FLORIDA GENERAL LINES EXAMS SCRIPT 2025/2026
QUESTIONS AND SOLUTIONS GRADED A+
✔✔Which of the following is not a legal requirement for a contract?
a.All are legal requirements
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 - ✔✔a
✔✔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
d.Replacement cost (RC) settlement method - ✔✔c
✔✔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
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
c.Replacement cost (RC) settlement method
d.Structured settlement method - ✔✔b
✔✔What settlement method is related to the price a willing buyer will pay for the
property? - ✔✔The market value
✔✔The remaining value of property after a total loss is referred to as? - ✔✔Salvage
value
,✔✔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
✔✔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)
b.$10,000 (20% of $50,000)
c.$50,000 (100% of $50,000)
d.$40,000 (80% of $50,000) - ✔✔a
✔✔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)
d.$200,000 would be the blanket limit - ✔✔c
✔✔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)
✔✔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).
✔✔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
✔✔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
, b.Total liability
c.Aggregate limit of liability
d.Split limits of liability - ✔✔a
✔✔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.
✔✔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
✔✔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
✔✔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
✔✔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
✔✔The following are legal requirements for bringing a suit involving negligence except?
a.All are legal requirements
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 - ✔✔a
✔✔Which of the following legal damages are not covered by liability policies?
a.General damages
b.Punitive damages
c.Compensatory damages
d.Special damages - ✔✔b
✔✔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
QUESTIONS AND SOLUTIONS GRADED A+
✔✔Which of the following is not a legal requirement for a contract?
a.All are legal requirements
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 - ✔✔a
✔✔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
d.Replacement cost (RC) settlement method - ✔✔c
✔✔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
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
c.Replacement cost (RC) settlement method
d.Structured settlement method - ✔✔b
✔✔What settlement method is related to the price a willing buyer will pay for the
property? - ✔✔The market value
✔✔The remaining value of property after a total loss is referred to as? - ✔✔Salvage
value
,✔✔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
✔✔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)
b.$10,000 (20% of $50,000)
c.$50,000 (100% of $50,000)
d.$40,000 (80% of $50,000) - ✔✔a
✔✔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)
d.$200,000 would be the blanket limit - ✔✔c
✔✔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)
✔✔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).
✔✔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
✔✔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
, b.Total liability
c.Aggregate limit of liability
d.Split limits of liability - ✔✔a
✔✔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.
✔✔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
✔✔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
✔✔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
✔✔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
✔✔The following are legal requirements for bringing a suit involving negligence except?
a.All are legal requirements
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 - ✔✔a
✔✔Which of the following legal damages are not covered by liability policies?
a.General damages
b.Punitive damages
c.Compensatory damages
d.Special damages - ✔✔b
✔✔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
