Florida Insurance Adjuster Exam Prep – Real Practice
Questions, Answers & Detailed Rationales (Updated 2026)
| Florida Insurance Laws & Regulations, Property &
Casualty Claims Handling, Policy Interpretation &
Coverage Analysis, Claims Investigation & Documentation,
Loss Estimation & Settlement Negotiation, Ethics & Fraud
Prevention, Insurance Contracts, Adjuster Responsibilities
& Real-World Claims Scenarios
Question 1: Which of the following best defines "proximate cause" in property
insurance claims adjusting?
A. The most recent event that occurred before a loss
B. The dominant, efficient cause that sets in motion a chain of events leading to a loss
C. Any contributing factor that played a minor role in causing damage
D. The cause that is most easily proven in court
CORRECT ANSWER: B. The dominant, efficient cause that sets in motion a chain of
events leading to a loss
Rationale: Proximate cause is a fundamental principle in insurance adjusting that
identifies the primary, efficient cause of a loss—the one that naturally and directly
produces the result without intervention of an independent force. Understanding
proximate cause is essential for determining coverage, especially when multiple perils
contribute to a loss. Florida adjusters must apply this concept to evaluate whether a
covered peril initiated the loss sequence under policy terms.
Question 2: Under Florida law, what is the maximum time an insurer has to
acknowledge receipt of a written claim communication?
A. 5 business days
B. 10 business days
C. 14 calendar days
D. 30 calendar days
CORRECT ANSWER: C. 14 calendar days
Rationale: Florida Statute § 627.70131 requires insurers to acknowledge receipt of
written claim communications within 14 calendar days. This statutory requirement
ensures timely communication between insurers and claimants and is a critical
compliance point for adjusters handling claims in Florida. Failure to meet this deadline
may result in regulatory penalties.
Question 3: Which homeowners policy form provides "special form" coverage for
the dwelling and "broad form" coverage for personal property?
A. HO-2
B. HO-3
C. HO-4
D. HO-5
,CORRECT ANSWER: B. HO-3
Rationale: The HO-3 policy is the most common homeowners form, providing "special
form" (open perils) coverage for the dwelling and other structures, while personal
property is covered on a "broad form" (named perils) basis. Adjusters must understand
these distinctions to properly evaluate coverage for dwelling versus contents claims
under Florida homeowners policies.
Question 4: What is the primary purpose of the Florida Insurance Guaranty
Association (FIGA)?
A. To regulate insurance premium rates across the state
B. To provide a safety net for policyholders when an admitted insurer becomes insolvent
C. To offer discounted insurance policies to high-risk property owners
D. To mediate disputes between public adjusters and insurers
CORRECT ANSWER: B. To provide a safety net for policyholders when an admitted
insurer becomes insolvent
Rationale: FIGA is a statutory mechanism designed to protect policyholders by paying
covered claims when an admitted insurer is declared insolvent. Florida adjusters must
understand FIGA's role, coverage limits, and procedures to properly advise claimants
and handle claims involving insolvent carriers in compliance with Florida law.
Question 5: In Florida, which of the following is NOT a required coverage under the
Personal Auto Policy (PAP) for liability protection?
A. Bodily Injury Liability
B. Property Damage Liability
C. Personal Injury Protection (PIP)
D. Uninsured Motorist Coverage
CORRECT ANSWER: D. Uninsured Motorist Coverage
Rationale: Florida law requires Bodily Injury Liability (for certain drivers), Property
Damage Liability, and Personal Injury Protection (PIP) under the no-fault system.
Uninsured Motorist Coverage is optional, though highly recommended. Adjusters must
verify which coverages apply to a claim based on the insured's policy selections and
statutory minimums.
Question 6: Which type of hazard refers to a condition of carelessness or
indifference that increases the likelihood of a loss?
A. Physical hazard
B. Moral hazard
C. Morale hazard
D. Legal hazard
CORRECT ANSWER: C. Morale hazard
,Rationale: Morale hazard describes an attitude of indifference toward loss because
insurance exists, potentially leading to careless behavior. This differs from moral hazard
(intentional fraud) and physical hazard (tangible conditions). Adjusters assess morale
hazard when evaluating claim circumstances and potential coverage issues under
Florida insurance contracts.
Question 7: Under a Florida DP-3 dwelling policy, how is personal property typically
valued in the event of a total loss?
A. Replacement cost without deduction for depreciation
B. Actual cash value (replacement cost minus depreciation)
C. Agreed value as stated in the policy declarations
D. Market value at the time of loss
CORRECT ANSWER: B. Actual cash value (replacement cost minus depreciation)
Rationale: The DP-3 policy provides replacement cost coverage for the dwelling but
typically covers personal property on an actual cash value basis unless a specific
endorsement is added. Adjusters must apply the correct valuation method per policy
terms to calculate settlements accurately and comply with Florida insurance
regulations.
Question 8: What does the "80% coinsurance clause" in a property insurance policy
require?
A. The insured must carry coverage equal to at least 80% of the property's replacement
value to receive full reimbursement for a partial loss
B. The insurer will pay only 80% of any claim regardless of coverage limits
C. The insured is responsible for 20% of every claim as a deductible
D. Coverage automatically increases by 80% after a loss occurs
CORRECT ANSWER: A. The insured must carry coverage equal to at least 80% of the
property's replacement value to receive full reimbursement for a partial loss
Rationale: The coinsurance clause incentivizes adequate insurance to value. If coverage
is less than 80% of replacement cost, the insured becomes a co-insurer for partial
losses, receiving only a proportional payment. Florida adjusters must calculate
coinsurance penalties accurately to ensure compliant claim settlements.
Question 9: Which Florida statute governs the mediation of property insurance
claims?
A. § 627.428
B. § 627.7015
C. § 626.854
D. § 624.155
CORRECT ANSWER: B. § 627.7015
, Rationale: Florida Statute § 627.7015 establishes the procedure for mediation of
residential property insurance claims, providing an alternative dispute resolution
mechanism before litigation. Adjusters must be familiar with this statute to properly
advise insureds and comply with state-mandated claims handling processes.
Question 10: In liability insurance, what does "supplementary payments" typically
cover?
A. Medical expenses for injured third parties regardless of fault
B. Costs such as bail bonds, appeal bonds, and prejudgment interest incurred by the
insurer in defending a claim
C. Additional coverage limits purchased by the insured
D. Payments made to the insured for lost wages during claim investigation
CORRECT ANSWER: B. Costs such as bail bonds, appeal bonds, and prejudgment
interest incurred by the insurer in defending a claim
Rationale: Supplementary payments are expenses the insurer agrees to pay in addition
to policy limits, including defense costs, bonds, and interest. These payments do not
erode the policy's liability limits. Florida adjusters must track supplementary payments
separately to ensure accurate reserve setting and settlement calculations.
Question 11: Which of the following is a characteristic of an aleatory contract, such
as an insurance policy?
A. Both parties exchange equal values at the time of contract formation
B. Performance by one party depends on an uncertain event
C. The contract can be canceled by either party at any time without cause
D. All terms must be negotiated individually for each insured
CORRECT ANSWER: B. Performance by one party depends on an uncertain event
Rationale: An aleatory contract involves unequal exchange of value contingent on an
uncertain event—such as a loss occurring. The insurer pays only if a covered loss
happens, while the insured pays premiums regardless. This principle underpins all
insurance contracts and is essential knowledge for Florida adjusters evaluating policy
obligations.
Question 12: Under Florida law, what is the statutory time limit for an insurer to pay
or deny a claim after receiving proof of loss?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
CORRECT ANSWER: C. 90 days
Rationale: Florida Statute § 627.70131 requires insurers to pay or deny a claim within 90
days after receiving proof of loss, unless there are reasonable grounds for delay. This
Questions, Answers & Detailed Rationales (Updated 2026)
| Florida Insurance Laws & Regulations, Property &
Casualty Claims Handling, Policy Interpretation &
Coverage Analysis, Claims Investigation & Documentation,
Loss Estimation & Settlement Negotiation, Ethics & Fraud
Prevention, Insurance Contracts, Adjuster Responsibilities
& Real-World Claims Scenarios
Question 1: Which of the following best defines "proximate cause" in property
insurance claims adjusting?
A. The most recent event that occurred before a loss
B. The dominant, efficient cause that sets in motion a chain of events leading to a loss
C. Any contributing factor that played a minor role in causing damage
D. The cause that is most easily proven in court
CORRECT ANSWER: B. The dominant, efficient cause that sets in motion a chain of
events leading to a loss
Rationale: Proximate cause is a fundamental principle in insurance adjusting that
identifies the primary, efficient cause of a loss—the one that naturally and directly
produces the result without intervention of an independent force. Understanding
proximate cause is essential for determining coverage, especially when multiple perils
contribute to a loss. Florida adjusters must apply this concept to evaluate whether a
covered peril initiated the loss sequence under policy terms.
Question 2: Under Florida law, what is the maximum time an insurer has to
acknowledge receipt of a written claim communication?
A. 5 business days
B. 10 business days
C. 14 calendar days
D. 30 calendar days
CORRECT ANSWER: C. 14 calendar days
Rationale: Florida Statute § 627.70131 requires insurers to acknowledge receipt of
written claim communications within 14 calendar days. This statutory requirement
ensures timely communication between insurers and claimants and is a critical
compliance point for adjusters handling claims in Florida. Failure to meet this deadline
may result in regulatory penalties.
Question 3: Which homeowners policy form provides "special form" coverage for
the dwelling and "broad form" coverage for personal property?
A. HO-2
B. HO-3
C. HO-4
D. HO-5
,CORRECT ANSWER: B. HO-3
Rationale: The HO-3 policy is the most common homeowners form, providing "special
form" (open perils) coverage for the dwelling and other structures, while personal
property is covered on a "broad form" (named perils) basis. Adjusters must understand
these distinctions to properly evaluate coverage for dwelling versus contents claims
under Florida homeowners policies.
Question 4: What is the primary purpose of the Florida Insurance Guaranty
Association (FIGA)?
A. To regulate insurance premium rates across the state
B. To provide a safety net for policyholders when an admitted insurer becomes insolvent
C. To offer discounted insurance policies to high-risk property owners
D. To mediate disputes between public adjusters and insurers
CORRECT ANSWER: B. To provide a safety net for policyholders when an admitted
insurer becomes insolvent
Rationale: FIGA is a statutory mechanism designed to protect policyholders by paying
covered claims when an admitted insurer is declared insolvent. Florida adjusters must
understand FIGA's role, coverage limits, and procedures to properly advise claimants
and handle claims involving insolvent carriers in compliance with Florida law.
Question 5: In Florida, which of the following is NOT a required coverage under the
Personal Auto Policy (PAP) for liability protection?
A. Bodily Injury Liability
B. Property Damage Liability
C. Personal Injury Protection (PIP)
D. Uninsured Motorist Coverage
CORRECT ANSWER: D. Uninsured Motorist Coverage
Rationale: Florida law requires Bodily Injury Liability (for certain drivers), Property
Damage Liability, and Personal Injury Protection (PIP) under the no-fault system.
Uninsured Motorist Coverage is optional, though highly recommended. Adjusters must
verify which coverages apply to a claim based on the insured's policy selections and
statutory minimums.
Question 6: Which type of hazard refers to a condition of carelessness or
indifference that increases the likelihood of a loss?
A. Physical hazard
B. Moral hazard
C. Morale hazard
D. Legal hazard
CORRECT ANSWER: C. Morale hazard
,Rationale: Morale hazard describes an attitude of indifference toward loss because
insurance exists, potentially leading to careless behavior. This differs from moral hazard
(intentional fraud) and physical hazard (tangible conditions). Adjusters assess morale
hazard when evaluating claim circumstances and potential coverage issues under
Florida insurance contracts.
Question 7: Under a Florida DP-3 dwelling policy, how is personal property typically
valued in the event of a total loss?
A. Replacement cost without deduction for depreciation
B. Actual cash value (replacement cost minus depreciation)
C. Agreed value as stated in the policy declarations
D. Market value at the time of loss
CORRECT ANSWER: B. Actual cash value (replacement cost minus depreciation)
Rationale: The DP-3 policy provides replacement cost coverage for the dwelling but
typically covers personal property on an actual cash value basis unless a specific
endorsement is added. Adjusters must apply the correct valuation method per policy
terms to calculate settlements accurately and comply with Florida insurance
regulations.
Question 8: What does the "80% coinsurance clause" in a property insurance policy
require?
A. The insured must carry coverage equal to at least 80% of the property's replacement
value to receive full reimbursement for a partial loss
B. The insurer will pay only 80% of any claim regardless of coverage limits
C. The insured is responsible for 20% of every claim as a deductible
D. Coverage automatically increases by 80% after a loss occurs
CORRECT ANSWER: A. The insured must carry coverage equal to at least 80% of the
property's replacement value to receive full reimbursement for a partial loss
Rationale: The coinsurance clause incentivizes adequate insurance to value. If coverage
is less than 80% of replacement cost, the insured becomes a co-insurer for partial
losses, receiving only a proportional payment. Florida adjusters must calculate
coinsurance penalties accurately to ensure compliant claim settlements.
Question 9: Which Florida statute governs the mediation of property insurance
claims?
A. § 627.428
B. § 627.7015
C. § 626.854
D. § 624.155
CORRECT ANSWER: B. § 627.7015
, Rationale: Florida Statute § 627.7015 establishes the procedure for mediation of
residential property insurance claims, providing an alternative dispute resolution
mechanism before litigation. Adjusters must be familiar with this statute to properly
advise insureds and comply with state-mandated claims handling processes.
Question 10: In liability insurance, what does "supplementary payments" typically
cover?
A. Medical expenses for injured third parties regardless of fault
B. Costs such as bail bonds, appeal bonds, and prejudgment interest incurred by the
insurer in defending a claim
C. Additional coverage limits purchased by the insured
D. Payments made to the insured for lost wages during claim investigation
CORRECT ANSWER: B. Costs such as bail bonds, appeal bonds, and prejudgment
interest incurred by the insurer in defending a claim
Rationale: Supplementary payments are expenses the insurer agrees to pay in addition
to policy limits, including defense costs, bonds, and interest. These payments do not
erode the policy's liability limits. Florida adjusters must track supplementary payments
separately to ensure accurate reserve setting and settlement calculations.
Question 11: Which of the following is a characteristic of an aleatory contract, such
as an insurance policy?
A. Both parties exchange equal values at the time of contract formation
B. Performance by one party depends on an uncertain event
C. The contract can be canceled by either party at any time without cause
D. All terms must be negotiated individually for each insured
CORRECT ANSWER: B. Performance by one party depends on an uncertain event
Rationale: An aleatory contract involves unequal exchange of value contingent on an
uncertain event—such as a loss occurring. The insurer pays only if a covered loss
happens, while the insured pays premiums regardless. This principle underpins all
insurance contracts and is essential knowledge for Florida adjusters evaluating policy
obligations.
Question 12: Under Florida law, what is the statutory time limit for an insurer to pay
or deny a claim after receiving proof of loss?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
CORRECT ANSWER: C. 90 days
Rationale: Florida Statute § 627.70131 requires insurers to pay or deny a claim within 90
days after receiving proof of loss, unless there are reasonable grounds for delay. This
