Florida 2-20 General Lines Practice
Exam 2026 (100 Questions)WITH
CORRECT CORRECT ANSWERS AND
RATIONALE NEW!!
1. Which is an insuring agreement commonly found in a homeowners policy?
A. Ordinance or law
B. Coverage A – Dwelling
C. Increased cost of construction
D. Debris removal
Correct Answer: B
Rationale: Coverage A (Dwelling) is a core insuring agreement; the others are additional
coverages/endorsements or subparts.
2. The “principle of indemnity” means:
A. Insured profits from a loss
B. Insurer pays regardless of value
C. Insured is restored to pre-loss financial condition
D. Claims are paid only in cash
Correct Answer: C
Rationale: Indemnity prevents enrichment and aims to make the insured whole, not better.
3. In Florida, an adjuster’s license is required for a person who:
A. Takes an application only
B. Negotiates claim settlement on behalf of insurer for compensation
C. Prints policy documents
D. Delivers a policy and collects the first premium only
Correct Answer: B
Rationale: Adjusting includes investigating/negotiating/settling claims for compensation.
,4. Actual Cash Value (ACV) is typically:
A. Replacement cost minus depreciation
B. Market value plus depreciation
C. Replacement cost plus depreciation
D. Stated amount minus deductible
Correct Answer: A
Rationale: ACV is commonly RC less depreciation (unless policy defines otherwise).
5. A mortgagee clause primarily protects the:
A. Named insured only
B. Lender’s interest in the property
C. Agent’s commissions
D. Tenant’s personal property
Correct Answer: B
Rationale: Mortgagee clauses protect the lender and can preserve coverage despite insured acts.
6. “Other Insurance” conditions exist to:
A. Prevent double recovery
B. Increase claim payments
C. Void all duplicate coverage
D. Require insurers to pay in full
Correct Answer: A
Rationale: Other insurance provisions coordinate contribution among policies.
7. A policy provision that suspends coverage when a hazard increases substantially is:
A. Liberalization
B. Increased Hazard
C. Appraisal
D. Subrogation
Correct Answer: B
, Rationale: Increased hazard clauses address material changes that raise loss probability.
8. Which is a “direct loss” example?
A. Loss of rent due to fire
B. Theft of a TV
C. Extra expense for relocation
D. Loss of market value after repair
Correct Answer: B
Rationale: Direct loss is physical loss/damage (theft of property). Others are indirect/consequential.
9. The policyholder’s right to transfer claim rights to insurer after payment is:
A. Arbitration
B. Subrogation
C. Assignment
D. Contribution
Correct Answer: B
Rationale: Subrogation allows insurer to pursue responsible third parties.
10. Consideration in an insurance contract includes:
A. Only the premium
B. Only the insurer’s promise
C. Premium + statements in application + insurer’s promise to pay
D. Only the declarations page
Correct Answer: C
Rationale: Consideration is something of value exchanged by both parties.
Property / Homeowners
11. HO-3 provides coverage on the dwelling on what basis?
A. Named perils
B. Open perils (special form), subject to exclusions
C. Flood only
Exam 2026 (100 Questions)WITH
CORRECT CORRECT ANSWERS AND
RATIONALE NEW!!
1. Which is an insuring agreement commonly found in a homeowners policy?
A. Ordinance or law
B. Coverage A – Dwelling
C. Increased cost of construction
D. Debris removal
Correct Answer: B
Rationale: Coverage A (Dwelling) is a core insuring agreement; the others are additional
coverages/endorsements or subparts.
2. The “principle of indemnity” means:
A. Insured profits from a loss
B. Insurer pays regardless of value
C. Insured is restored to pre-loss financial condition
D. Claims are paid only in cash
Correct Answer: C
Rationale: Indemnity prevents enrichment and aims to make the insured whole, not better.
3. In Florida, an adjuster’s license is required for a person who:
A. Takes an application only
B. Negotiates claim settlement on behalf of insurer for compensation
C. Prints policy documents
D. Delivers a policy and collects the first premium only
Correct Answer: B
Rationale: Adjusting includes investigating/negotiating/settling claims for compensation.
,4. Actual Cash Value (ACV) is typically:
A. Replacement cost minus depreciation
B. Market value plus depreciation
C. Replacement cost plus depreciation
D. Stated amount minus deductible
Correct Answer: A
Rationale: ACV is commonly RC less depreciation (unless policy defines otherwise).
5. A mortgagee clause primarily protects the:
A. Named insured only
B. Lender’s interest in the property
C. Agent’s commissions
D. Tenant’s personal property
Correct Answer: B
Rationale: Mortgagee clauses protect the lender and can preserve coverage despite insured acts.
6. “Other Insurance” conditions exist to:
A. Prevent double recovery
B. Increase claim payments
C. Void all duplicate coverage
D. Require insurers to pay in full
Correct Answer: A
Rationale: Other insurance provisions coordinate contribution among policies.
7. A policy provision that suspends coverage when a hazard increases substantially is:
A. Liberalization
B. Increased Hazard
C. Appraisal
D. Subrogation
Correct Answer: B
, Rationale: Increased hazard clauses address material changes that raise loss probability.
8. Which is a “direct loss” example?
A. Loss of rent due to fire
B. Theft of a TV
C. Extra expense for relocation
D. Loss of market value after repair
Correct Answer: B
Rationale: Direct loss is physical loss/damage (theft of property). Others are indirect/consequential.
9. The policyholder’s right to transfer claim rights to insurer after payment is:
A. Arbitration
B. Subrogation
C. Assignment
D. Contribution
Correct Answer: B
Rationale: Subrogation allows insurer to pursue responsible third parties.
10. Consideration in an insurance contract includes:
A. Only the premium
B. Only the insurer’s promise
C. Premium + statements in application + insurer’s promise to pay
D. Only the declarations page
Correct Answer: C
Rationale: Consideration is something of value exchanged by both parties.
Property / Homeowners
11. HO-3 provides coverage on the dwelling on what basis?
A. Named perils
B. Open perils (special form), subject to exclusions
C. Flood only
