Florida 20-44 Personal Lines License Practice Exam
Questions with Correct Verified Answers | 2026-2027
Edition
This comprehensive practice exam is designed to help you prepare for the Florida 20-44
Personal Lines Insurance License Exam. The 20-44 license permits agents to transact personal
lines property and casualty insurance (auto, homeowners, dwelling, personal liability) for
individuals and families for non-commercial purposes . Candidates must complete 60 hours of
pre-licensing education and pass a state exam administered by Pearson VUE consisting of 108
questions . The exam covers Florida Statutes, personal auto policy (PAP), homeowners policies,
dwelling forms, liability coverages, and ethics .
SECTION 1: INSURANCE BASICS & CONCEPTS (Questions 1-100)
Question 1: An insurance policy is a "Contract of Adhesion" because:
A. Both parties negotiate the terms equally
B. One party draws up the contract and the other must accept it as written
C. It is based on an exchange of unequal values
D. It depends on the occurrence of an uncertain event
Correct Answer: B
Rationale: A contract of adhesion is a "take-it-or-leave-it" contract. The insurer prepares the
policy language, and the insured has little or no ability to negotiate the terms. Ambiguities in
the contract are interpreted in favor of the insured .
Question 2: Which of the following is a requirement for a valid insurance contract?
A. Profit motive
B. Written format only
,C. Legal purpose
D. Notary public signature
Correct Answer: C
Rationale: For a contract to be enforceable, it must have a legal purpose. Contracts for illegal
acts are void. Other required elements include offer and acceptance, consideration, and
competent parties .
Question 3: What is a moral hazard?
A. Leaving the front door unlocked
B. An oily rag left near a furnace
C. An insured intentionally setting fire to their house to collect insurance
D. A lightning strike during a thunderstorm
Correct Answer: C
Rationale: Moral hazard refers to the tendency of individuals to act dishonestly or with a lack of
integrity because they have insurance coverage. Intentionally causing a loss is a moral hazard.
Physical hazards include unlocked doors or oily rags. Pure perils are unexpected events like
lightning .
Question 4: In Florida, an agent's license is considered:
A. A right granted to any citizen
B. A permanent appointment regardless of activity
C. A privilege granted by the state
D. Valid only for 12 months
, Correct Answer: C
Rationale: An insurance license is a privilege, not a right, and is subject to state regulations,
including continuing education and ethical conduct .
Question 5: If an insurance agent makes a false statement about a competitor's financial
condition, they are guilty of:
A. Churning
B. Twisting
C. Defamation
D. Coercion
Correct Answer: C
Rationale: Defamation involves making false or maliciously critical statements regarding the
financial condition of an insurer or the reputation of an agent to injure them .
Question 6: An agent who collects premiums and fails to remit them to the insurer has
committed:
A. Coercion
B. Misrepresentation
C. Breach of Fiduciary Duty
D. Sliding
Correct Answer: C
Questions with Correct Verified Answers | 2026-2027
Edition
This comprehensive practice exam is designed to help you prepare for the Florida 20-44
Personal Lines Insurance License Exam. The 20-44 license permits agents to transact personal
lines property and casualty insurance (auto, homeowners, dwelling, personal liability) for
individuals and families for non-commercial purposes . Candidates must complete 60 hours of
pre-licensing education and pass a state exam administered by Pearson VUE consisting of 108
questions . The exam covers Florida Statutes, personal auto policy (PAP), homeowners policies,
dwelling forms, liability coverages, and ethics .
SECTION 1: INSURANCE BASICS & CONCEPTS (Questions 1-100)
Question 1: An insurance policy is a "Contract of Adhesion" because:
A. Both parties negotiate the terms equally
B. One party draws up the contract and the other must accept it as written
C. It is based on an exchange of unequal values
D. It depends on the occurrence of an uncertain event
Correct Answer: B
Rationale: A contract of adhesion is a "take-it-or-leave-it" contract. The insurer prepares the
policy language, and the insured has little or no ability to negotiate the terms. Ambiguities in
the contract are interpreted in favor of the insured .
Question 2: Which of the following is a requirement for a valid insurance contract?
A. Profit motive
B. Written format only
,C. Legal purpose
D. Notary public signature
Correct Answer: C
Rationale: For a contract to be enforceable, it must have a legal purpose. Contracts for illegal
acts are void. Other required elements include offer and acceptance, consideration, and
competent parties .
Question 3: What is a moral hazard?
A. Leaving the front door unlocked
B. An oily rag left near a furnace
C. An insured intentionally setting fire to their house to collect insurance
D. A lightning strike during a thunderstorm
Correct Answer: C
Rationale: Moral hazard refers to the tendency of individuals to act dishonestly or with a lack of
integrity because they have insurance coverage. Intentionally causing a loss is a moral hazard.
Physical hazards include unlocked doors or oily rags. Pure perils are unexpected events like
lightning .
Question 4: In Florida, an agent's license is considered:
A. A right granted to any citizen
B. A permanent appointment regardless of activity
C. A privilege granted by the state
D. Valid only for 12 months
, Correct Answer: C
Rationale: An insurance license is a privilege, not a right, and is subject to state regulations,
including continuing education and ethical conduct .
Question 5: If an insurance agent makes a false statement about a competitor's financial
condition, they are guilty of:
A. Churning
B. Twisting
C. Defamation
D. Coercion
Correct Answer: C
Rationale: Defamation involves making false or maliciously critical statements regarding the
financial condition of an insurer or the reputation of an agent to injure them .
Question 6: An agent who collects premiums and fails to remit them to the insurer has
committed:
A. Coercion
B. Misrepresentation
C. Breach of Fiduciary Duty
D. Sliding
Correct Answer: C
