Florida Personal Lines UPDATED Exam
Questions and CORRECT Answers
A person who does not lock the door to his or her house shows an indifferent attitude. What type
of hazard does this represent? - CORRECT ANSWER - Morale
Wagering on a sporting event is known as what type of risk? - CORRECT ANSWER -
Speculative
How is actual cash value of property calculated? - CORRECT ANSWER - Current
replacement cost minus depreciation
If an insured peril was the proximate cause of loss, what type of loss is it? - CORRECT
ANSWER - Direct
what type of policy insures all property at multiple locations for a single amount? - CORRECT
ANSWER - Blanket Policy
The reduction, decrease, or disappearance of value of the person or property insured in a policy
is know as what? - CORRECT ANSWER - Loss
In property insurance, what is the purpose of a coinsurance clause? - CORRECT
ANSWER - To encourage insureds to insure property close to its value.
If a manufactured product is unsafe, what type of liability applies to the manufacturer? -
CORRECT ANSWER - Strict Liability
(Insurance carried divided by insurance required ) x Loss amount = - CORRECT
ANSWER - Loss payment
,What is subrogation? - CORRECT ANSWER - An insurer's legal right to seek damages
from third parties after reimbursing insureds for a loss.
What are the three types of hazards - CORRECT ANSWER - Physical, Moral, and Morale
What do individuals use to transfer their risk of loss to a larger group? - CORRECT
ANSWER - Insurance
An insurer discovers that an applicant for a policy has submitted a fraudulent insurance claim in
the past, What type of hazard does this represent? - CORRECT ANSWER - Moral
What determines an insurer's responsibility for payment, as a stated in an insurance policy? -
CORRECT ANSWER - Limits of liability
What term defines an exact, direct, and uninterrupted cause of loss? - CORRECT
ANSWER - Proximate cause
Under absolute liability, does an injured party need to prove negligence? - CORRECT
ANSWER - No, Absolute liability exist when a condition or conduct is inherently
dangerous. so proof of negligence is not required.
An insured's business is damaged by a fire, and temporarily shuts down for repairs. As a result,
the insured suffers loss of income. What type of loss is the loss of income? - CORRECT
ANSWER - Indirect
A policy that covers all causes of loss except for those specifically excluded is known as what
type of policy? - CORRECT ANSWER - Open Peril ( or special) form.
What type of limits of liability has the limits separately stated for different coverages? -
CORRECT ANSWER - Split limits
, How are direct and indirect losses related? - CORRECT ANSWER - Direct loses can
cause indirect losses.
In property insurance, when must the insurable interest exist? - CORRECT ANSWER - At
time of loss
What provision found in property policies prevent an insured from collecting twice for the same
loss: once from the insurer and again from a third party? - CORRECT ANSWER -
Subrogation
Insurance is a contract that protects the insured from what? - CORRECT ANSWER - Loss
what is a risk? - CORRECT ANSWER - Uncertainty of loss
What is the term for the causes of loss insured against in an insurance policy? - CORRECT
ANSWER - Peril
A situation in which a person can experience only a loss and no gain presents what type of risk? -
CORRECT ANSWER - Pure risk
A tornado that destroys a property would be an example of what? - CORRECT
ANSWER - Peril
What provision states that if a policy allows for a greater benefit than the financial loss incurred,
the insured may be compensated only for the amount lost. - CORRECT ANSWER -
Indemnity
In property insurance , what is the actual cash value? - CORRECT ANSWER -
Replacement cost at the time of loss, minus depreciation
Questions and CORRECT Answers
A person who does not lock the door to his or her house shows an indifferent attitude. What type
of hazard does this represent? - CORRECT ANSWER - Morale
Wagering on a sporting event is known as what type of risk? - CORRECT ANSWER -
Speculative
How is actual cash value of property calculated? - CORRECT ANSWER - Current
replacement cost minus depreciation
If an insured peril was the proximate cause of loss, what type of loss is it? - CORRECT
ANSWER - Direct
what type of policy insures all property at multiple locations for a single amount? - CORRECT
ANSWER - Blanket Policy
The reduction, decrease, or disappearance of value of the person or property insured in a policy
is know as what? - CORRECT ANSWER - Loss
In property insurance, what is the purpose of a coinsurance clause? - CORRECT
ANSWER - To encourage insureds to insure property close to its value.
If a manufactured product is unsafe, what type of liability applies to the manufacturer? -
CORRECT ANSWER - Strict Liability
(Insurance carried divided by insurance required ) x Loss amount = - CORRECT
ANSWER - Loss payment
,What is subrogation? - CORRECT ANSWER - An insurer's legal right to seek damages
from third parties after reimbursing insureds for a loss.
What are the three types of hazards - CORRECT ANSWER - Physical, Moral, and Morale
What do individuals use to transfer their risk of loss to a larger group? - CORRECT
ANSWER - Insurance
An insurer discovers that an applicant for a policy has submitted a fraudulent insurance claim in
the past, What type of hazard does this represent? - CORRECT ANSWER - Moral
What determines an insurer's responsibility for payment, as a stated in an insurance policy? -
CORRECT ANSWER - Limits of liability
What term defines an exact, direct, and uninterrupted cause of loss? - CORRECT
ANSWER - Proximate cause
Under absolute liability, does an injured party need to prove negligence? - CORRECT
ANSWER - No, Absolute liability exist when a condition or conduct is inherently
dangerous. so proof of negligence is not required.
An insured's business is damaged by a fire, and temporarily shuts down for repairs. As a result,
the insured suffers loss of income. What type of loss is the loss of income? - CORRECT
ANSWER - Indirect
A policy that covers all causes of loss except for those specifically excluded is known as what
type of policy? - CORRECT ANSWER - Open Peril ( or special) form.
What type of limits of liability has the limits separately stated for different coverages? -
CORRECT ANSWER - Split limits
, How are direct and indirect losses related? - CORRECT ANSWER - Direct loses can
cause indirect losses.
In property insurance, when must the insurable interest exist? - CORRECT ANSWER - At
time of loss
What provision found in property policies prevent an insured from collecting twice for the same
loss: once from the insurer and again from a third party? - CORRECT ANSWER -
Subrogation
Insurance is a contract that protects the insured from what? - CORRECT ANSWER - Loss
what is a risk? - CORRECT ANSWER - Uncertainty of loss
What is the term for the causes of loss insured against in an insurance policy? - CORRECT
ANSWER - Peril
A situation in which a person can experience only a loss and no gain presents what type of risk? -
CORRECT ANSWER - Pure risk
A tornado that destroys a property would be an example of what? - CORRECT
ANSWER - Peril
What provision states that if a policy allows for a greater benefit than the financial loss incurred,
the insured may be compensated only for the amount lost. - CORRECT ANSWER -
Indemnity
In property insurance , what is the actual cash value? - CORRECT ANSWER -
Replacement cost at the time of loss, minus depreciation
