, when must the policyholder have an
insurable interest in the insured property?
at the time of the loss
Ken's house has an exterior layer of brick that covers wooden walls supported by wooden 2-
by-4 studs. What type of construction does Ken's house have?
masonry veneer
Corinne purchased her home with a 10 percent down payment and a 90 percent mortgage
from Sidney Bank. Why does Sidney Bank have an insurable interest in Corinne's house?
The bank faces the possibility of a loss if Corinne's house is damaged or destroyed.
All of the following are perils EXCEPT:
texting while driving
theft
, lightning
windstorm
texting while driving
A dump truck collided with a tall oak tree in Marian's front yard. The tree fell onto her house,
breaking a glass picture window and knocking a lamp off the table inside it. Sparks from the
lamp started a fire that destroyed half the house. What is the proximate cause of the damage
to Marian's house?
the collision
All of the following causes of loss are commonly listed as excluded perils in open perils
property insurance policies, EXCEPT:
wear and tear
flood
war
vandalism
vandalism
While a homeowner is out of town, a group of teenagers break into her house, throw a beer
party, and damage the interior without stealing anything. Connie's resulting property
insurance claim will be covered if her policy covers what peril(s)?
vandalism
Laura owns poisonous snakes on her property, which she uses for venom research purposes.
One of the snakes escaped and within hours bit a neighbor who sued Laura. Though Laura
was not negligent in her ownership of the snakes, the plaintiff easily won the suit based on
the doctrine of:
strict (absolute) liability
Which one of the following incidents is an example of vicarious liability?
Rudy is held responsible for an accident caused by his employee.
Dominic is held responsible for food poisoning due to a pizza he delivered.
Edie is held responsible for striking a pedestrian with her bicycle.
Lilly is held responsible for her cat's injury to Lilly's guest.
Rudy is held responsible for an accident caused by his employee.
Bill's children have grown up and moved away, but the tree house that he built for them now
draws other neighborhood children despite his handmade "No Trespassing" sign. If a
