Florida Insurance Exam Questions with Detailed Verified Answers

Page | 1



Florida Insurance Exam Questions with
Detailed Verified Answers

Question: Risk


Ans: the chance of financial loss


Question: Risk is NOT the loss itself, but the _________ of loss.


Ans: CHANCE


Question: Policy


Ans: a written contract for effecting insurance and includes Clauses, Riders,
endorsements, and papers which are part of the contract


Question: Insurance


Ans: a contract where one undertakes to indemnify another or pay a specific
amount determined on contingencies


Question: Binders


Ans: temporary insurance which can be made orally or written


Question: property insurance

, Page | 2

Ans: where payment is made directly to the insured or other named interest


Question: liability insurance


Ans: where payment is made on behalf of the insured to another


Question: Indemnity contract


Ans: one-party should be put back in the same Financial condition they were
before the loss. Never profit from A Loss.


Question: replacement cost


Ans: given new for old


Question: agreed value


Ans: specific amount agreed in advance


Question: Florida value policy law


Ans: paid limit for total loss


Question: liability


Ans: pays amount that exceeds insured's resources


Question: insurable interest

, Page | 3

Ans: insured would suffer economic loss


Question: peril


Ans: a contingency that may cause a loss example Wind, Fire, theft


Question: hazard


Ans: a condition that increases the likelihood of a loss from a covered peril


Question: physical hazard


Ans: physical characteristics that increase the probability and severity of loss
example ice-covered steps


Question: moral hazard


Ans: intentional loss


example steal from employer


Question: Morale hazard


Ans: accident prone or carelessness example did not lock the car door


Question: proximate cause