Florida Property & Casualty Insurance License, Practice Exams

For a renter (HO-4), which Section I coverage is the primary coverage?

1. Coverage A — Dwelling
2. Coverage C — Personal Property ✓
3. Coverage D only
4. Coverage B — Other Structures

Why: For tenants, Coverage C — Personal Property is the centerpiece of Section I, since the renter does not own the building.

A Named Non-Owner policy is appropriate for a person who:

1. Operates a livery or taxi service and needs liability coverage for the passengers carried for a fee
2. Wants comprehensive coverage only on a classic car kept in storage and never driven on public roads
3. Owns several commercial trucks and wants a single policy covering the entire fleet's liability exposure
4. Does not own an auto but regularly drives borrowed or rented vehicles and needs liability coverage ✓

Why: A named non-owner policy provides liability (and related) coverage to an individual who does not own a vehicle but drives others' or rented cars.

In the Homeowners policy, the term 'insured location' generally includes all of the following EXCEPT:

1. Other premises acquired during the policy period for use as a residence
2. The residence premises
3. A commercial warehouse rented to a third party ✓
4. Vacant land owned by the insured

Why: Insured location includes the residence premises, newly acquired residences, vacant land, and certain other personal-use premises, but not a separately rented commercial property.

Under Florida's anti-fraud provisions, a person commits a "fraudulent insurance act" when the person:

1. Files a complaint with the department alleging that an insurer delayed payment of a claim
2. Negligently submits an application containing an incomplete answer, with no intent to deceive the insurer or its agent
3. Knowingly and with intent to defraud presents, or prepares with knowledge it will be presented, false information to an insurer ✓
4. Cancels a policy during the 14-day free-look period and asks for a full refund

Why: A fraudulent insurance act requires knowingly and with intent to defraud presenting, causing to be presented, or preparing (with knowledge or belief it will be presented) false or misleading information to an insurer or similar entity.

Under the liberalization clause, if the insurer broadens coverage during the policy term without additional premium:

1. The broadened form applies only to policies written on or after its effective date
2. The insured must request an endorsement and pay additional premium to obtain it
3. The broadened coverage automatically applies to the existing policy ✓
4. The policy is rewritten at the next renewal

Why: The liberalization clause automatically extends any coverage-broadening change to existing policies at no extra cost.

Which Part of the Workers Compensation and Employers Liability Policy sets out the insured's responsibilities, such as notifying the insurer promptly of an injury and cooperating in the investigation?

1. Part Four ✓
2. Part One
3. Part Three
4. Part Two

Why: Part Four — Your Duties If Injury Occurs lists the insured's obligations, including prompt notice, providing information, and cooperating with the insurer.

A producer was convicted years ago of a felony involving embezzlement (a crime of dishonesty). To continue working in insurance, federal law (18 U.S.C. 1033) requires that the producer:

1. Give written notice to the agency's compliance officer
2. Wait until a court seals or expunges the conviction record, at which point the federal bar lifts automatically
3. Obtain written consent from the state insurance regulatory official ✓
4. Renew the state producer license on its normal schedule

Why: Under 18 U.S.C. 1033, a person convicted of a felony involving dishonesty cannot work in insurance affecting interstate commerce without written consent from the appropriate insurance regulator.

Which type of business is typically ELIGIBLE for a Businessowners Policy?

1. A large oil refinery
2. A bank with high cash exposure
3. A small retail store or office ✓
4. An interstate trucking fleet

Why: BOPs are designed for eligible smaller risks such as retail stores, offices, apartments, and similar businesses; large manufacturers and certain high-hazard risks are ineligible.

Under the Homeowners policy, the policy period and territory generally cover losses occurring:

1. Anywhere in the world for property losses, with liability confined to the United States mainland
2. Only while the property is inside the described dwelling, since off-premises losses need an endorsement
3. Only during hours the insured is present at the residence, as the policy suspends while it is unoccupied
4. During the policy period within the coverage territory (U.S., its territories, and Canada) ✓

Why: Coverage applies to losses during the policy period within the policy territory, commonly the United States, its territories and possessions, and Canada.

Impairment income benefits are payable for a duration computed at what rate relative to the impairment rating?

1. 5 weeks for each percentage point of impairment
2. 1 week for each percentage point of impairment
3. 2 weeks for each percentage point of impairment
4. 3 weeks for each percentage point of impairment ✓

Why: Section 440.15(3)(c) provides that entitlement continues for a period computed at the rate of 3 weeks for each percentage point of impairment.

Under the PAP, sound-reproducing equipment that IS permanently installed by the manufacturer is:

1. Covered under Part D physical damage as part of the auto ✓
2. Covered only under Part B if damaged in an accident causing injury
3. Never covered, as electronics are excluded
4. Excluded under Part D as added equipment

Why: Factory or permanently installed original equipment is part of the covered auto under Part D; the limitation targets certain aftermarket/added electronic equipment.

'Premises and operations' exposure under the CGL refers to:

1. Liability arising out of the insured's premises and ongoing business operations ✓
2. Liability for defective work discovered after the job is finished and accepted
3. Liability the insured takes on by signing a hold-harmless agreement
4. Liability for goods the insured manufactures and sells to the public

Why: Premises and operations covers liability from the insured's location and its ongoing (in-progress) operations.

A Businessowners Policy (BOP) is best described as:

1. A package policy combining property and liability for small to medium businesses ✓
2. A monoline liability policy sold separately from any property coverage the insured buys
3. A policy available only to large manufacturers with multiple plant locations nationwide
4. An ocean marine form covering cargo shipped internationally by vessel and aircraft

Why: A BOP is a prepackaged policy combining property and liability coverage designed for eligible small and medium-sized businesses.

A Farm Coverage Form generally combines:

1. Coverage for the dwelling, farm personal property, and farm structures ✓
2. Workers compensation benefits for the farm's hired laborers together with statutory employers liability limits
3. Only the liability arising out of the farming operation, with no property coverage on the dwelling or the barns
4. Ocean marine cargo on crops moving to market and personal auto coverage on the farm's pickup trucks

Why: The Farm Coverage Form can combine coverage for the farm dwelling, household personal property, farm personal property (including livestock and machinery), and farm buildings/structures.

Under §440.15, temporary disability (total or partial) benefits are generally limited to a maximum of how many weeks?

1. 52 weeks
2. 208 weeks
3. 104 weeks ✓
4. 260 weeks

Why: Section 440.15(2)(a) caps temporary total disability at 104 weeks, and §440.15(4)(e) applies the same 104-week limit to temporary partial disability.

A large corporation sets aside its own funds in a formal program to pay for its own anticipated losses rather than buying insurance. This is:

1. Coinsurance
2. Reinsurance
3. Reciprocal insurance
4. Self-insurance ✓

Why: Self-insurance is a formal retention program in which an entity sets aside funds to pay its own losses instead of transferring the risk.

Which CGL limit is the most that will be paid for the sum of all damages because of bodily injury and property damage arising out of any one occurrence?

1. Each Occurrence Limit ✓
2. Products-Completed Operations Aggregate
3. Personal and Advertising Injury Limit
4. General Aggregate Limit

Why: The Each Occurrence Limit caps total BI and PD damages (plus medical payments) for a single occurrence.

Under section 626.207, a felony involving moral turpitude that is not subject to the permanent bar generally carries what disqualifying period?

1. A 5-year disqualifying period
2. A 20-year disqualifying period
3. A 7-year disqualifying period
4. A 15-year disqualifying period ✓

Why: Section 626.207(3)(a) imposes a 15-year disqualifying period for felonies involving moral turpitude not within the permanent bar.

The intentional relinquishment of a known right by the insurer is called a:

1. Abandonment
2. Subrogation
3. Estoppel
4. Waiver ✓

Why: A waiver is the voluntary giving up of a known right; estoppel may then prevent the insurer from asserting that right later.

A policy that contains only one coverage part is best described as:

1. A package policy
2. A reporting form
3. A monoline policy ✓
4. An umbrella policy

Why: A monoline policy provides only one type of coverage; combining two or more coverage parts creates a package policy.

A trucking company hauling hazardous materials across state lines must meet federal minimum liability amounts that are:

1. Identical for every commodity hauled interstate
2. Generally higher than for non-hazardous freight due to greater public risk ✓
3. Set below the general freight minimum, since tankers run fewer miles
4. Waived entirely for carriers running fewer than five trucks

Why: Federal financial responsibility minimums are tiered by cargo hazard, with higher required limits for hazardous materials than for ordinary property.

For a property insurance policy, when must the insured generally have an insurable interest?

1. At the time of loss (typically), and arguably at policy inception ✓
2. Only at the time of the loss, and never at any earlier point
3. Never - insurable interest is a life insurance requirement and has no application to property
4. Only at the time the policy is purchased, and never afterwards

Why: In property insurance, insurable interest must exist at the time of loss because the policy indemnifies actual financial loss to the property. Many insurers also expect it at inception.

Pet insurance is generally classified as a form of:

1. Crop insurance, since animals raised for household purposes are treated as agricultural production units
2. Property and casualty inland marine/health-type coverage reimbursing veterinary expenses ✓
3. A surety bond under which the treating veterinarian guarantees recovery and the insurer pays if treatment fails
4. Workers compensation coverage extended to service and working animals

Why: Pet insurance reimburses veterinary expenses for illness or injury and is offered as a specialty personal-lines product.

A Homeowners insured suffers theft of firearms. The special Coverage C limit for theft of firearms is commonly:

1. $2,500 ✓
2. $200
3. $5,000
4. $1,500

Why: Theft of firearms is subject to a special sublimit (commonly $2,500) under Coverage C; collections worth more should be scheduled.

Under the Florida Insurance Guaranty Association (FIGA) statute, the general obligation for each covered claim (other than the homeowner's structure/contents enhancement) is limited to an amount less than:

1. $300,000 ✓
2. $100,000
3. $1,000,000
4. $500,000

Why: §631.57(1)(a)2. limits FIGA's obligation to each covered claim that is less than $300,000.

A statement that is guaranteed to be true and becomes part of the contract is a:

1. Concealment
2. Representation
3. Warranty ✓
4. Waiver

Why: A warranty is a statement that is guaranteed true and becomes part of the policy; its breach can void coverage.

Employment Practices Liability Insurance (EPLI) covers claims such as:

1. Defects in the products the insured manufactures that injure a consumer
2. Damage to premises the insured rents, caused by a fire it started
3. Wrongful termination, discrimination, harassment, and retaliation by employees ✓
4. Bodily injury to a customer who trips over a floor display inside the insured's retail store

Why: EPLI responds to employment-related claims like discrimination, harassment, wrongful termination, and retaliation.

An appointing entity learns that one of its appointed agents has pleaded nolo contendere to a felony. Within how many days must the entity advise the department in writing?

1. Within 45 days
2. Within 30 days
3. Within 60 days
4. Within 15 days ✓

Why: Section 626.451(4) requires the appointing entity to advise the department in writing within 15 days after becoming aware the appointee pleaded guilty or nolo contendere to or was found guilty of a felony.

How does a Combined Single Limit (CSL) differ from split limits in auto liability coverage?

1. CSL doubles the per-person bodily injury limit at no charge
2. CSL applies only to property damage claims per accident
3. CSL excludes bodily injury, covering only the insured's own losses
4. CSL provides one total limit for both BI and PD combined per accident ✓

Why: A combined single limit provides a single dollar amount that applies to the total of bodily injury and property damage liability arising from one accident.

The National Flood Insurance Program (NFIP) is administered by which federal agency?

1. The U.S. Department of Agriculture
2. The Department of Housing and Urban Development
3. The Small Business Administration
4. The Federal Emergency Management Agency (FEMA) ✓

Why: The NFIP is administered by FEMA, an agency within the Department of Homeland Security.

Two insurers enter into a concerted agreement intended to create an unreasonable restraint of trade in the business of insurance. Which unfair trade practice does this describe?

1. False statements and entries
2. Unfair discrimination
3. Boycott, coercion, and intimidation ✓
4. Defamation

Why: Boycott, coercion, and intimidation is entering into any agreement to commit, or by concerted action committing, any act of boycott, coercion, or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.

Under the FCRA, a consumer who is the subject of an adverse action based on a consumer report has the right to:

1. Demand a copy of the producer's license and appointment before the file is reopened
2. Receive the policy at the originally quoted rate while the dispute is pending
3. Sue the Federal Trade Commission for damages caused by the reporting agency
4. Obtain a free copy of the report and dispute inaccurate information ✓

Why: The FCRA gives consumers the right to a free copy of the report that led to an adverse action and the right to dispute inaccurate or incomplete information.

Because Florida is a No-Fault state, an injured party may sue in tort for pain and suffering only if the injury meets a threshold. Which of the following satisfies that threshold?

1. Any absence from work of more than 14 days following the date of the crash
2. Any injury that generates more than $2,500 in reasonable and necessary medical bills
3. Permanent injury within a reasonable degree of medical probability ✓
4. Any injury requiring medical treatment within 14 days of the motor vehicle crash

Why: Section 627.737(2) permits tort recovery for pain and suffering only for significant/permanent loss of an important bodily function, permanent injury, significant/permanent scarring or disfigurement, or death.

Many WC laws include a 'retroactive' provision tied to the waiting period. This means that if a disability lasts beyond a specified time, the worker:

1. Receives medical benefits only for the days in the waiting period
2. Forfeits the waiting-period days permanently, since the statute treats them as an uninsured deductible borne by the worker
3. Must file a new claim petition with the state board to restart benefits
4. Is paid benefits back to the date of injury, including the waiting period ✓

Why: Under a retroactive provision, if the disability continues beyond a set number of days, the worker is paid wage benefits retroactively, including for the initial waiting period.

Bodily injury caused by a defect in a product after it has left the insured's possession is subject to which aggregate limit?

1. General Aggregate Limit
2. Products-Completed Operations Aggregate Limit ✓
3. Damage to Premises Rented Limit
4. Personal and Advertising Injury Limit

Why: Products and completed operations losses are capped by the separate Products-Completed Operations Aggregate.

The Personal Injury endorsement adds coverage for offenses such as:

1. Libel, slander, false arrest, and invasion of privacy ✓
2. Mechanical breakdown of household appliances
3. Flood losses to the dwelling
4. Earthquake damage to the foundation

Why: The personal injury endorsement broadens liability to include offenses like libel, slander, defamation, false arrest, and invasion of privacy, which are otherwise excluded.

Lloyd's of London is best described as:

1. A stock insurance company owned by shareholders and chartered in England
2. A marketplace where syndicates of individuals and corporations provide insurance ✓
3. A government reinsurance pool established to backstop catastrophe losses in the United Kingdom
4. A mutual insurer owned by the policyholders who buy its contracts

Why: Lloyd's is not an insurer itself but a marketplace where syndicates of members assume insurance risk.

Multiple Peril Crop Insurance (MPCI) typically covers:

1. Liability for injuries to farm visitors and to seasonal workers hired for the harvest
2. Hail damage only, measured per acre
3. A broad range of natural causes of crop loss such as drought, flood, and disease ✓
4. Fire damage to barns and outbuildings only

Why: MPCI is a comprehensive policy covering yield losses from many natural perils including drought, excess moisture, freeze, and disease.

Job classification codes in workers' compensation are used to:

1. Record the state in which the employee's home office sits, so that benefits follow that state's schedule
2. Group jobs by their expected loss exposure to set appropriate rates ✓
3. Set the dollar amount of death benefits payable to a surviving spouse and dependent children
4. Determine how many days a worker must be disabled before indemnity benefits begin

Why: Classification codes group occupations by similar hazard/loss potential so that a rate reflecting that exposure can be applied to the payroll in each class.

Storing oily rags near a furnace is an example of which type of hazard?

1. Speculative hazard
2. Moral hazard
3. Physical hazard ✓
4. Morale hazard

Why: A physical hazard is a tangible condition of property or environment that increases the chance of loss, such as flammable materials near a heat source.

A building has $400,000 ACV and 80% coinsurance. The insured carries $240,000 and suffers a total loss. Ignoring deductible, the insurer pays:

1. $240,000 ✓
2. $400,000
3. $180,000
4. $320,000

Why: Required = 80% x $400,000 = $320,000. Penalty factor = $240,000/$320,000 = 0.75, but recovery is also capped at the $240,000 policy limit, so the most paid is $240,000.

How does a corporate officer elect to be exempt from the Workers' Compensation Law in Florida?

1. Automatically, because every corporate officer is excluded from the definition of employee
2. By an oral agreement with the carrier when the policy is bound
3. By filing a notice of election of exemption with the Department of Financial Services ✓
4. By omitting the officer's name from the payroll records the carrier audits

Why: Under §440.02(18)(b) and §440.05, an officer may elect exemption only by filing notice of the election with the department; the officer remains an employee until an effective notice is filed.

Under the PAP, fire damage to the covered auto while parked in a garage is covered under:

1. Other Than Collision (comprehensive) ✓
2. Collision coverage under Part D of the pap
3. Liability coverage under Part A
4. Not covered without an endorsement

Why: Fire is a peril insured under Other Than Collision (comprehensive) coverage in Part D.

Under the PAP, who qualifies as an insured under Part B — Medical Payments?

1. Any person injured in the accident, including occupants of the other vehicle and bystanders who witnessed the crash
2. The named insured and family members (in any auto or as pedestrians) and other occupants of the covered auto ✓
3. Only persons holding a valid driver's license at the time of the crash, so unlicensed passengers collect nothing
4. Only the named insured, and only while occupying the auto shown in the Declarations

Why: Part B insureds are the named insured and family members while occupying or struck as pedestrians, plus any other person occupying the covered auto.

An insurer may limit PIP reimbursement using the statutory schedule of maximum charges only if the policy includes what?

1. A separate waiver signed by the insured, each time a medical bill is submitted, agreeing that the insurer may limit payment under the schedule
2. A notice at issuance or renewal that the insurer may limit payment under the fee schedule ✓
3. A court order authorizing the reduction
4. Written approval from the injured party's treating physician before any schedule-based reduction is taken

Why: Section 627.736(5)(a)5. permits schedule-based limits only if the policy includes a notice at issuance or renewal that the insurer may limit payment under the specified schedule.

Errors and omissions (E&O) insurance protects a producer against:

1. Flood damage to the agency building and to the client files stored in its basement records room
2. Physical damage to the producer's own car while driving between client appointments, including collision and theft losses
3. Health expenses of the producer and the agency staff
4. Liability arising from negligent acts, errors, or omissions in providing professional insurance services ✓

Why: E&O coverage responds to claims that the producer was professionally negligent, such as failing to obtain requested coverage, and is a key protection against the producer's professional liability exposure.

The Terrorism Risk Insurance Act (TRIA) functions as:

1. A federally funded program that pays terrorism losses directly to victims once private coverage is exhausted
2. A federal backstop that shares the cost of losses from certified acts of terrorism with insurers ✓
3. A state residual market pool that assigns terrorism risks among the insurers admitted in that state
4. A private reinsurance company chartered by Congress

Why: TRIA created a federal program in which the government shares insured losses from certified acts of terrorism, providing a backstop above an insurer's deductible.

Which is an example of a direct loss?

1. Fire damage to the structure of a building ✓
2. Loss of rental income after a fire
3. Extra expense to operate at a temporary location
4. Spoiled food after a power outage

Why: Direct loss is immediate physical damage to property; the fire damage to the structure is direct, while income/expense impacts are indirect.

Under PAP Part B, a family member struck by a car while walking across the street is:

1. Covered only if the striking vehicle was uninsured, since Part B follows the tortfeasor
2. Not covered, because Part B reaches only persons occupying the covered auto
3. Covered, since family members are insureds for medical payments as pedestrians struck by an auto ✓
4. Covered only under Part A liability, once fault is established against the driver

Why: Part B covers the named insured and family members as pedestrians when struck by a motor vehicle, in addition to occupants of the covered auto.

Under s. 626.989, the fraud-investigation powers of the department or its Division of Criminal Investigations include the authority to:

1. Approve policy forms and endorsements before an insurer may use them in this state
2. Set the premium rates charged for lines the division identifies as fraud-prone
3. Issue insurance licenses to qualified applicants
4. Administer oaths, request witness attendance, and collect evidence ✓

Why: In investigating a fraudulent insurance act or a violation of s. 626.9541 or s. 817.234, the department may administer oaths and affirmations, request the attendance of witnesses, and collect evidence.

For a property owner to be eligible to purchase NFIP flood insurance, the property must be located in:

1. A coastal county
2. A federally declared disaster area
3. A community that participates in the NFIP ✓
4. A state with a FAIR Plan

Why: NFIP coverage is only available in communities that have agreed to adopt and enforce floodplain management ordinances and thus participate in the program.

If an insurer's investigation of a residential property claim involves a physical inspection of the property, §627.70131 requires that inspection to be conducted within how many days after receipt of the proof-of-loss statements?

1. 30 days ✓
2. 7 days
3. 14 days
4. 60 days

Why: §627.70131(3)(b) requires the insurer to conduct a physical inspection within 30 days after receiving the proof-of-loss statements.

Part A of the PAP provides coverage for:

1. Damage to the insured's own auto from collision or other than collision
2. Medical payments to occupants of the insured auto regardless of who was at fault
3. Bodily injury and property damage liability the insured becomes legally responsible for ✓
4. Theft of the insured vehicle and its contents

Why: Part A — Liability covers bodily injury and property damage for which an insured becomes legally liable due to an auto accident.

Under §627.70132, for a claim resulting from a hurricane, the 'date of loss' from which the notice period runs is:

1. The date the policyholder discovers the damage
2. The date the insurer inspects the property
3. The date the claim is filed
4. The date the hurricane made landfall ✓

Why: §627.70132(3) sets the date of loss for a hurricane as the date the hurricane made landfall.

Which CGL condition requires the insured to notify the insurer of an occurrence 'as soon as practicable'?

1. The Separation of Insureds condition, which treats each insured separately
2. The Premium Audit condition, which sets the final premium after the term ends
3. The Other Insurance condition governing pro rata sharing
4. The Duties in the Event of Occurrence, Offense, Claim or Suit condition ✓

Why: The duties condition requires prompt notice of an occurrence or claim and cooperation with the insurer.

In a policy with more than one named insured, the 'first named insured' is generally responsible for:

1. Personally defending any lawsuit brought against a co-insured before the insurer's duty to defend attaches
2. Nothing beyond the duties of any other named insured
3. Adjusting and settling every claim, since the other named insureds may not deal directly with the adjuster
4. Paying premiums and receiving cancellation notices, and may act on behalf of others ✓

Why: The first named insured has specific duties and rights, such as paying premiums, receiving notices, and requesting changes on behalf of all insureds.

An insurer pulls a credit-based report on an applicant to underwrite an auto policy. Under the FCRA this is permitted because the insurer has:

1. Signed authorization from three neighbors willing to vouch for the applicant's driving history
2. A permissible purpose (underwriting the consumer's insurance) ✓
3. A federal subpoena issued by a United States district court before any credit file may be released
4. A standing court order, which the FCRA makes the only lawful route to any consumer's credit file

Why: The FCRA allows access to consumer reports for a permissible purpose, which includes underwriting insurance involving the consumer.

Under section 626.0428, an employee at a designated branch of an agency may NOT do which of the following unless licensed and appointed as an agent or customer representative?

1. Greet customers at the front desk
2. File completed policy paperwork
3. Answer the agency telephone
4. Bind insurance coverage ✓

Why: Section 626.0428(2) prohibits an unlicensed branch employee from binding insurance coverage.

Because WC premium depends on actual payroll, which the insurer estimates at the start of the term, what process is performed after the policy period to determine final premium?

1. An experience modification
2. A residual market assignment
3. A premium audit ✓
4. A loss reserve study

Why: A premium audit reviews the insured's actual payroll records after the policy period so the final premium can be adjusted up or down from the estimate.

A binder provides:

1. Permanent coverage that stays in force until the insured cancels it
2. A refund of the deposit premium if the application is declined
3. Temporary evidence of coverage until the policy is issued ✓
4. A promise to defend the applicant against any suit filed before issuance

Why: A binder is temporary proof of insurance that provides coverage until the formal policy is issued.

The appraisal condition in a property policy is used to resolve disputes over:

1. Policy cancellation
2. Liability to third parties
3. The amount or value of the loss ✓
4. Whether the loss is covered

Why: Appraisal is a method to resolve disagreements over the amount/value of a loss, not whether coverage applies; each party selects an appraiser and they choose an umpire.

An 'impairment rating' in workers' compensation is used primarily to:

1. Decide which state's compensation law governs a multistate claim
2. Measure the degree of permanent loss of function for benefit determination ✓
3. Set the employer's premium classification code from its payroll
4. Calculate the experience modification factor applied to the employer's manual premium

Why: An impairment rating, often expressed as a percentage, measures the extent of permanent physical impairment and is used to determine permanent disability benefits.

Which of the following is NOT one of the four elements required to prove a negligent act?

1. Intent to cause harm ✓
2. A breach of that duty
3. Proximate cause
4. A legal duty owed

Why: Negligence requires duty, breach, proximate cause, and damages. Intent is not required—an intentional act is a different category (an intentional tort).

Under §215.555, an insurer may elect a Cat Fund reimbursement coverage level of which of the following (plus 5% for loss adjustment expenses)?

1. 45%, 75%, or 90% of losses above its retention ✓
2. 25%, 50%, or 75% of the losses above its retention
3. 10%, 20%, or 30% of the insurer's total hurricane losses
4. 50% or 100% of losses above its retention, at the insurer's option

Why: §215.555(4)(b) allows the insurer to elect reimbursement of 45%, 75%, or 90% of its losses from each covered event above its retention, plus 5% for loss adjustment expenses.

Insurers must offer a PIP policyholder the option to exclude which coverage, resulting in a premium reduction, under s. 627.739(3)?

1. Medical benefits for services rendered by a licensed hospital or physician
2. Loss of gross income and loss of earning capacity (lost wages) ✓
3. Death benefits of $5,000 payable to the estate
4. Emergency ambulance and transportation benefits

Why: Section 627.739(3) requires insurers to offer coverage that, at the named insured's election, excludes the loss-of-income and loss-of-earning-capacity benefits of s. 627.736(1)(b).

In a liability policy, an 'occurrence' is best described as:

1. Any intentional act by the insured that results in injury or damage
2. An accident, including continuous or repeated exposure to harmful conditions ✓
3. A scheduled loss of a kind specifically listed on the declarations page
4. A single instantaneous event, so that repeated exposure is excluded

Why: An occurrence is defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions, broadening coverage beyond a single sudden event.

Market value as a basis of valuation refers to:

1. The cost to rebuild the property new at today's prices, excluding the land
2. The price the property would bring in a sale, including land ✓
3. The face amount of the policy shown on the declarations page
4. Replacement cost less an allowance for depreciation and obsolescence

Why: Market value is what a buyer would pay a seller in an open market and can differ substantially from replacement cost because it includes land and location factors.

A retail employee sues the company for sexual harassment and wrongful termination. Which policy is designed to respond?

1. Workers Compensation and Employers Liability
2. CGL Coverage A, Bodily Injury Liability
3. Commercial Property, Special Form
4. Employment Practices Liability (EPLI) ✓

Why: Harassment and wrongful termination are employment practices claims handled by EPLI, not the CGL.

To provide both hired and non-owned auto liability for a business that owns no vehicles, an agent would typically assign which symbols?

1. Symbol 2 only
2. Symbol 4 only
3. Symbols 8 and 9 ✓
4. Symbol 7 only

Why: Symbols 8 (hired autos) and 9 (non-owned autos) together provide hired and non-owned liability for a business without owned vehicles.

A provider determines a PIP claimant did NOT have an emergency medical condition. Reimbursement for medical services and care is limited to what amount?

1. $5,000
2. $1,000
3. $10,000
4. $2,500 ✓

Why: Section 627.736(1)(a)4. limits reimbursement to $2,500 when a provider determines the injured person did not have an emergency medical condition.

Which of the following is an EXCEPTION to the exclusive-remedy rule, allowing an employee to sue the employer at law?

1. The employee changed physicians
2. The employer committed an intentional tort causing the injury ✓
3. The employer disputes the amount of the average weekly wage
4. The employee reached maximum medical improvement

Why: Section 440.11(1)(b) allows a civil action when the employer commits an intentional tort that causes injury or death.

The Automatic Increase in Insurance (inflation guard) endorsement on a dwelling policy does what?

1. Converts an actual cash value dwelling policy to replacement cost settlement at the next renewal
2. Periodically increases the Coverage A limit to keep pace with inflation ✓
3. Automatically adds theft coverage on the dwelling once the limit has risen above its original amount
4. Lowers the premium each year in which no claim is filed

Why: The inflation guard / automatic increase endorsement raises the dwelling limit at set intervals to help the amount of insurance keep up with rising construction costs.

A building worth $200,000 has an 80% coinsurance clause and is insured for $120,000. A $40,000 loss occurs (no deductible). The insurer pays:

1. $40,000
2. $24,000
3. $32,000
4. $30,000 ✓

Why: Required = 80% × $200,000 = $160,000. Payment = ($120,000 ÷ $160,000) × $40,000 = $30,000.

Under the unendorsed PAP, towing and labor (Part D) coverage is:

1. An optional coverage that must be added, with a stated per-disablement limit ✓
2. Built into Part A liability, so any tow after an accident is paid within the liability limit
3. Included automatically at full cost whenever the policy carries collision, with no separate premium
4. Available only for rental cars the insured hires while the covered auto is being repaired

Why: Towing and labor costs coverage is an optional add-on with a small per-disablement limit (e.g., $25–$75), not automatically included.

After a covered fire, a city orders demolition of the undamaged portion of an older building to meet current code. Which coverage pays for the demolition and increased rebuilding cost?

1. Peak season
2. Business income
3. Ordinance or Law ✓
4. Utility services

Why: Ordinance or Law coverage pays for loss to the undamaged portion, demolition costs, and increased cost of construction to comply with current codes.

Under Homeowners Coverage C special limits, money, bank notes, and coins are typically limited to about:

1. $1,500
2. $5,000
3. $2,500
4. $200 ✓

Why: Money, bank notes, gold, and coins carry a low special limit (commonly $200) under Coverage C.

Which of the following is a compulsory ground for license discipline under section 626.611?

1. Demonstrated lack of fitness or trustworthiness to engage in the business of insurance ✓
2. Operating an agency office in a rural county without maintaining a branch office in an urban area
3. Earning fewer commissions in a calendar year than the appointing insurer's production quota required
4. Failure to join a recognized state association of insurance agents within one year of licensure

Why: Section 626.611(1)(g) makes demonstrated lack of fitness or trustworthiness a compulsory ground for refusal, suspension, or revocation.