Florida Personal Lines Exam Questions And Answers

Florida Personal Lines Exam Questions And Answers Which of the following is LEAST likely to be a factor when determining the eligibility of a person for property insurance? A.) The claims history showing when prior claims occurred and how much was paid to settle the claim. B.) The nature of the risk, such as the type of building and the number of families living in the building. C.) Existence of any hazards, such as nearby environmental risks D.) Whether the premium will be paid in full or billed to the insured. - ANS D.) Whether the premium will be paid in full or billed to the insured. Underwriting considers the nature of the risk, hazards, present, and claims history. How the premium will be paid is not a favor in the determining an applicants eligibility for insurance. M and C both have Personal Auto policies with liability limits of 20/30/10. If M borrows C's car and injures a pedestrian, causing injuries that will cost $5,000 to treat, which policy will provide coverage for the injured party? A.) Both policies will share the loss on a pro rata basis. B.) M's policy C.) C's policy D.) Neither policy, since C's car is not scheduled on M's policy - ANS C.) C's policy Under personal auto policies, the auto owner's coverage is primary insurance, and coverage for non-owned autos is excess insurance. Since C is the owner, C's policy will cover the loss first, and M's policy will provide excess insurance if necessary. This condition is established in the "Other Insurance" condition of both policies. M has a liability insuring M's flower shop. After M sells the shop, the buyer asks if M can transfer the liability policy as part of the sale. Which condition prevents M from making this transfer without the insurer's consent? A.) Assignment B.) Liberalization C.) Assumption of Risk D.) Subrogation - ANS A.) Assignment The assignment condition states a policy holder cannot transfer policy ownership without the insurer's written consent Which of the following is not a function of insurance? A.) To protect against uncertainty and reduce anxiety B.) To transfer risk from the insured to the insurer C.) To exchange a small certain expense for a large uncertain loss D.) To act as an investment vehicle for the insured - ANS D.) To act as an investment vehicle for the insured Investment entails speculative risk, which is not Insurable