FLORIDA PERSONAL LINES LATEST UPDATED EXAMINATION
QUESTIONS WITH VERIFIED A+ ANSWERS
Which of the following is LEAST likely to be a factor when determining the eligibility of a person for
property insurance?
A.) The claims history showing when prior claims occurred and how much was paid to settle the claim.
B.) The nature of the risk, such as the type of building and the number of families living in the
building.
C.) Existence of any hazards, such as nearby environmental risks
D.) Whether the premium will be paid in full or billed to the insured.
D.) Whether the premium will be paid in full or billed to the insured.
Underwriting considers the nature of the risk, hazards, present, and claims history. How the premium
will be paid is not a favor in the determining an applicants eligibility for insurance.
M and C both have Personal Auto policies with liability limits of 20/30/10. If M borrows C's car and
injures a pedestrian, causing injuries that will cost $5,000 to treat, which policy will provide coverage
for the injured party?
A.) Both policies will share the loss on a pro rata basis.
B.) M's policy
C.) C's policy
D.) Neither policy, since C's car is not scheduled on M's policy
C.) C's policy
Under personal auto policies, the auto owner's coverage is primary insurance, and coverage for non-
owned autos is excess insurance. Since C is the owner, C's policy will cover the loss first, and M's policy
will provide excess insurance if necessary. This condition is established in the "Other Insurance"
condition of both policies.
M has a liability insuring M's flower shop. After M sells the shop, the buyer asks if M can transfer the
liability policy as part of the sale. Which condition prevents M from making this transfer without the
insurer's consent?
A.) Assignment
,B.) Liberalization
C.) Assumption of Risk
D.) Subrogation
A.) Assignment
The assignment condition states a policy holder cannot transfer policy ownership without the insurer's
written consent
Which of the following is not a function of insurance?
A.) To protect against uncertainty and reduce anxiety
B.) To transfer risk from the insured to the insurer
C.) To exchange a small certain expense for a large uncertain loss
D.) To act as an investment vehicle for the insured
D.) To act as an investment vehicle for the insured
Investment entails speculative risk, which is not Insurable
K has an unendorsed Special Form Homeowners policy with a $200,000 limit of personal liability, and
a Personal Umbrella Liability policy with a $1 million limit. A suit is brought against K by a local
business, claiming that K slandered the the business on social media and caused business to decline.
How will K's Personal Umbrella Liability policy respond?
A). The policy will only pay damages owed to the business that are in excess of $200,000
B.) The policy drops down to act as primary insurance, and K must pay a self-insured retention
C.) The policy does not cover claims made against K for personal injury
D.) Any damages covered by the policy as excess insurance will be subject to a high deductible that K
must pay
B.) The policy drops down to act as primary insurance, and K must pay a self-insured retention.
Because personal injury coverage is NOT provided by the homeowners policy, the coverage provided by
,the umbrella policy drops down to act as primary insurance, requiring the insurer to pay the policy's self-
insured retention. The umbrella insurer will pay for the defense causes.
Coverage D of a dwelling policy covers which of the following losses?
A.) Loss if rental income due to the cancellation of a lease
B.) Access prevented by a civil authority because of a neighboring location's direct loss by a peril
covered under the insured's policy
C.) Additional living expenses after a covered loss
D.) Damage to a swimming pool
B.) Access prevented by a civil authority because of a neighboring location's direct loss by a peril covered
under the insured's policy
Coverage D- Fair Rental Value includes coverage for the indirect loss of access prevented by a civil
authority due to the direct physical loss of a neighboring property by a covered peril. Coverage D will not
provide coverage for lease cancellation.
Additional living expenses are provide by Coverage E.
J has a Homeowners policy written on the HO-3 form. Which of the following people would not be
considered an insured on J's policy?
A.) A friend who is renting a bedroom in J's house since it is only three blocks away from work
B.) A friend's 16-year old daughter who is staying with J's family while going to school
C.) J's daughter away at college in another state
D.) J's resident uncle
A.) A friend who is renting a bedroom in J's house since it is only three blocks away from work
The definition of insured included in the policy does not include tenant's so the friend would not be
covered under J's policy. The friend would need their own insurance for a personal property and liability.
Unrelated people in the insured's care are considered the insureds up to age 21.
A lender who finances an auto loan could receive claim payments under which policy condition?
A.) Loss Payment
B.) Mortgage Clause
, C.) Loss Settlement
D.) Loss Payable Clause
D.) Loss Payable Clause
The loss payable condition protects a loss payee's interest in property, such as a creditor, lender, or
leinholder. The loss payee will be the first to receive claim payments in the event of a covered loss.
As part of holding a Florida surplus lines agent license, all surplus lines agents must:
A.) Satisfy the applicable seasoning requirements
B.) Be a member of the Surplus Lines Service Office Association
C.) Hold a property casualty license
D.) Hold the CPCU designation
B.) Be a member of the Surplus Lines Service Office Association
As part of holding a Florida Surplus Lines Agent must be a member of the Surplus Lines Service
Association. There is no requirement to be licensed in property casualty, hold a CPCU designation, or
seasoning.
J owns a home protected by a property insurance policy. A severe windstorm creates an opening in
the roof that exposes the upstairs guest suite in J's home and causes rain damage to the carpet. In
order to collect claim payments from the carrier for the damaged roof, J is required to:
A.) Tarp the roof to protect the roof and the guest suite from further damage
B.) Do nothing until the carrier can conduct an inspection
C.) Notify the homeowners association of the incident
D.) Repair the roof within 60 days of the loss and before notifying the carrier of the loss
A.) Tarp the roof to protect the roof and the guest suite from further damage
Under the Duties in the Event of Loss Condition, J is required to protect property from further damage.
Doing nothing to the roof exposes the roof and the interior to further weather damage that would not
be covered by a property policy, and immediately making full repairs impedes the carrier's ability to
inspect the damage and calculate the appropriate loss payment.
QUESTIONS WITH VERIFIED A+ ANSWERS
Which of the following is LEAST likely to be a factor when determining the eligibility of a person for
property insurance?
A.) The claims history showing when prior claims occurred and how much was paid to settle the claim.
B.) The nature of the risk, such as the type of building and the number of families living in the
building.
C.) Existence of any hazards, such as nearby environmental risks
D.) Whether the premium will be paid in full or billed to the insured.
D.) Whether the premium will be paid in full or billed to the insured.
Underwriting considers the nature of the risk, hazards, present, and claims history. How the premium
will be paid is not a favor in the determining an applicants eligibility for insurance.
M and C both have Personal Auto policies with liability limits of 20/30/10. If M borrows C's car and
injures a pedestrian, causing injuries that will cost $5,000 to treat, which policy will provide coverage
for the injured party?
A.) Both policies will share the loss on a pro rata basis.
B.) M's policy
C.) C's policy
D.) Neither policy, since C's car is not scheduled on M's policy
C.) C's policy
Under personal auto policies, the auto owner's coverage is primary insurance, and coverage for non-
owned autos is excess insurance. Since C is the owner, C's policy will cover the loss first, and M's policy
will provide excess insurance if necessary. This condition is established in the "Other Insurance"
condition of both policies.
M has a liability insuring M's flower shop. After M sells the shop, the buyer asks if M can transfer the
liability policy as part of the sale. Which condition prevents M from making this transfer without the
insurer's consent?
A.) Assignment
,B.) Liberalization
C.) Assumption of Risk
D.) Subrogation
A.) Assignment
The assignment condition states a policy holder cannot transfer policy ownership without the insurer's
written consent
Which of the following is not a function of insurance?
A.) To protect against uncertainty and reduce anxiety
B.) To transfer risk from the insured to the insurer
C.) To exchange a small certain expense for a large uncertain loss
D.) To act as an investment vehicle for the insured
D.) To act as an investment vehicle for the insured
Investment entails speculative risk, which is not Insurable
K has an unendorsed Special Form Homeowners policy with a $200,000 limit of personal liability, and
a Personal Umbrella Liability policy with a $1 million limit. A suit is brought against K by a local
business, claiming that K slandered the the business on social media and caused business to decline.
How will K's Personal Umbrella Liability policy respond?
A). The policy will only pay damages owed to the business that are in excess of $200,000
B.) The policy drops down to act as primary insurance, and K must pay a self-insured retention
C.) The policy does not cover claims made against K for personal injury
D.) Any damages covered by the policy as excess insurance will be subject to a high deductible that K
must pay
B.) The policy drops down to act as primary insurance, and K must pay a self-insured retention.
Because personal injury coverage is NOT provided by the homeowners policy, the coverage provided by
,the umbrella policy drops down to act as primary insurance, requiring the insurer to pay the policy's self-
insured retention. The umbrella insurer will pay for the defense causes.
Coverage D of a dwelling policy covers which of the following losses?
A.) Loss if rental income due to the cancellation of a lease
B.) Access prevented by a civil authority because of a neighboring location's direct loss by a peril
covered under the insured's policy
C.) Additional living expenses after a covered loss
D.) Damage to a swimming pool
B.) Access prevented by a civil authority because of a neighboring location's direct loss by a peril covered
under the insured's policy
Coverage D- Fair Rental Value includes coverage for the indirect loss of access prevented by a civil
authority due to the direct physical loss of a neighboring property by a covered peril. Coverage D will not
provide coverage for lease cancellation.
Additional living expenses are provide by Coverage E.
J has a Homeowners policy written on the HO-3 form. Which of the following people would not be
considered an insured on J's policy?
A.) A friend who is renting a bedroom in J's house since it is only three blocks away from work
B.) A friend's 16-year old daughter who is staying with J's family while going to school
C.) J's daughter away at college in another state
D.) J's resident uncle
A.) A friend who is renting a bedroom in J's house since it is only three blocks away from work
The definition of insured included in the policy does not include tenant's so the friend would not be
covered under J's policy. The friend would need their own insurance for a personal property and liability.
Unrelated people in the insured's care are considered the insureds up to age 21.
A lender who finances an auto loan could receive claim payments under which policy condition?
A.) Loss Payment
B.) Mortgage Clause
, C.) Loss Settlement
D.) Loss Payable Clause
D.) Loss Payable Clause
The loss payable condition protects a loss payee's interest in property, such as a creditor, lender, or
leinholder. The loss payee will be the first to receive claim payments in the event of a covered loss.
As part of holding a Florida surplus lines agent license, all surplus lines agents must:
A.) Satisfy the applicable seasoning requirements
B.) Be a member of the Surplus Lines Service Office Association
C.) Hold a property casualty license
D.) Hold the CPCU designation
B.) Be a member of the Surplus Lines Service Office Association
As part of holding a Florida Surplus Lines Agent must be a member of the Surplus Lines Service
Association. There is no requirement to be licensed in property casualty, hold a CPCU designation, or
seasoning.
J owns a home protected by a property insurance policy. A severe windstorm creates an opening in
the roof that exposes the upstairs guest suite in J's home and causes rain damage to the carpet. In
order to collect claim payments from the carrier for the damaged roof, J is required to:
A.) Tarp the roof to protect the roof and the guest suite from further damage
B.) Do nothing until the carrier can conduct an inspection
C.) Notify the homeowners association of the incident
D.) Repair the roof within 60 days of the loss and before notifying the carrier of the loss
A.) Tarp the roof to protect the roof and the guest suite from further damage
Under the Duties in the Event of Loss Condition, J is required to protect property from further damage.
Doing nothing to the roof exposes the roof and the interior to further weather damage that would not
be covered by a property policy, and immediately making full repairs impedes the carrier's ability to
inspect the damage and calculate the appropriate loss payment.
