Florida Personal Lines Final Exam
Questions and Answers
1.Statements made in the application are considered:
A. Warranties
B. Representations
C. Possible Concealments
D. None of the Above
Answer: B. Representations
2.The definition of Risk is:
A. Uncertainty regarding loss
B. A chance of gain
C. Uncertainty regarding gain or profit
D. Intended unfor-seen damage to property for gain or profit
Answer: A. Uncertainty regarding loss
3.A financial device for transferring or shifting risk from an individual or
entity to a large group with the same risk is the definition of:
A. Avoidance
B. Retention
C. Transfer
D. Insurance
Answer: D. Insurance
,4.Hazards include which of the following:
1. Unintended oily rags stacked in a corner
2. A homeowner's carelessness because he has insurance
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 or 2
Answer: C. Both 1 & 2
5.The mortgage condition in a property policy:
1. Guarantees that the lending institutions may act for itself in paying
a premium
2. Guarantees claim payments will be divided as the interests of the
insurance and mortgagee appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2
Answer: C. Both 1 & 2
6.Which of the following situations does NOT create an insurable interest?
A. Being named in someone's will as an heir
B. Holding a mortgage or lien on property
,C. Having custody or control of someone else's property
D. Owning property
Answer: A. Being named in someone's will as an heir
7.The plumbing in Mrs. Ward's home suddenly burst and the ceilings were
damaged by water. Which of the following homeowner forms would cover
the loss?
A. HO1
B. HO2
C. HO4
D. HO7`
Answer: B. HO2
8.Nicole has a Personal Auto policy with limits of 10/20/10 for liability cover-
age. She causes an accident that results in $12,000 bodily injury damages
to the other driver and $5,000 in property damage to the other driver's car.
How much would Nicole's policy pay for the BI and PD losses?
A. $15,000
B. $17,000
C. $10,000
D. $12,000
Answer: A. $15,000
9.Sally Smith calls her agent, Hubert Dufus, to purchase flood insurance.
, Agent Dufus explains to Ms. Smith that flood coverage can be purchased di-
rectly through the NFIP or through him. Should Ms. Smith choose to
purchase coverage through Agent Dufus it is called the:
A. Write your own program
B. Create flood insurance program
C. Flood insurance is not available through private insurers
D. None of the Above
Answer: A. Write your own program
10.The law of large numbers state that the larger...
A. The number of insured, the more likely they will have losses
B. A company, the more profit it will make
C. The chance of loss, the higher the premium
D. The number of insureds, the easier it is to estimate their losses
Answer: D. The number of insureds, the easier it is to estimate their
losses
11.A sudden, unintended, and unexpected event is known as:
A. Negligence
B. Warranty
C. Accident
D. Occurrence
Answer: C. Accident
Questions and Answers
1.Statements made in the application are considered:
A. Warranties
B. Representations
C. Possible Concealments
D. None of the Above
Answer: B. Representations
2.The definition of Risk is:
A. Uncertainty regarding loss
B. A chance of gain
C. Uncertainty regarding gain or profit
D. Intended unfor-seen damage to property for gain or profit
Answer: A. Uncertainty regarding loss
3.A financial device for transferring or shifting risk from an individual or
entity to a large group with the same risk is the definition of:
A. Avoidance
B. Retention
C. Transfer
D. Insurance
Answer: D. Insurance
,4.Hazards include which of the following:
1. Unintended oily rags stacked in a corner
2. A homeowner's carelessness because he has insurance
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 or 2
Answer: C. Both 1 & 2
5.The mortgage condition in a property policy:
1. Guarantees that the lending institutions may act for itself in paying
a premium
2. Guarantees claim payments will be divided as the interests of the
insurance and mortgagee appear
A. 1 only
B. 2 only
C. Both 1 & 2
D. Neither 1 nor 2
Answer: C. Both 1 & 2
6.Which of the following situations does NOT create an insurable interest?
A. Being named in someone's will as an heir
B. Holding a mortgage or lien on property
,C. Having custody or control of someone else's property
D. Owning property
Answer: A. Being named in someone's will as an heir
7.The plumbing in Mrs. Ward's home suddenly burst and the ceilings were
damaged by water. Which of the following homeowner forms would cover
the loss?
A. HO1
B. HO2
C. HO4
D. HO7`
Answer: B. HO2
8.Nicole has a Personal Auto policy with limits of 10/20/10 for liability cover-
age. She causes an accident that results in $12,000 bodily injury damages
to the other driver and $5,000 in property damage to the other driver's car.
How much would Nicole's policy pay for the BI and PD losses?
A. $15,000
B. $17,000
C. $10,000
D. $12,000
Answer: A. $15,000
9.Sally Smith calls her agent, Hubert Dufus, to purchase flood insurance.
, Agent Dufus explains to Ms. Smith that flood coverage can be purchased di-
rectly through the NFIP or through him. Should Ms. Smith choose to
purchase coverage through Agent Dufus it is called the:
A. Write your own program
B. Create flood insurance program
C. Flood insurance is not available through private insurers
D. None of the Above
Answer: A. Write your own program
10.The law of large numbers state that the larger...
A. The number of insured, the more likely they will have losses
B. A company, the more profit it will make
C. The chance of loss, the higher the premium
D. The number of insureds, the easier it is to estimate their losses
Answer: D. The number of insureds, the easier it is to estimate their
losses
11.A sudden, unintended, and unexpected event is known as:
A. Negligence
B. Warranty
C. Accident
D. Occurrence
Answer: C. Accident
