Florida Personal Lines Exam Qs & As
With 100% accurate Solutions Scored A+
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. - CORRECT
ANSWER-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 - CORRECT ANSWER-
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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-A.) A friend who is renting a bedroom in
J's house since it is only three blocks away from work
With 100% accurate Solutions Scored A+
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. - CORRECT
ANSWER-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 - CORRECT ANSWER-
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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-A.) A friend who is renting a bedroom in
J's house since it is only three blocks away from work
