Florida Adjuster Exam Questions with correct Answers 2023

Florida Adjuster Exam Questions with correct Answers What is Insurance? - Answer - A financial tool that protects people from their losses. Transfers risk from one party to another: 1. Insured (people) purchases an insurance policy 2. Insurer provides financial protection to the insured How does Insurance work? - Answer - 1. Insured pays a premium 2. Insurer promises to pay for specified losses if they occur 3. Insurer's promise gives peace of mind to insured Spreading Risk (How Insurance works) - Answer - 1. Collected premiums (from ALL insured) go into a pool called a "reserve" 2. Policyholder can file a claim for covered losses 3. After filing a claim, the insured becomes a claimant 4. Insurer pays for claims out of the "reserved" premiums 5. Reserve should always be enough to cover losses Principle of Indemnity - Answer - Restoration to previous financial condition; no more, no less. Indemnification - Answer - Being restored to the financial condition you were in before a loss Insurance Policy (ACCL) - Answer - 1. Contract to provide financial protection for a fee 2. Legally binding because it meets the 4 requirements of a legal contract Four Qualification (Insurance Policy-Legal Contract) - Answer - 1. Agreement: mutual consent (signature or handshake) 2. Consideration: all parties bring something of value (money in exchange for a car) 3. Competent parties: 18 years old, sober, and sane 4. Legal purpose: no contract for money laundering (has to be legal) Insured - Answer - Individual or organization that pays premiums in exchange for protection Insurer - Answer - Company, group, or government agency offering financial protection Risk (meaning) - Answer - When an insurer issues an insurance policy, the actual item, person, or organization that is being insured. Personal (Six Special Characteristics of Insurance Contracts) - Answer - The insured person is protected from losses; not the covered property D.I.C.E. - Answer - 1. Declarations Page (aka "Dec Page")/Definitions Section 2. Insuring Agreement 3. Conditions 4. Exclusions/Endorsements Declarations Page ("Dec Page") - Answer - Makes contract specific to the policyholder (names of both parties; location & description of insured item; value of insured item; dates of the policy (beginning and end); amount and limit of coverage; deductible; and premium. Definitions Section - Answer - 1. Not technically essential, but common in policies 2. defines terms used to write policy including: - "collision," "decay," "like kind and quality." 3. includes important language for adjusters to know Insuring Agreement Section - Answer - Insurer agrees: - what is covered - which causes of loss a