2025/2026
Florida Adjusters License Exam
When Sally applies for an auto policy, her agent issues her a ________ so that she can benefit from
insurance protection while he underwrites the policy.
ANS: Binder
When an insurer buys insurance to reduce its exposure to loss, this is called
ANS: Reinsurance
Reinsurance
ANS: insurance for insurers; it helps reduce their exposure to losses
Emma is found guilty of arson causing 175,000 in damages to her home, which still has 155,000 left on
her mortgage at the time of the fire. Under her mortgage clause, Emma's mortgage lender can recoup:
ANS: 155,000 of insurable interests - the amount left outstanding on the loan
An "occurrence" is defined as:
ANS: an unexpected event that causes loss.
Replacement Cost Value:
ANS: Under replacement cost valuation, insurers may safeguard the principle of indemnity by requiring
policy holders to replace insured items before making full reparations
Cindy holds an insurance policy from Sine Nomine Insurance. This is not a publicly traded company, and
Cindy can participate in the election of the board, receiving dividends if the company does well. Sine
Nomine Insurance could be best described as a:
ANS: Mutual Insurance Company
Loss of Money invested in the stock market is a
1|P ag e
,2025/2026
ANS: speculative risk
When taking recorded witness statements, the adjuster should
ANS: Remain Objective
Coinsurance Policy
ANS: requires you to have a minimum of 80% minimum, if you do not comply there is a penalty
Coinsurance Penalty Formula
ANS: dividing the amount of coverage one should have by how much they do have.
EX: they should have 80% (96,000) , they do have (40,000). 40,000/96,000= 41.67%
then apply that to the perceived cost of indemnity before the penalty.
12,000 x 41.67% = 5,000
They will receive 5,000 dollars
Standard Fire Policy Pays
ANS: Actual Cash Value
Stan built a porch for his home three years ago at a cost of $10,000. The value of the porch has
depreciated by $6,000, and it would cost $12,000 to replace it today. After Stan's porch burnt down
during a BBQ today, how much would a Standard Fire Policy indemnify Stan for his porch?
ANS: 12,000 - 6,000 = 6,000
he will receive 6,000 because standard fire pays actual cash value
John moved out of his home 3 months ago and put it up for sale. While waiting for it to sell, the pipes
burst and damage the floors due to freezing.
This is not covered
2|P ag e
,2025/2026
ANS: freezing is a covered peril but is excluded if the building is vacant and the insured has not taken
responsible care to maintain heat or shut off the water supply
DP-2 Broad Form covers what under the peril of theft?
ANS: Broken windows caused by the burglar breaking in
Which of the following is covered under a DP-3
a. earthquake
b. flood
c. water backup from sewers
4. Power failure on premises
ANS: Power failure on-premises
In a dwelling policies, coverage D pays for
ANS: Lost Rental Income
If a Florida HO policy has been in effect for fewer than 90 days For nonpayment-related cancelation the
insurer must notify the policyholder at least:
ANS: 10 days before cancelling
If a Florida HO policy has been in effect for fewer than 90 days for any other approved reason the policy
holder must be notified at least
ANS: 20 days before cancelling
The coverage for damage to personal property off-premises is limited to 10% of coverage c's limit in a
DP-2 policy.
ANS: coverage c is 25,000 x 10% = 2,500
2,500 would be off-premise coverage limit
3|P ag e
, 2025/2026
HO-5
ANS: Best coverage policy
A processing and servicing company would qualify for a BOP only if they have less than
ANS: 3 million in annual rev
A "Single Occurrence" on the earthquake and volcanic eruptions for involves any and all eruptions
and/or earthquakes that take place with in a:
ANS: Single 168-hour Policy -7 days
The coverage limit in bob's commercial property policy goes up 2% every time the policy renews. Which
optional coverage might Bob have included as part of his insurance package?
ANS: Inflation Guard
In a BOP, the General Aggregate Limit is:
ANS: x2 / twice the per occurrence limit
Why has pollutant clean up and removal coverage become more popular recently?
ANS: EPA fines and penalties have increased
Strict Liability
ANS: holds a person liable for his actions regardless of how much care he demonstrates
Binder
ANS: Temporary Coverage
After a loss covered under a dwelling policy, ordinance and law, coverage pays for
ANS: Increased repair cost due to laws or codes
4|P ag e
Florida Adjusters License Exam
When Sally applies for an auto policy, her agent issues her a ________ so that she can benefit from
insurance protection while he underwrites the policy.
ANS: Binder
When an insurer buys insurance to reduce its exposure to loss, this is called
ANS: Reinsurance
Reinsurance
ANS: insurance for insurers; it helps reduce their exposure to losses
Emma is found guilty of arson causing 175,000 in damages to her home, which still has 155,000 left on
her mortgage at the time of the fire. Under her mortgage clause, Emma's mortgage lender can recoup:
ANS: 155,000 of insurable interests - the amount left outstanding on the loan
An "occurrence" is defined as:
ANS: an unexpected event that causes loss.
Replacement Cost Value:
ANS: Under replacement cost valuation, insurers may safeguard the principle of indemnity by requiring
policy holders to replace insured items before making full reparations
Cindy holds an insurance policy from Sine Nomine Insurance. This is not a publicly traded company, and
Cindy can participate in the election of the board, receiving dividends if the company does well. Sine
Nomine Insurance could be best described as a:
ANS: Mutual Insurance Company
Loss of Money invested in the stock market is a
1|P ag e
,2025/2026
ANS: speculative risk
When taking recorded witness statements, the adjuster should
ANS: Remain Objective
Coinsurance Policy
ANS: requires you to have a minimum of 80% minimum, if you do not comply there is a penalty
Coinsurance Penalty Formula
ANS: dividing the amount of coverage one should have by how much they do have.
EX: they should have 80% (96,000) , they do have (40,000). 40,000/96,000= 41.67%
then apply that to the perceived cost of indemnity before the penalty.
12,000 x 41.67% = 5,000
They will receive 5,000 dollars
Standard Fire Policy Pays
ANS: Actual Cash Value
Stan built a porch for his home three years ago at a cost of $10,000. The value of the porch has
depreciated by $6,000, and it would cost $12,000 to replace it today. After Stan's porch burnt down
during a BBQ today, how much would a Standard Fire Policy indemnify Stan for his porch?
ANS: 12,000 - 6,000 = 6,000
he will receive 6,000 because standard fire pays actual cash value
John moved out of his home 3 months ago and put it up for sale. While waiting for it to sell, the pipes
burst and damage the floors due to freezing.
This is not covered
2|P ag e
,2025/2026
ANS: freezing is a covered peril but is excluded if the building is vacant and the insured has not taken
responsible care to maintain heat or shut off the water supply
DP-2 Broad Form covers what under the peril of theft?
ANS: Broken windows caused by the burglar breaking in
Which of the following is covered under a DP-3
a. earthquake
b. flood
c. water backup from sewers
4. Power failure on premises
ANS: Power failure on-premises
In a dwelling policies, coverage D pays for
ANS: Lost Rental Income
If a Florida HO policy has been in effect for fewer than 90 days For nonpayment-related cancelation the
insurer must notify the policyholder at least:
ANS: 10 days before cancelling
If a Florida HO policy has been in effect for fewer than 90 days for any other approved reason the policy
holder must be notified at least
ANS: 20 days before cancelling
The coverage for damage to personal property off-premises is limited to 10% of coverage c's limit in a
DP-2 policy.
ANS: coverage c is 25,000 x 10% = 2,500
2,500 would be off-premise coverage limit
3|P ag e
, 2025/2026
HO-5
ANS: Best coverage policy
A processing and servicing company would qualify for a BOP only if they have less than
ANS: 3 million in annual rev
A "Single Occurrence" on the earthquake and volcanic eruptions for involves any and all eruptions
and/or earthquakes that take place with in a:
ANS: Single 168-hour Policy -7 days
The coverage limit in bob's commercial property policy goes up 2% every time the policy renews. Which
optional coverage might Bob have included as part of his insurance package?
ANS: Inflation Guard
In a BOP, the General Aggregate Limit is:
ANS: x2 / twice the per occurrence limit
Why has pollutant clean up and removal coverage become more popular recently?
ANS: EPA fines and penalties have increased
Strict Liability
ANS: holds a person liable for his actions regardless of how much care he demonstrates
Binder
ANS: Temporary Coverage
After a loss covered under a dwelling policy, ordinance and law, coverage pays for
ANS: Increased repair cost due to laws or codes
4|P ag e
