P&C Insurance Exam - FINAL FINAL

Question 1

How many days prior to writing limited sinkhole coverage must an insurer notify the Florida Office of Insurance Regulation?
A. 30 days
B. 10 days
C. 60 days
D. 20 days

Answer 1

A. 30 days

Question 2

For hurricane coverage, the duration of a hurricane ends how long after the termination of the last hurricane watch or warning issued for any part of Florida?
A. 48 hours
B. 24 hours
C. 12 hours
D. 72 hours

Answer 2

D. 72 hours

Question 3

Rates, rating schedules, and manuals filed with the Office of Insurance Regulation for review at least 90 days before the proposed effective date are called
A. Use and file.
B. Filed and approved.
C. File and use.
D. Reviewed and approved.

Answer 3

C. File and use.

Question 4

Auto insurance companies must offer stackable Uninsured Motorist coverage, but may choose to offer a non-stackable option at
A. An increased cost.
B. The same cost.
C. A reduced cost.
D. No cost.

Answer 4

C. A reduced cost.

Stacking is more expensive because it combines UM and UIM for multiple cars thereby increasing coverage

Question 5

What is the only difference between blanket insurance and group health insurance?
A. The insured members are not named.
B. Group health insurance is provided on an employee-only basis.
C. Membership is not allowed to change in blanket insurance, except on a yearly basis.
D. Blanket insurance is not provided to schools.

Answer 5

A. The insured members are not named.

Blanket insurance covers a group without naming the insured. Group insurance gives each insured a certificate of insurance.

Question 6

What is the typical deductible for basic surgical expense insurance?
A. $500
B. $100
C. $0
D. $200

Answer 6

A. $500

Question 7

What perils does the Citizens Property Insurance Corporation provide coverage
for?
A. The same perils covered by homeowners insurance
B. Windstorm, hail and fire
C. Windstorm and hail only
D. Hail and fire only

Answer 7

B. Windstorm, hail and fire

Question 8

Declarations Page:

Answer 8

The insured’s name, address, policy period, coverage limits, premium amount, and any applicable deductibles

Question 9

Insuring Agreement:

Answer 9

Risks covered, including conditions and exclusions

Question 10

Conditions:

Answer 10

This section outlines the terms and requirements that the policyholder must meet to be eligible for coverage and to file a claim, including reporting claims within a specific timeframe.

Question 11

Endorsements:

Answer 11

Any additions or changes to coverage

Question 12

Which homeowners form insures both buildings and personal property on an open peril basis?
A. HO-3
B. HO-4
C. HO-5
D. HO-2

Answer 12

C. HO-5

Question 13

What are the six homeowner’s coverage forms (HO-1 - HO-8)?

Answer 13

Form HO-1: Basic
Form HO-2: Broad
Form HO-3: Special
Form HO-4: Tenant contents/Broad
Form HO-5: Comprehensive
Form HO-6: Condo unit owners
Form HO-8: Modified coverage

Question 14

What are the seven HO (homeowner’s) coverages (A-F)?

Answer 14

SECTON I - PROPERTY
Coverage A: Dwelling
Coverage B: Other structures
Coverage C: Personal property
Coverage D: Loss of use

SECTION II - LIABILITY
Coverage E: Personal liability
Coverage F: Medical payments to others

Question 15

What are the three types of Dwelling forms?

Answer 15

Form DP-1: Basic (named peril)
Form DP-2: Broad (named peril)
Form DP-3: Special (open peril)

Question 16

What three perils are covered in Dwelling form DP-1?

Answer 16

• Fire (not intentional and not contained within intended boundaries)
• Lightening
• Internal explosion

Question 17

What six additional perils are covered in Dwelling form DP-1 extended coverage Option 1?

Answer 17

WHARVES
- Windstorm/hail
- Aircraft/vehicles
- Riot/civil commotion
- Volcanic eruption
- Explosion (inside and out)
- Smoke

Question 18

What additional peril is covered in Dwelling form DP-1 extended coverage Option 2?

Answer 18

All of Option 1 + VMM (Vandalism/malicious mischief)

Question 19

What does Dwelling form DP-2 cover?

Answer 19

B.B. BICE-GOLF

All of DP-1 + DP-1 extended coverage + basic DP-2 coverage

• Burglary
• Bursting of heating systems
• Breaking of water heaters
• Ice, snow or sleet
• Collapse of building
• Electrical damage (artificially generated)
• Glass breakage
• Objects falling from outside
• Leakage of water or steam damage
• Freezing of plumbing

Question 20

What are the five DP coverages (A-E)?

Answer 20

DIRECT LOSSES
- Coverage A: Dwelling
- Coverage B: Other structures
- Coverage C: Personal property

INDIRECT LOSSES
- Coverage D: Fair rental value
- Coverage E: Loss of use/Additional living expenses

Question 21

Persons in Florida owning a self-propelled vehicle with 4 or more wheels that is registered and licensed in the state are required to have continuous insurance coverage that includes a minimum of $10,000 of PIP and $10,000 of PDL. This requirement also applies to any nonresident who owns and operates a vehicle and is living in Florida at least how many days a year?
A. 30 days
B. 180 days
C. 120 days
D. 90 day

Answer 21

D. 90 day

Question 22

The HO-4 form designed for tenants covers losses on what basis?
A. Basic peril
B. Broad peril
C. Open peril
D. Special peril

Answer 22

B. Broad peril

Question 23

Insureds covered under a Mobile Homeowners Policy move their mobile home to prevent it from being damaged by a fire. What is the maximum amount the policy will pay for this?
A. $500
B. $350
C. $5,000
D. $1,000

Answer 23

A. $500

Question 24

An insured’s diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured’s policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?
A. Both the loss of income and the cost of the floor covering
B. The entire loss would be paid as direct loss by fire
C. The loss of income for the time the diner was closed
D. The cost of replacing the floor covering due to the water damage

Answer 24

C. The loss of income for the time the diner was closed

Direct loss: all physical damage related to the covered peril

Indirect loss: Financial loss resulting from the inability to operate a business due to a covered loss

Question 25

The personal property floater in marine insurance provides coverage on what basis? A. Limited coverage B. Open peril C. Scheduled D. Named peril

Answer 25

B. Open peril

Question 26

In a personal auto policy (PAP), a covered auto includes all of the following EXCEPT A. A farm implement being towed behind the insured's pickup. B. A nonowned temporary substitute vehicle. C. A trailer owned by the insured. D. A van used in the delivery business.

Answer 26

D. A van used in the delivery business. PAP doesn't cover vehicles being used for business. Since the farm implement wasn't being used, D. is the answer.

Question 27

All of the following are covered under Coverage B - Other Structures of a homeowners policy EXCEPT A. Structures rented to anyone other than a tenant of the dwelling that are used as a private garage. B. Structures used to store business property of the insured. C. Structures that are used to conduct any business. D. Structures on the residence premises that are separated from the dwelling by a clear space.

Answer 27

C. Structures that are used to conduct any business.

Question 28

Medical benefits under workers compensation statutes are provided A. Without limit. B. For a certain percentage of the worker's annual income. C. For up to $500,000 per injury or disease. D. For up to $100,000 per injury or disease.

Answer 28

A. Without limit. And regardless of fault.

Question 29

Due to appreciation, the amount of insurance on a business is less than 80% of its actual value on the date of the loss. Which of the following is true? A. The full amount of the loss less any deductible is paid. B. The coinsurance penalty applies. C. The policy pays nothing. D. The policyholder is responsible for twice the amount of the deductible.

Answer 29

B. The coinsurance penalty applies. 80% of ACV AT THE TIME OF THE LOSS must be maintained

Question 30

If an insurance policy has the additional coverage provision, how does it affect the policy premium? A. Premium will be calculated on a pro rata basis based on the amount of additional coverage. B. There is no additional premium. C. Premium will be recalculated when a specific loss covered by this provision occurs. D. Additional premium will be assessed.

Answer 30

D. Additional premium will be assessed.

Question 31

Which of the following is the other major coverage provided by the businessowners liability coverage form? A. Employers liability B. Personal liability C. Medical payments D. Auto liability

Answer 31

B. Personal liability

Question 32

The equipment breakdown coverage form values loss on a(n) A. Stated amount basis. B. Replacement cost basis. C. Valued basis. D. Actual cash value basis.

Answer 32

D. Actual cash value basis.

Question 33

With regard to homeowners Section II, which of the following does NOT meet the definition of insured location? A. A meeting hall rented to the insured to hold a reception for his daughter's wedding B. A cabin rented to the insured for use on a family vacation C. A plot of farmland owned or rented by the insured D. A secondary residence acquired by the insured during the policy period

Answer 33

B. A cabin rented to the insured for use on a family vacation A. will probably be covered because it is temporarily (< a day) under the control of the insured

Question 34

An insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the three weeks required to repair the fire damage, the insured pays $900 in rent for a short-term apartment, and the renter is forced to find other accommodations. Disregarding any extra expense for meals, how much would an HO-3 will pay under Coverage D? A. $150 B. $1,050 C. $300 D. $900

Answer 34

D. $900 Coverage D covers loss of use/additional living expenses, not loss of rental income