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FLORIDA 2-20 AGENTS LICENSE EXAM QUESTIONS AND CORRECT
ANSWERS LATEST UPDATE 2024
The Florida Surplus Service Lines Office (FSLSO) was created to - Answer:
oversee the surplus lines industry in the state
Which of the following is NOT a required qualification for a General Lines Agent:
- Answer: Seeking the license only to write controlled business
The Department of Financial Services performs the following, EXCEPT: -
Answer: Pays insurance claims
Once license, you have how long to obtain an appointment? - Answer: 48 months
Which of the following is NOT a duty of the Office of Insurance Regulation? -
Answer: Submit rate filings and underwriting rules for approval
Which one of the following statements is correct? - Answer: Contractors must
usually provide evidence of liability insurance before a construction contract is
granted.
From a risk management viewpoint, insurance is used to - Answer: Transfer the
cost of losses.
Liability coverage for loss exposures arising from a business organization's
premises and operations, its products, or its completed work is typically provided
by - Answer: Commercial general liability insurance.
Which one of the following statements is correct regarding the benefits provided
by insurance? - Answer: Insurance helps reduce the financial burden to society by
compensating accident victims.
Insurance is not the only risk management transfer technique. When circumstances
are appropriate, transfer can be accomplished through - Answer: Noninsurance
transfer techniques.
Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to
drive it to special events at schools around the country where it will serve as a
mobile billboard to promote his product. Oscar is surprised to learn that insurers
are reluctant to insure his vehicle because it fails to meet one of the ideal
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characteristics of an insurable risk. Which characteristic is Oscar's vehicle least
likely to meet? - Answer: Large number of similar exposure units
Liability coverage to individuals and families for bodily injury and property
damage arising from the insured's personal premises or activities is typically
provided by - Answer: Personal liability insurance.
Sally is a recent college graduate who lives in the suburbs and drives to work daily
in the city. She recognizes that owning a car creates both property damage and
liability exposures for her and at the same time she has the burden of student loans.
For someone in Sally's circumstances the most practical risk management
technique for dealing with her auto-related loss exposures is - Answer: Risk
transfer.
One of the costs of insurance is said to be opportunity costs. This means that if
capital and labor were not being used in the insurance business, they could be used
elsewhere and making other productive contributions to - Answer: Society
Retention is often used in combination with insurance as a way of treating loss
exposures. One of the major downsides of individuals using retention alone is -
Answer: The potential for financial ruin.
The process of restoring an individual or organization to a pre-loss financial
condition is the process of - Answer: Indemnification
Sometimes the existence of insurance encourages losses. The result of this
phenomenon is that it - Answer: Increases the total cost of insurance
A small business owner concerned about something happening and not being able
to work or earn a living for an extended period of time due to an accident should
purchase - Answer: Disability insurance.
Which of the following is/are not a "your covered auto" under a Personal Auto
Policy for Liability? - Answer: The 1990 Chevy 22 days after you purchase it as
an additional vehicle for your son who just got his license.
Joe has a Personal Auto Policy with one car with liability of 10/20/10, basic PIP,
10/20 UM and no Med Pay. His Florida neighbor has an identical policy on her
care. Joe is driving her car, loses control; and hits a tree. Joe is hurt with $15,000 in
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medical bills. What is the maximum Joe can collect from UM from all sources
from this accident? - Answer: $0
Keith commutes into the city in his car, and he provides a ride to two co-workers
who live near him. Every other week, the co-workers take turns buying the
gasoline for Keith's car. Does this activity create a public or livery conveyance
situation that would preclude liability coverage under Keith's Personal Auto Policy
(PAP)? - Answer: No, because Keith is involved in a share-the-expense car pool.
An insured covers his owned auto with more than one Personal Auto Policy (PAP),
each from a different insurer. In the event of a claim for medical payments
coverage, - Answer: Each insurer pays its pro rata share based on the proportion
that its limit of liability bears to the total of applicable limits.
The Insuring Agreement in Part A - Liability Coverage of the Personal Auto Policy
contains descriptions of all of the following EXCEPT: - Answer: Limit of Liability
Tom and Martha insure their house with an unendorsed HO-3—Special Form (HO-
3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost
of the house. A thief breaks into the house while Tom and Martha are on vacation
and steals the following items: •$500 cash•$50,000 stock certificates. Ignoring any
deductible that may apply, how much, if any, will Tom and Martha's insurer pay for
the loss of the items? - Answer: $1,700
Under the HO-3—Special Form (HO-3) Section I—Conditions, the Loss
Settlement condition - Answer: Establishes the process for determining the amount
to be paid for a property loss.
Property described in Coverages A, B, and C of an HO-3—Special Form (HO-3)
that is destroyed, confiscated, or seized by order of any governmental or public
authority is - Answer: Excluded.
Adam and his insurer disagree on the amount of a loss covered by his homeowners
policy. Adam wants the insurer to pay $10,000 toward the loss. The insurer's
representative feels that the loss should be valued at $5,000. How could the
appraisal process resolve this situation? - Answer: Adam and the insurer will each
select an appraiser, and the two appraisers will submit their differences to an
impartial umpire who will reach a resolution.
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Which one of the following has special limits of liability within Coverage C of the
HO-3—Special Form (HO-3)? - Answer: Theft of firearms
A storm causes power lines to break ten miles from the insured's premises. The loss
of electrical power causes food in the insured's freezer to thaw and spoil. Coverage
for this loss is - Answer: Excluded because the power failure occurred off the
residence premises.
If law enforcement officials seize an insured's personal computer to search for files
that might be related to a crime, the insured under an HO-3—Special Form (HO-3)
may be unsuccessful in claiming a theft loss on the computer due to the - Answer:
Governmental Action exclusion.
Sam and Sophia insure their house with an unendorsed HO-3—Special Form (HO-
3) policy. Sam stores a small fishing boat and trailer behind the house. While they
are out for the evening, a fire destroys most of their kitchen and completely
destroys the boat and trailer. Assuming Sam's boat and trailer are valued at $4,000
and ignoring any deductible that may apply, what amount will their HO-3 insurer
pay for the loss of the boat and trailer? - Answer: $1,500
The Florida Valued Policy Law applies to: - Answer: mobile homes
For a Dwelling Flood policy, which is correct: - Answer: Primary residences are
covered at replacement cost on building losses.
Sally insures her house with an unendorsed HO-3—Special Form (HO-3) with a
Coverage A—Dwelling limit of $275,000, which is the replacement cost of the
house. A fire destroys the house including a collection of blueprints belonging to
Sally's employer, valued at $10,000. Sally was storing the blueprints at her home
while her office was changing locations. Assuming no deductible applies, how
much, if any, will Sally's HO-3 insurer pay to replace the blueprints? - Answer: $0
One of the main factors used in developing a base premium for a homeowners
policy is - Answer: The public protection class.
Bert and Maggie insure their house with an unendorsed HO-3—Special Form (HO-
3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost
of the house. A fire destroys their detached garage. The cost to replace the garage is
$35,000. Ignoring any deductible that may apply, how much will Bert and
Maggie's insurer pay to replace the detached garage? - Answer: $30,000
FLORIDA 2-20 AGENTS LICENSE EXAM QUESTIONS AND CORRECT
ANSWERS LATEST UPDATE 2024
The Florida Surplus Service Lines Office (FSLSO) was created to - Answer:
oversee the surplus lines industry in the state
Which of the following is NOT a required qualification for a General Lines Agent:
- Answer: Seeking the license only to write controlled business
The Department of Financial Services performs the following, EXCEPT: -
Answer: Pays insurance claims
Once license, you have how long to obtain an appointment? - Answer: 48 months
Which of the following is NOT a duty of the Office of Insurance Regulation? -
Answer: Submit rate filings and underwriting rules for approval
Which one of the following statements is correct? - Answer: Contractors must
usually provide evidence of liability insurance before a construction contract is
granted.
From a risk management viewpoint, insurance is used to - Answer: Transfer the
cost of losses.
Liability coverage for loss exposures arising from a business organization's
premises and operations, its products, or its completed work is typically provided
by - Answer: Commercial general liability insurance.
Which one of the following statements is correct regarding the benefits provided
by insurance? - Answer: Insurance helps reduce the financial burden to society by
compensating accident victims.
Insurance is not the only risk management transfer technique. When circumstances
are appropriate, transfer can be accomplished through - Answer: Noninsurance
transfer techniques.
Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to
drive it to special events at schools around the country where it will serve as a
mobile billboard to promote his product. Oscar is surprised to learn that insurers
are reluctant to insure his vehicle because it fails to meet one of the ideal
,2|Page
characteristics of an insurable risk. Which characteristic is Oscar's vehicle least
likely to meet? - Answer: Large number of similar exposure units
Liability coverage to individuals and families for bodily injury and property
damage arising from the insured's personal premises or activities is typically
provided by - Answer: Personal liability insurance.
Sally is a recent college graduate who lives in the suburbs and drives to work daily
in the city. She recognizes that owning a car creates both property damage and
liability exposures for her and at the same time she has the burden of student loans.
For someone in Sally's circumstances the most practical risk management
technique for dealing with her auto-related loss exposures is - Answer: Risk
transfer.
One of the costs of insurance is said to be opportunity costs. This means that if
capital and labor were not being used in the insurance business, they could be used
elsewhere and making other productive contributions to - Answer: Society
Retention is often used in combination with insurance as a way of treating loss
exposures. One of the major downsides of individuals using retention alone is -
Answer: The potential for financial ruin.
The process of restoring an individual or organization to a pre-loss financial
condition is the process of - Answer: Indemnification
Sometimes the existence of insurance encourages losses. The result of this
phenomenon is that it - Answer: Increases the total cost of insurance
A small business owner concerned about something happening and not being able
to work or earn a living for an extended period of time due to an accident should
purchase - Answer: Disability insurance.
Which of the following is/are not a "your covered auto" under a Personal Auto
Policy for Liability? - Answer: The 1990 Chevy 22 days after you purchase it as
an additional vehicle for your son who just got his license.
Joe has a Personal Auto Policy with one car with liability of 10/20/10, basic PIP,
10/20 UM and no Med Pay. His Florida neighbor has an identical policy on her
care. Joe is driving her car, loses control; and hits a tree. Joe is hurt with $15,000 in
,3|Page
medical bills. What is the maximum Joe can collect from UM from all sources
from this accident? - Answer: $0
Keith commutes into the city in his car, and he provides a ride to two co-workers
who live near him. Every other week, the co-workers take turns buying the
gasoline for Keith's car. Does this activity create a public or livery conveyance
situation that would preclude liability coverage under Keith's Personal Auto Policy
(PAP)? - Answer: No, because Keith is involved in a share-the-expense car pool.
An insured covers his owned auto with more than one Personal Auto Policy (PAP),
each from a different insurer. In the event of a claim for medical payments
coverage, - Answer: Each insurer pays its pro rata share based on the proportion
that its limit of liability bears to the total of applicable limits.
The Insuring Agreement in Part A - Liability Coverage of the Personal Auto Policy
contains descriptions of all of the following EXCEPT: - Answer: Limit of Liability
Tom and Martha insure their house with an unendorsed HO-3—Special Form (HO-
3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost
of the house. A thief breaks into the house while Tom and Martha are on vacation
and steals the following items: •$500 cash•$50,000 stock certificates. Ignoring any
deductible that may apply, how much, if any, will Tom and Martha's insurer pay for
the loss of the items? - Answer: $1,700
Under the HO-3—Special Form (HO-3) Section I—Conditions, the Loss
Settlement condition - Answer: Establishes the process for determining the amount
to be paid for a property loss.
Property described in Coverages A, B, and C of an HO-3—Special Form (HO-3)
that is destroyed, confiscated, or seized by order of any governmental or public
authority is - Answer: Excluded.
Adam and his insurer disagree on the amount of a loss covered by his homeowners
policy. Adam wants the insurer to pay $10,000 toward the loss. The insurer's
representative feels that the loss should be valued at $5,000. How could the
appraisal process resolve this situation? - Answer: Adam and the insurer will each
select an appraiser, and the two appraisers will submit their differences to an
impartial umpire who will reach a resolution.
, 4|Page
Which one of the following has special limits of liability within Coverage C of the
HO-3—Special Form (HO-3)? - Answer: Theft of firearms
A storm causes power lines to break ten miles from the insured's premises. The loss
of electrical power causes food in the insured's freezer to thaw and spoil. Coverage
for this loss is - Answer: Excluded because the power failure occurred off the
residence premises.
If law enforcement officials seize an insured's personal computer to search for files
that might be related to a crime, the insured under an HO-3—Special Form (HO-3)
may be unsuccessful in claiming a theft loss on the computer due to the - Answer:
Governmental Action exclusion.
Sam and Sophia insure their house with an unendorsed HO-3—Special Form (HO-
3) policy. Sam stores a small fishing boat and trailer behind the house. While they
are out for the evening, a fire destroys most of their kitchen and completely
destroys the boat and trailer. Assuming Sam's boat and trailer are valued at $4,000
and ignoring any deductible that may apply, what amount will their HO-3 insurer
pay for the loss of the boat and trailer? - Answer: $1,500
The Florida Valued Policy Law applies to: - Answer: mobile homes
For a Dwelling Flood policy, which is correct: - Answer: Primary residences are
covered at replacement cost on building losses.
Sally insures her house with an unendorsed HO-3—Special Form (HO-3) with a
Coverage A—Dwelling limit of $275,000, which is the replacement cost of the
house. A fire destroys the house including a collection of blueprints belonging to
Sally's employer, valued at $10,000. Sally was storing the blueprints at her home
while her office was changing locations. Assuming no deductible applies, how
much, if any, will Sally's HO-3 insurer pay to replace the blueprints? - Answer: $0
One of the main factors used in developing a base premium for a homeowners
policy is - Answer: The public protection class.
Bert and Maggie insure their house with an unendorsed HO-3—Special Form (HO-
3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost
of the house. A fire destroys their detached garage. The cost to replace the garage is
$35,000. Ignoring any deductible that may apply, how much will Bert and
Maggie's insurer pay to replace the detached garage? - Answer: $30,000
