Florida 2-20 Agents License Exam Test Bank |
Comprehensive Practice Exam with Verified
Questions, Correct Answers and Detailed
Rationales | Latest Update 2026/2027 Edition –
Already Graded A+
Question 1
All of the following are exclusions under Garage Insurance Physical Damage
coverage EXCEPT:
A. Miscellaneous Type Vehicle
B. A clothing store
C. Expected losses
D. Off premises sign coverage up to $2,500
Answer: D
Rationale: Off premises sign coverage up to $2,500 is NOT an exclusion; it is a
coverage extension. Garage Insurance Physical Damage coverage typically
excludes miscellaneous type vehicles, expected losses, and certain types of
businesses. Off-premises sign coverage is an additional coverage that protects
signs located away from the insured premises.
Question 2
Which statement is true concerning auto Physical Damage coverage in a Personal
Auto Policy?
A. It covers liability for nonowned autos but not owned autos
B. It is mandatory for all drivers in Florida regardless of fault
C. It only covers vehicles owned by the insured
D. It can cover both an owned and nonowned auto
Answer: D
Rationale: Auto Physical Damage coverage in a Personal Auto Policy can cover
both owned and nonowned autos. Physical damage coverage includes collision and
other-than-collision (comprehensive) coverage. It is not mandatory and covers both
owned and nonowned vehicles, depending on the policy's coverage.
pg. 1
,Question 3
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?
A. The backhoe is property owned and is excluded
B. Limit of Liability
C. 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
D. A volunteer worker of the named insured
Answer: C
Rationale: When the insured and insurer disagree on the amount of a loss, the
appraisal clause allows each party to select its own appraiser. The two appraisers
then select an umpire to resolve any disagreements. This provides a mechanism for
resolving valuation disputes without litigation.
Question 4
Personal Inland Marine coverages are generally rated based on a rate per _____
dollars, varying by class:
A. 1000
B. 100
C. 500
D. 50
Answer: B
Rationale: Personal Inland Marine coverages are generally rated based on a rate
per $100 of coverage, varying by class. This rating method allows for premium
calculation based on the value of the property insured and the risk classification of
the item.
Question 5
A Commercial Package Policy (CPP) premium may be modified by a package
modification factor. This factor:
A. Is a penalty assessed for the insured's poor loss history
B. Is a mandatory tax levied by the state government
pg. 2
,C. Is a discount justified by the greater efficiency in providing a package policy
D. Is a fixed percentage increase applied to all policies regardless of risk
Answer: C
Rationale: A Commercial Package Policy (CPP) premium may be modified by a
package modification factor, which is a discount justified by the greater efficiency
in providing a package policy. Combining multiple coverages into one policy
reduces administrative costs for the insurer, and this savings is passed on to the
insured.
Question 6
The Florida Comprehensive Hurricane Damage Mitigation Program was
established within the:
A. Transfer the cost of losses
B. Conditionally Renewable
C. Department of Financial Services
D. The potential for financial ruin
Answer: C
Rationale: The Florida Comprehensive Hurricane Damage Mitigation Program
was established within the Department of Financial Services. This program focuses
on hurricane mitigation efforts, including inspections, mitigation discounts, and
public education about hurricane preparedness.
Question 7
All of the following are deductibles for FAJUA Physical Damage Coverage
EXCEPT:
A. 2,500
B. 750
C. Corporations
D. Fraud
Answer: D
Rationale: Fraud is NOT a deductible for FAJUA Physical Damage Coverage.
FAJUA (Florida Automobile Joint Underwriting Association) offers physical
damage coverage with deductibles of $2,500 and $750. Corporations may have
different deductibles, but fraud is not a deductible option.
pg. 3
, Question 8
Which one of the following is a type of covered property under employee theft
coverage?
A. Fixtures
B. Apartment Building
C. Cash
D. Securities
Answer: D
Rationale: Securities are a type of covered property under employee theft
coverage. Employee theft coverage protects against loss of money, securities, and
other property caused by dishonest acts of employees. Cash, securities, and other
business property are all covered under employee theft coverage.
Question 9
Tier 1 rates are set at _____ above comparable voluntary market rates:
A. 15 percent
B. 10 percent
C. 50 percent
D. 25 percent
Answer: D
Rationale: Tier 1 rates are set at 25% above comparable voluntary market rates.
This applies to employers who are unable to secure workers' compensation
coverage in the voluntary market due to high-risk nature of their work.
Question 10
Which one of the following is an example of injury or damage arising from an
occurrence that would be covered by the products and completed operations
liability portion of the Commercial General Liability (CGL) Coverage Form?
A. A defective gas range manufactured by the insured is stolen from the premises
B. A defective gas range manufactured by the insured causes a fire that damages
the insured's own building
C. A defective gas range manufactured by the insured explodes causing injury
D. A defective gas range manufactured by the insured is recalled by the
manufacturer
Answer: C
pg. 4
Comprehensive Practice Exam with Verified
Questions, Correct Answers and Detailed
Rationales | Latest Update 2026/2027 Edition –
Already Graded A+
Question 1
All of the following are exclusions under Garage Insurance Physical Damage
coverage EXCEPT:
A. Miscellaneous Type Vehicle
B. A clothing store
C. Expected losses
D. Off premises sign coverage up to $2,500
Answer: D
Rationale: Off premises sign coverage up to $2,500 is NOT an exclusion; it is a
coverage extension. Garage Insurance Physical Damage coverage typically
excludes miscellaneous type vehicles, expected losses, and certain types of
businesses. Off-premises sign coverage is an additional coverage that protects
signs located away from the insured premises.
Question 2
Which statement is true concerning auto Physical Damage coverage in a Personal
Auto Policy?
A. It covers liability for nonowned autos but not owned autos
B. It is mandatory for all drivers in Florida regardless of fault
C. It only covers vehicles owned by the insured
D. It can cover both an owned and nonowned auto
Answer: D
Rationale: Auto Physical Damage coverage in a Personal Auto Policy can cover
both owned and nonowned autos. Physical damage coverage includes collision and
other-than-collision (comprehensive) coverage. It is not mandatory and covers both
owned and nonowned vehicles, depending on the policy's coverage.
pg. 1
,Question 3
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?
A. The backhoe is property owned and is excluded
B. Limit of Liability
C. 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
D. A volunteer worker of the named insured
Answer: C
Rationale: When the insured and insurer disagree on the amount of a loss, the
appraisal clause allows each party to select its own appraiser. The two appraisers
then select an umpire to resolve any disagreements. This provides a mechanism for
resolving valuation disputes without litigation.
Question 4
Personal Inland Marine coverages are generally rated based on a rate per _____
dollars, varying by class:
A. 1000
B. 100
C. 500
D. 50
Answer: B
Rationale: Personal Inland Marine coverages are generally rated based on a rate
per $100 of coverage, varying by class. This rating method allows for premium
calculation based on the value of the property insured and the risk classification of
the item.
Question 5
A Commercial Package Policy (CPP) premium may be modified by a package
modification factor. This factor:
A. Is a penalty assessed for the insured's poor loss history
B. Is a mandatory tax levied by the state government
pg. 2
,C. Is a discount justified by the greater efficiency in providing a package policy
D. Is a fixed percentage increase applied to all policies regardless of risk
Answer: C
Rationale: A Commercial Package Policy (CPP) premium may be modified by a
package modification factor, which is a discount justified by the greater efficiency
in providing a package policy. Combining multiple coverages into one policy
reduces administrative costs for the insurer, and this savings is passed on to the
insured.
Question 6
The Florida Comprehensive Hurricane Damage Mitigation Program was
established within the:
A. Transfer the cost of losses
B. Conditionally Renewable
C. Department of Financial Services
D. The potential for financial ruin
Answer: C
Rationale: The Florida Comprehensive Hurricane Damage Mitigation Program
was established within the Department of Financial Services. This program focuses
on hurricane mitigation efforts, including inspections, mitigation discounts, and
public education about hurricane preparedness.
Question 7
All of the following are deductibles for FAJUA Physical Damage Coverage
EXCEPT:
A. 2,500
B. 750
C. Corporations
D. Fraud
Answer: D
Rationale: Fraud is NOT a deductible for FAJUA Physical Damage Coverage.
FAJUA (Florida Automobile Joint Underwriting Association) offers physical
damage coverage with deductibles of $2,500 and $750. Corporations may have
different deductibles, but fraud is not a deductible option.
pg. 3
, Question 8
Which one of the following is a type of covered property under employee theft
coverage?
A. Fixtures
B. Apartment Building
C. Cash
D. Securities
Answer: D
Rationale: Securities are a type of covered property under employee theft
coverage. Employee theft coverage protects against loss of money, securities, and
other property caused by dishonest acts of employees. Cash, securities, and other
business property are all covered under employee theft coverage.
Question 9
Tier 1 rates are set at _____ above comparable voluntary market rates:
A. 15 percent
B. 10 percent
C. 50 percent
D. 25 percent
Answer: D
Rationale: Tier 1 rates are set at 25% above comparable voluntary market rates.
This applies to employers who are unable to secure workers' compensation
coverage in the voluntary market due to high-risk nature of their work.
Question 10
Which one of the following is an example of injury or damage arising from an
occurrence that would be covered by the products and completed operations
liability portion of the Commercial General Liability (CGL) Coverage Form?
A. A defective gas range manufactured by the insured is stolen from the premises
B. A defective gas range manufactured by the insured causes a fire that damages
the insured's own building
C. A defective gas range manufactured by the insured explodes causing injury
D. A defective gas range manufactured by the insured is recalled by the
manufacturer
Answer: C
pg. 4
