Florida General Lines Agent Exam questions and answers 2023/2024 solved 100% correct

Florida General Lines Agent Exam questions and answers 2023/2024 solved 100% correct Answers are highlighted in red What is the definition of a risk that is insurable? a.Risk is defined as a chance or the possibility of financial loss; only pure risks are insurable as there is no possibility of a gain b.A chance of a loss or gain c.A risk where there is a possibility of a gain d.A chance for insurance coverage Answer a What is an insurance policy? a.A binder that offers initial insurance coverage b.An oral agreement related to insurance c.A temporary agreement for insurance coverage d.A written agreement or contract for insurance coverage Correct Answer . What is an insurance binder? a.An agreement with an insurer for coverage b.A temporary agreement for insurance coverage subject to the decision of the insurer Correct Answer c.A permanent agreement for insurance coverage d.An agreement with an agent The term casualty is related to all the following insurance lines except? a.Life and health insurance Correct Answer b.Marine insurance c.Insurance on property d.Liability insurance What is the mathematical concept where the actual results from an event being measured will equal the predicted or expected results as the number of units or trials increases? Answer The concept of The Law of Large Numbers. What insurance principle acts to place an insured in the same or similar financial position after a loss as was prior to the loss event? a.The indemnity principle Correct Answer b.The waiver principle c.The principle of utmost good faith d.The principle of subrogation What type of contract prevents an insured from transferring the interest of an insurance policy to another? a.A personal contract Correct Answer b.An indemnity contract c.A subrogation contract d.A contract of good faith a What type of contract is one where the obligation of the insurer is to perform the terms of the contract and is based on the insured satisfying certain conditions? a.A binding contract b.A personal contract c.A conditional contract Correct Answer d.An adhesion contract What type of contract is it that the insured cannot negotiate the terms of the contract and must accept the terms specified in the contract? a.An indemnity contract b.A conditional contract c.A contract of adhesion Correct Answer d.A personal contract What type of interest (financial or legal) in property must an insured have to benefit from a loss that is insured? a.Insurable interest Correct Answer b.An adhesion interest c.An indemnity interest d.A personal interest What insurance doctrine states that a cause of a loss and all other directly related events flowing from the same cause of the loss would be considered as one event? a.The doctrine of insurable interest b.The doctrine of proximate cause Correct Answer c.The loss doctrine d.The doctrine of classification John got in an accident that damaged his automobile, what would be considered as what type of loss? a.Direct loss Correct Answer b.Insured loss c.Insurable loss d.Indirect loss John's home was totally destroyed by fire that resulted in him moving his family to a hotel. The cost of the hotel would be considered as what type of loss? a.A direct loss b.Direct expenses c.An indirect loss Correct Answer d.Insured loss What insurance clause is related to a lender or creditor's interest in real property and the insurer would pay losses to all parties that have an interest in the same property? a.Subrogation clause b.Mortgage or mortgagee clause Correct Answer c.Property loss clause d.Loss payable or payee clause What insurance clause is related to a creditor's interest in personal property such as an auto? a.The property interest clause b.The mortgage or mortgagee clause c.The creditor interest clause d.The loss payable or loss payee clause Correct Answer Which of the following is not a legal requirement for a contract? a.All are legal requirements Correct Answer b.The contract must have a legal purpose and transfer of consideration (something of value such as payment of insurance premiums) c.There must be a valid offer and a voluntary acceptance d.The parties to the contract must have legal capacity to contract What insurance loss settlement method is defined as the cost to replace the item less allowance for depreciation, and is the common method used for settlement of personal property losses? a.Scheduled settlement method b.Valued or stated settlement method c.Actual cash value settlement method Correct Answer d.Replacement cost (RC) settlement method What insurance loss settlement method is defined as: the property loss is replaced with items that are similar and of like kind and quality, and is the common method used in settling real property losses? a.Replacement cost settlement method Correct Answer b.Actual cash value settlement method c.Scheduled settlement method d.Valued or stated settlement method a What insurance settlement method is defined as: the insurer agrees in advance to pay the value of the property insured up to the coverage limits regardless of the property ACV or RC a.Actual cash value ACV settlement method b.Valued or stated settlement method Correct Answer c.Replacement cost (RC) settlement method d.Structured settlement method What settlement method is related to the price a willing buyer will pay for the property? The market value Answer The remaining value of property after a total loss is referred to as? Salvage value Answer The Florida law that states that an insured must pay the full coverage limits on property when there is a total loss is referred to as? Florida valued policy law Answer A property valued at $100,000 is insured for $56,000 on a property policy that has a coinsurance requirement of 80%. What amount of the loss is payable by the insurer if there is a loss of $20,000? The coinsurance formula is C / R x L where C is the amount of insurance CARRIED by the insured on the property. R is the amount of insurance coverage REQUIRED by the insurer based on the coinsurance requirement and L is the amount of the LOSS. The amount payable for the loss would be? loss would be $14,000 ($56,000 / $80,000 (80% of $100,000) x $20,000. Calculate the amount payable for a loss of $50,000 based on a property that is valued at $200,000 and the property is insured for $120,000 on a policy that requires a coinsurance amount of 80%? a.$37,500 ($120,000 / $160,000 (80% of $200,000) x $50,000) Correct Answer b.$10,000 (20% of $50,000) c.$50,000 (100% of $50,000) d.$40,000 (80% of $50,000) There are 2 properties insured, property #1 has an insurance limit of $200,000 and property #2 has a coverage amount of $300,000. What would be the total coverage limit based on the properties being insured on a blanket basis? a.Each property would be insured for their coverage limits b.$300,000 would be the blanket limit c.$500,000 ($200,000 + $300,00) Correct Answer d.$200,000 would be the blanket limit A property policy is insured with a standard deductible of $500 and there is a loss of $5,000. What would the insurer pay for the loss? $4,500 ($5,000 - $500) Answer A property is insured with a franchise deductible of $500 and there is a $5,000 loss. What amount of the loss would be payable by the insurer? $5,000 (the entire loss would be paid as the loss exceed the deductible). Answer An agreement that pays on behalf of an insured as defined by the policy or coverage the amount that the insurer is legally liable for up to the limits of the policy is considered? legal liability Answer An insured auto is insured for $30,000 liability coverage that applies to both bodily injury and property damage would be considered as? a.Single limit of liability Correct Answer b.Total liability c.Aggregate limit of liability d.Split limits of liability John's auto is insured for 10/20/10 liability split limits. Explain how the limits would be applied if there is an accident? $10,000 would be the limit that would apply to any 1 person bodily injury. $20,000 would be the limit that would apply to 2 or more persons injury and $10,000 would be the limit that would apply to the property damage. Answer A policy with one limit that would apply to all losses that occur during the policy period would be considered as what type of liability limit? aggregate limit of liability Answer Liability insurance only pays for? monetary damages,Remember liability insurance does not cover punitive damages which are damages a court may impose on someone due to gross negligence or willful regard for the welfare of others Answer What type of legal liability is imposed on a person regardless of fault for liability such as liability for employee injury and manufacturing of chemicals or other dangerous substances? absolute or strict liability Answer What type of liability may be imposed on someone for the negligent acts of others within the person's control or supervision or for employees acting within the scope of the authority granted? vicarious liability Answer The following are legal requirements for bringing a suit involving negligence except? a.All are legal requirements Correct Answer b.The person must fail to perform the legal duty c.The person must be under a legal duty to perform some action d.The injury must be the proximate (related) cause of the failure to perform Which of the following legal damages are not covered by liability policies? a.General damages b.Punitive damages Correct Answer c.Compensatory damages d.Special damages What type of compensatory damage involves injuries that can easily be calculated in monetary terms often including injury that result in loss of wages and medical expenses? general damages Answer What type of compensatory damage involves injuries that may not be easily calculated in monetary terms often including injury such as pain and suffering, death and other serious injury? special damage Answer Which of the following is not one of the duties of an insured after the occurrence of a loss that is insured? a.Cooperate with the insurer b.All are duties Correct Answer c.Prompt notice of the loss to the insurer d.Act in ways to preserve the insurer's rights under the contract B What insurance clause provides the insurer the right to recover claims paid to an insured from a negligent third party and the insured is prohibited from impeding the insurer's rights under the clause? a.Subrogation clause Correct Answer b.Assignment clause c.Indemnity clause d.Insurable interest clause A What insurance clause prohibits the insured from transferring the rights under the contract to another without written consent of the insurer? rights of assignment clause Answer What will happen to insurance coverage when the property insured is taken outside the territory (geographic area) specified by the insurance contract? The coverage will be suspended until the property is return to the covered territory". Answer There are 2 policies covering the same loss of $30,000. Policy A coverage limit is $100,000 and policy B coverage limit is $200,000. How would the loss be distributed under the Pro-rata distribution method? Policy A would pay $10,000 (1/3 of the loss $100,000 / $300,000) and Policy B $20,000 (2/3 of the loss $200,000 / $300,000). Answer There are 2 policies covering the same loss of $120,000. Policy A is the primary policy with a limit of $100,000 and Policy B is the excess policy with a limit of $100,000. How would the loss be distributed under the primary and excess method? Policy A would pay $100,000 and policy B would pay $20,000 Answer Which insurance policy provision states that when the insurer broadens coverage without any additional premiums the benefit would apply to all similar polices? a.The insurable interest provision b.The liberalization provision Answer c.The subrogation provision d.The appraisal provision B Which insurance policy provision provides a remedy for settling claim disputes between an insured and insurer but only related to the amount of the settlement and not any other disputes? a.The severability provision b.The subrogation provision c.The liberalization provision d.The appraisal provision d Which insurance provision states that insurance coverage would apply individually to all insureds and the acts of one would not impede the rights of the other insureds? a.The appraisal provision b.The insurable interest provision c.The severability provision d.The liberalization provision c A statement of fact that is made part of an insurance contract and a breach would result in the contract being voidable by the insurer is? a.A concealment b.A representation c.A misrepresentation d.A warranty D An untrue statement made by an applicant for insurance coverage would be considered as? Misrepresentation Answer Statements made on an application for insurance for insurance coverage shall be deemed as? Answer representations:Note that Florida requires all statements on an insurance application should be representations and not warranties except for transportation insurance An insured's failure to reveal relevant facts known to the insured is considered as? Concealment Answer The following would be legal grounds for an insurer avoidance of performance (prevent recovery) under an insurance contract except? a.All would apply b.Intentional and fraudulent acts by an insured c.Misrepresentations that are material to the risk being insured d.Breach of a warranty under transportation insurance that would result in a hazardous condition and the means of the breach is within the control of the insured A The following are related to the Federal Fair Credit Reporting Act (FCRA) except? a.The consumer is required to be provided with information related to the consumer reporting agency when there is an adverse decision b.All are related to the FCRA c.The act requires consumers to be aware of the purpose for a consumer report by providing written consent to securing a credit report d.The primary purpose of the act is to set guidelines for consumer reporting agencies regarding sharing of consumers non-public information B The following are information required to be excluded from consumer reports provided by consumer reporting agencies under the Fair Credit Reporting Act except? a.Arrest records over 7 years or expiration of statutes of limitations b.Report on bankruptcy adjudicated over 10 years and civil judgements over 7 years c.Paid tax liens or other adverse information antedating the report more than 7 years d.Information regarding Title Eleven of the US code The following are related to the Gramm-Leach-Bliley Act (GLBA) also known as the Financial Services Modernization Act (FSMA) except? a.It prohibits Banks and other financial institutions from cross marketing or involvement in financial products not related to the particular financial institution b.The act specifies that the privacy notice must contain a customer right of refusal to share their financial information with non-affiliates and contain the information collected, the use of the information and where and how the information is shared c.The act mandated financial institutions to implement policies and procedures to protect the integrity, confidentiality and privacy regarding the sharing of consumers non-public personal information d.The act requires that each consumer be provided with a written privacy notice at the time the of the relationship and thereafter on an annual basis A The following are related to the Terrorism Risk Insurance Act (TRIA) enacted in 2002 after the terrorist attack on the World Trade Center on 09/11/2001 except? a.Under the act the Federal government would provide assistance to insurers which would share in losses due to acts of terrorism and provide that insurers should omit any exclusions applicable to commercial property policies b.The act requires property and casualty insurers to offer applicants terrorism coverage for a period of 2 years and the definition of terrorism must be certified by the Secretary of State and the Attorney General c.All are related to the TRIA d.The purpose of the act was to allow commercial property insurers to provide terrorism coverage for insureds whom may be subject to acts of terrorism C The following events (triggers) would require a person to comply with Florida financial responsibility law after an auto accident except? a.An accident that result in damage to the auto that render it inoperable b.All would apply c.After conviction of a serious traffic violation such as driving under the influence d.An accident that result in bodily injury B What is the minimum liability limits under Florida financial responsibility law? 10/20/10 split limits or $30,000 single limit of liability Answer What is the required liability limit under Florida financial responsibility law for a person being found guilty of driving under the influence for a period of 3 years? 100/300/50 or $350,000 single limit Answer A Florida resident with 10/20/10 liability limits got in an accident in a state that requires 25/50/10 liability limits under that state financial responsibility law. What limit would apply to the accident in the other state? 25/50/10, the other state required limit would apply Answer The following are penalties for non-compliance under Florida financial responsibility law except? a.There would be no penalty b.The registration of all vehicles would be suspended c.Conviction of a 2nd degree misdemeanor for committing forgery or filing a false affidavits with the motor vehicle department d.The vehicle operator driver's license would be suspended A A person who does not own an auto, but is required to comply (file SR-22) with Florida financial responsibility law for use of non-own vehicles, can purchase? The named non-owner policy Answer The following are primary elements of Florida no-fault law except? a.Persons who comply with the law have limited immunity for injuries and coverage under no-fault only provides for bodily injury coverage and not property damage b.Florida is not a no-fault state c.Coverage is provided by the person's own insurer regardless of fault for an accident and benefits are provided under the state personal injury protection (PIP) coverage d.No-fault provides first party benefits for economic loss over other medical expense and disability policies except in excess for benefits payable under workers compensation B Answer The following vehicles are exempt from carrying no-fault coverage except? a.Government vehicles used in transit to transport more than 5 passengers b.Mobile homes and public school buses c.Taxicabs, limousines and vehicles with 2 wheels d.Vehicles with 4 or more wheels required to be registered for use on Florida public highways D Answer What is the minimum required coverage limit under the state no-fault PIP coverage? $10,000 per person each occurrence (per accident), Which of the following is not a benefit under the state personal injury protection (PIP) coverage? a.60% of loss of gross income (work loss) b.80% of medical expenses c.100% for replacement of household services and $5,000 death benefit d.Survivors benefit D The following are other requirements under the PIP coverage except? a.Coverage may be provided subject to deductibles of $250, $500 and $1,000 b.Deductibles are subtracted from the medical expenses before applying to benefit c.Work loss benefits may be excluded for persons without earned income such as a retiree d.The insurer of the negligent party for an accident must provide PIP coverage to any person who is not at fault for the accident D An insured has $10,000 PIP coverage with $1,000 deductible and got in an accident that resulted medical expenses of $11,000. What is the PIP coverage for the medical expenses? $8,000 ($11,000 - $1,000 deductible @ 80%);Note:if after the calculation the amount had exceeded the coverage limit of $10,000 then the amount would have been the coverage limit as the loss cannot exceed the coverage limit The following are defined as insureds and would be entitle to PIP benefits except? a.The named insured and family members of the named insured household while occupying any vehicle in Florida and as pedestrians b.An insured injury while as a pedestrian or occupying a non-own vehicle out of Florida c.Injury to pedestrians by an insured covered auto for accidents occurring in Florida except non-residents d.Injuries to passengers of an insured auto who is not required to have PIP for accidents that occur in Florida B John a Florida resident with $10,000 PIP got in an accident in New York in his friend's vehicle and incurred $10,000 medical expenses. What is the PIP coverage amount for John's medical expenses? $0 (PIP does not apply for injuries of an insured occupying a non-own auto out-ofstate), John has $10,000 PIP and got in accident in Florida due to the fault of the other driver and incurred $20,000 in medical expense. What is the amount John can recover under Tort law for his medical expenses not covered by his PIP? $10,000 ($10,000 - $20,00);Note:80% of $20,000 = $16,000 which exceeds the PIP limit of $10,000 so the coverage amount would be $10,000 and John can sue for the amount not recovered from PIP which is $10,000 The following are exclusions under PIP except? a.All are exclusions b.Injuries resulting from self-inflicted injuries or during the commission of a felony c.Persons operating the insured auto without permission d.Insureds occupying a vehicle owned not covered for PIP A The following are exemptions (thresholds) for suits under tort law for injuries (pain and suffering) of an insured resulting from an at fault driver except? a.Permanent injury other than scaring and disfigurement b.Significant and permanent loss of bodily function c.All are thresholds d.Significant and permanent scaring and disfigurement C What is the required written notice an insurer is required to provide an insured for cancellation or non-renewal of coverage for automobile coverage? a.10 days for non-payment of premiums both for cancellation and non-renewal b.All are required c.Florida requires 45 days' notice for cancellations (first 90 days of coverage) d.Florida requires 45 days' notice for non-renewal (after 90 days coverage) and renewal of coverage B The following are related to uninsured motorist (UM) coverage in Florida except? a.The agent is required to offer UM coverage at the time of an application and have subject sign a written waiver by the applicant for refusal of coverage b.The insurer is required to offer UM coverage for insureds without UM coverage each year at the renewal date of the policy c.All apply to Uninsured Motorists coverage in Florida d.The UM coverage must be at least equal to the policy bodily injury liability coverage limit and have subject sign a waiver for lesser coverage C A Florida resident with physical damage coverage subject to a deductible of $500 got in an accident that damage the auto glass and it would cost $1,500 to repair. What coverage would apply to the glass damage? $1,500 (no deductible apply to glass damage in Florida Which of the following is not eligible for coverage under the personal auto policy (PAP)? a.An auto title in the name of a business b.A private passenger type auto including a Jeep or Station wagon c.A van or pickup with a gross weight of less than 10,000 pounds and not used to transport goods or materials d.An auto lease for a period of 6 months or more A Which of the following would not be part of the personal auto policy (PAP) declaration page? a.The telephone number of the insured b.The coverages, limits and any applicable deductibles c.The name of the loss payee (a creditor's interest in the auto) d.The policy period and insurer's name and home office address A Which of the following would not be considered as a covered auto under the PAP? a.An auto permanently assigned to an insured b.A temporary substitute auto due to the breakdown, repair or maintenance of the insured covered auto and a non-own auto not permanently assigned to an insured c.The auto listed in the policy declaration page including an own or non-own trailer d.A newly acquired auto including an additional or replacement auto A The following applies for coverage of a newly acquired auto under the PAP except? a.The broadest coverage on the policy will apply to newly acquired autos not including the physical damage coverage b.An additional auto is covered for 14 days if the policy has physical damage coverage on at least 1 auto and 4 days on a policy without physical damage coverage c.All would apply to a newly acquired auto d.A replacement auto is covered for 14 days if the policy has physical damage coverage and for 4 days if the policy has no physical damage coverage C