Personal Lines 20-44 Practice UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Insurance contracts consist of several characteristics. The characteristic that states, "one should
not profit from the response of insurance," is known as... - CORRECT ANSWER -
Indemnity
All of the following are true statements concerning liability insurance, EXCEPT... - CORRECT
ANSWER - Payment is mafe to the insured for legal liability.
What insurance policy condition states that coverage will apply to each insured separately as if
the other insured(s) did not exist? - CORRECT ANSWER - Severability
What insurance contract condition prevents a stranger from purchasing homeowners insurance
on his neighbor's house, burning the house down, and collecting insurance on the property? -
CORRECT ANSWER - Insurable Interest
An indemnity contract is one in which... - CORRECT ANSWER - An amount equal to the
loss is paid in the assure attempts to make the insured hole again.
When the insured receives replacement cost for a loss, instead of the actual cash value, it may
appear to be a departure from the strict adherence to what insurance contract characteristic? -
CORRECT ANSWER - Indemnity
An insurance contract is written by one party, the insurer, without any terms being negotiated.
This contract is basically a t "take it or leave it" agreement. What is the term for this type of
contract? - CORRECT ANSWER - Contract of adhesion
What insurance contract characteristic would prevent Brad from purchasing property insurance
on a local warehouse building, burning it down, and collecting the insurance money? -
CORRECT ANSWER - Insurable interest
,A personal auto policy provides coverage for the insured and is considered a type of... -
CORRECT ANSWER - Property insurance
Insurance contracts are considered personal contract contracts because they provide coverage
for... - CORRECT ANSWER - Persons
What type of contract pays an amount equal to the loss and attempt to make the insured whole
again, such as property and health policies? - CORRECT ANSWER - Indemnity
In an insurance contract, only one party, the insurer makes an enforceable promise. This contract
is known as... - CORRECT ANSWER - Unilateral
James is a licensed insurance agent in Florida. His family owns several corporations and they
hire James to work for them. His sole responsibility is writing insurance for all the family
corporations this is considered... - CORRECT ANSWER - Controlled business
In property insurance policies, when must insurable interest exist? - CORRECT
ANSWER - At the time of loss
The type of insurance coverage that pays on behalf of the insured to someone else is known as
what type of coverage? - CORRECT ANSWER - Liability
Thomas and his wife Carol are covered by the same insurance policy. Thomas is playing golf
and in a fit of anger intentionally injures Chuck Chuck files a claim against both Thomas and
Carol the insurer will provide coverage for Carol, but not for Thomas. Intentional injury is an
exclusion and insurance contracts, so what insurance policy condition allows for Carol to be
provided coverage? - CORRECT ANSWER - Severability
Which of the following is NOT a requirement for insurance licensure in Florida? - CORRECT
ANSWER - Hold a minimum of a high school diploma
,Brenda passed her Florida insurance exam and obtained a insurance license. She must be
appointed with an insurance company within... - CORRECT ANSWER - 48 months
Which of the following is an example of an indirect loss? - CORRECT ANSWER - Betty
had to move out of her home and into an apartment for two weeks after sustaining flood damage.
While waiting for the insurance policy/contract to be written and delivered an insurance agent
may issue a(n) _______ as evidence of insurance coverage. - CORRECT ANSWER -
Binder
Insured has fire damage to his residence and must move out for one week while the damage is
being repaired which of the following would not be a covered in direct loss for the insured? -
CORRECT ANSWER - Damage to the home
When must insurable interest exist in property-casualty insurance? - CORRECT
ANSWER - At the time of loss
Robert has a homeowners policy that has been an effect for one year how much notice must be
given for his renewal premium for the upcoming year? - CORRECT ANSWER - 45 days
What type of loss settlement waves coinsurance by filing a signed statement of values with the
insurer and insuring for 80% or more of the value? - CORRECT ANSWER - Agreed value
Commercial property policy has a building limit for $400,000, and 80% coinsurance and a $1000
deductible at the time of a $40,000 building loss. It is found that the value of the building is
$500,000, what can insured to recover of this loss? - CORRECT ANSWER - $39,000
What part of an insurance contract will you find modifications or customization of the original
policy broadening or restricting coverage? - CORRECT ANSWER - Endorsements
, Which of the following situations would be considered a robbery? - CORRECT
ANSWER - Someone comes up behind Betty, sticks with she believes to be a gun in her
back, and takes her handbag.
Joe carries homeowners on his dwelling in the amount of $100,000. At the time of a total loss to
Joe's home. It is discovered that due to a job in real estate prices. His home is worth only
$80,000. Due to the Florida Valued Policy Law, Joe will recover what amount from his insurer?
- CORRECT ANSWER - $100,000
An insurance applicant states on the application that they drive only 10 miles to work each day.
This is considered a... - CORRECT ANSWER - Representation
Even though Johnson & Johnson may not have been negligent, they were still hell legally liable
for the tainted Tylenol capsules back in the 1980s. What type of viability is this? - CORRECT
ANSWER - Strict liability
Which of the following statement best describes the definition of a peril? - CORRECT
ANSWER - A condition or possible occurrence that may cause a loss.
Which of the following is considered a peril? - CORRECT ANSWER - Windstorm
Insurance is all about the indemnification or making the insured whole again. Which loss
settlement option may seem to depart from the principle of indemnity? - CORRECT
ANSWER - Replacement Cost
Smoking in bed or driving too fast are both examples of what? - CORRECT ANSWER -A
Morale hazard
There are certain circumstances in which the insurer may not be required to pay a claim upon the
occurrence of a covered peril.in which of the circumstances would the insure most likely not be
responsible to provide coverage for the event? - CORRECT ANSWER - May not be
required to respond to any of these occurrences.
ACTUAL Exam Questions and CORRECT
Answers
Insurance contracts consist of several characteristics. The characteristic that states, "one should
not profit from the response of insurance," is known as... - CORRECT ANSWER -
Indemnity
All of the following are true statements concerning liability insurance, EXCEPT... - CORRECT
ANSWER - Payment is mafe to the insured for legal liability.
What insurance policy condition states that coverage will apply to each insured separately as if
the other insured(s) did not exist? - CORRECT ANSWER - Severability
What insurance contract condition prevents a stranger from purchasing homeowners insurance
on his neighbor's house, burning the house down, and collecting insurance on the property? -
CORRECT ANSWER - Insurable Interest
An indemnity contract is one in which... - CORRECT ANSWER - An amount equal to the
loss is paid in the assure attempts to make the insured hole again.
When the insured receives replacement cost for a loss, instead of the actual cash value, it may
appear to be a departure from the strict adherence to what insurance contract characteristic? -
CORRECT ANSWER - Indemnity
An insurance contract is written by one party, the insurer, without any terms being negotiated.
This contract is basically a t "take it or leave it" agreement. What is the term for this type of
contract? - CORRECT ANSWER - Contract of adhesion
What insurance contract characteristic would prevent Brad from purchasing property insurance
on a local warehouse building, burning it down, and collecting the insurance money? -
CORRECT ANSWER - Insurable interest
,A personal auto policy provides coverage for the insured and is considered a type of... -
CORRECT ANSWER - Property insurance
Insurance contracts are considered personal contract contracts because they provide coverage
for... - CORRECT ANSWER - Persons
What type of contract pays an amount equal to the loss and attempt to make the insured whole
again, such as property and health policies? - CORRECT ANSWER - Indemnity
In an insurance contract, only one party, the insurer makes an enforceable promise. This contract
is known as... - CORRECT ANSWER - Unilateral
James is a licensed insurance agent in Florida. His family owns several corporations and they
hire James to work for them. His sole responsibility is writing insurance for all the family
corporations this is considered... - CORRECT ANSWER - Controlled business
In property insurance policies, when must insurable interest exist? - CORRECT
ANSWER - At the time of loss
The type of insurance coverage that pays on behalf of the insured to someone else is known as
what type of coverage? - CORRECT ANSWER - Liability
Thomas and his wife Carol are covered by the same insurance policy. Thomas is playing golf
and in a fit of anger intentionally injures Chuck Chuck files a claim against both Thomas and
Carol the insurer will provide coverage for Carol, but not for Thomas. Intentional injury is an
exclusion and insurance contracts, so what insurance policy condition allows for Carol to be
provided coverage? - CORRECT ANSWER - Severability
Which of the following is NOT a requirement for insurance licensure in Florida? - CORRECT
ANSWER - Hold a minimum of a high school diploma
,Brenda passed her Florida insurance exam and obtained a insurance license. She must be
appointed with an insurance company within... - CORRECT ANSWER - 48 months
Which of the following is an example of an indirect loss? - CORRECT ANSWER - Betty
had to move out of her home and into an apartment for two weeks after sustaining flood damage.
While waiting for the insurance policy/contract to be written and delivered an insurance agent
may issue a(n) _______ as evidence of insurance coverage. - CORRECT ANSWER -
Binder
Insured has fire damage to his residence and must move out for one week while the damage is
being repaired which of the following would not be a covered in direct loss for the insured? -
CORRECT ANSWER - Damage to the home
When must insurable interest exist in property-casualty insurance? - CORRECT
ANSWER - At the time of loss
Robert has a homeowners policy that has been an effect for one year how much notice must be
given for his renewal premium for the upcoming year? - CORRECT ANSWER - 45 days
What type of loss settlement waves coinsurance by filing a signed statement of values with the
insurer and insuring for 80% or more of the value? - CORRECT ANSWER - Agreed value
Commercial property policy has a building limit for $400,000, and 80% coinsurance and a $1000
deductible at the time of a $40,000 building loss. It is found that the value of the building is
$500,000, what can insured to recover of this loss? - CORRECT ANSWER - $39,000
What part of an insurance contract will you find modifications or customization of the original
policy broadening or restricting coverage? - CORRECT ANSWER - Endorsements
, Which of the following situations would be considered a robbery? - CORRECT
ANSWER - Someone comes up behind Betty, sticks with she believes to be a gun in her
back, and takes her handbag.
Joe carries homeowners on his dwelling in the amount of $100,000. At the time of a total loss to
Joe's home. It is discovered that due to a job in real estate prices. His home is worth only
$80,000. Due to the Florida Valued Policy Law, Joe will recover what amount from his insurer?
- CORRECT ANSWER - $100,000
An insurance applicant states on the application that they drive only 10 miles to work each day.
This is considered a... - CORRECT ANSWER - Representation
Even though Johnson & Johnson may not have been negligent, they were still hell legally liable
for the tainted Tylenol capsules back in the 1980s. What type of viability is this? - CORRECT
ANSWER - Strict liability
Which of the following statement best describes the definition of a peril? - CORRECT
ANSWER - A condition or possible occurrence that may cause a loss.
Which of the following is considered a peril? - CORRECT ANSWER - Windstorm
Insurance is all about the indemnification or making the insured whole again. Which loss
settlement option may seem to depart from the principle of indemnity? - CORRECT
ANSWER - Replacement Cost
Smoking in bed or driving too fast are both examples of what? - CORRECT ANSWER -A
Morale hazard
There are certain circumstances in which the insurer may not be required to pay a claim upon the
occurrence of a covered peril.in which of the circumstances would the insure most likely not be
responsible to provide coverage for the event? - CORRECT ANSWER - May not be
required to respond to any of these occurrences.
