FLORIDA 2-20 AGENTS LICENSE FINAL EXAM AND STUDY GUIDE NEWEST ACTUAL EXAM
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.
,FLORIDA 2-20 AGENTS LICENSE FINAL EXAM AND STUDY GUIDE NEWEST ACTUAL EXAM
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 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
,FLORIDA 2-20 AGENTS LICENSE FINAL EXAM AND STUDY GUIDE NEWEST ACTUAL EXAM
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 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
, FLORIDA 2-20 AGENTS LICENSE FINAL EXAM AND STUDY GUIDE NEWEST ACTUAL EXAM
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.
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
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.
,FLORIDA 2-20 AGENTS LICENSE FINAL EXAM AND STUDY GUIDE NEWEST ACTUAL EXAM
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 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
,FLORIDA 2-20 AGENTS LICENSE FINAL EXAM AND STUDY GUIDE NEWEST ACTUAL EXAM
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 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
, FLORIDA 2-20 AGENTS LICENSE FINAL EXAM AND STUDY GUIDE NEWEST ACTUAL EXAM
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.
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
