Florida General Lines Insurance Exam 2025

5 qualifications to become a General Lines agent – 1. At least 18 years of age 2. United States citizen or legal alien 3. Bona fide resident of Florida 4. Place of business located in Florida 5. Not licensed for purpose of writing controlled business Department of Financial Services (DFS) - 1. Approves issuance of licenses to agents, CR, and adjusters 2. Supervisions of claims 3. Investigate charges of unethical conduct and take judicial actions Office of Insurance Regulation (OIR) – 1. Examines the qualifications of the insurance companies doing business in FL 2. Examines the financial conditions of companies 3. Approves forms, rules, and rates Office of Financial Regulation (OFR) – 1. Provides regulatory oversight to FL's financial providers 2. Reports to the FL Service Commission FL Surplus Lines Service Office – 1. Oversees the surplus lines industry 2. Reviews all surplus lines policies and documents 3. Collects surplus lines and taxes and fees Risk - Chance of financial loss Policy - Is a written contract for effecting insurance and includes clauses, riders, endorsements, and papers which are apart of the contract Insurance - Is a contract where one undertakes to indemnify another or pay a specified amount determined on contingencies Binders - Temporary insurance which can be made orally or written. The insurer shall give 5 days' prior notice of cancelling a binder unless the binder is replace by a policy. No notice is required unless the binder exceeds 60 days. Property Insurance - Where payment is made directly to the insured or other named interest FLORIDA FLORIDA Liability Insurance - Where payment is made on behalf of the insured to another Contract of Adhesion - Parties have unequal bargaining power such as the insured cannot negotiate the terms of the insurer. Ambiguities found in the policy are usually found in favor of the insured. Indemnity Contract - One party should be put back in the same financial condition they were before the loss. Never profit from a loss. Peril - Contingency that may cause a loss Hazard - Condition that increases the likelihood of a loss from a covered peril. Physical Hazard - Physical Characteristics that increases the probability and severity of loss (i.e. Ice-covered steps) Moral Hazard - Intentional Loss (i.e. Intentionally burning down your house to collect insurance payout) Morale Hazard - Accident-prone or carelessness (i.e. Insured drives recklessly because that's what insurance is for) Proximate Cause - A doctrine that states when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all part of the occurrence. Direct Loss - Physical harm to tangible property Indirect Loss - Economic loss which flows as a consequence of the direct loss. Actual Cash Value - The current cost that losses will be settled based on Actual Cash Value Replacement Cost - the actual cost to repair or replace property. Valued Policy - Where the insurer agrees, in advance that the coverage limit applicable to the item will be considered its value. This applies to the item where the ACV or replacement cost is difficult to establish, such as with antiques or fine arts. Values Policy law - States that for a total loss by a covered peril to a building, the insurer must pay the amount provided in the policy for which the premium has been paid. FLORIDA FLORIDA Coinsurance - A method of encouraging the insured to accept the responsibility of insuring for the amount close to the value of the property. Coinsurance is primarily used in commercial policies and values vary from 80 to 100% Specific Insurance - Coverage subject to separate limits such as each building or the content of each building Blanket - A single amount of coverage that applies to two or more coverage items Straight Deductible - Deduction of a flat amount Percentage - Percentage of a loss of the value of the property or a percentage of the policy limits Franchise - No payment is made until the loss equals or exceeds a prescribed amount, then loss paid in full Liability Insurance - policies pay on behalf of the insured all sums the insured becomes legally obligated to pay as damages. It is referred to as a third party claim. Legal Liability - Our rules of law dictate that one must provide reparations to another based on negligence Insured - One who is legally liable Damages - Money amounts Subrogation - When an insured transfers rights to the insurer to collect damages after the insurance company pays claims Assignment - Clause specifies that transferring the policy to another will not be valid unless the insurer consents in writing Pro rata - When there is multiple insurers, companies will pay its proportionate part Equal Shares - Contributions based on the number of policies without regard to limit Primary - Policy applies first up to the limit before other apply Excess - All other insurance must be exhausted before the policy applies Liberalization - States that when the insurer adopts a revision that would broaden coverage in other similar policies, then the insured receives the