FLORIDA 2-20 AGENTS LICENSE EXAM REAL EXAM 300 QUESTIONS AND CORRECT DETAILED ANSWERS|AGRADE

FLORIDA 2-20 AGENTS LICENSE EXAM 2023-2024

REAL EXAM 300 QUESTIONS AND CORRECT

DETAILED ANSWERS|AGRADE

Keith commutes into the city in his car, and he provides a ride to two co-workers

who live near him. Every other week, the co-workers take turns buying the

gasoline for Keith's car. Does this activity create a public or livery conveyance

situation that would preclude liability coverage under Keith's Personal Auto Policy

(PAP)? - ANSWER- No, because Keith is involved in a share-the-expense car

pool.

An insured covers his owned auto with more than one Personal Auto Policy (PAP),

each from a different insurer. In the event of a claim for medical payments

coverage, - ANSWER- Each insurer pays its pro rata share based on the proportion

that its limit of liability bears to the total of applicable limits.

The Insuring Agreement in Part A - Liability Coverage of the Personal Auto Policy

contains descriptions of all of the following EXCEPT: - ANSWER- Limit of

Liability

Tom and Martha insure their house with an unendorsed HO-3—Special Form (HO3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost

of the house. A thief breaks into the house while Tom and Martha are on vacation

and steals the following items: •$500 cash•$50,000 stock certificates. Ignoring any

deductible that may apply, how much, if any, will Tom and Martha's insurer pay

for the loss of the items? - ANSWER- $1,700

Under the HO-3—Special Form (HO-3) Section I—Conditions, the Loss

Settlement condition - ANSWER- Establishes the process for determining the

amount to be paid for a property loss.

Property described in Coverages A, B, and C of an HO-3—Special Form (HO-3)

that is destroyed, confiscated, or seized by order of any governmental or public

authority is - ANSWER- Excluded.

Adam and his insurer disagree on the amount of a loss covered by his homeowners

policy. Adam wants the insurer to pay $10,000 toward the loss. The insurer's

representative feels that the loss should be valued at $5,000. How could the

appraisal process resolve this situation? - ANSWER- Adam and the insurer will

each select an appraiser, and the two appraisers will submit their differences to an

impartial umpire who will reach a resolution.

Which one of the following has special limits of liability within Coverage C of the

HO-3—Special Form (HO-3)? - ANSWER- Theft of firearms

A storm causes power lines to break ten miles from the insured's premises. The

loss of electrical power causes food in the insured's freezer to thaw and spoil.

Coverage for this loss is - ANSWER- Excluded because the power failure occurred

off the residence premises.

If law enforcement officials seize an insured's personal computer to search for files

that might be related to a crime, the insured under an HO-3—Special Form (HO-3)

may be unsuccessful in claiming a theft loss on the computer due to the -

ANSWER- Governmental Action exclusion.

Sam and Sophia insure their house with an unendorsed HO-3—Special Form (HO3) policy. Sam stores a small fishing boat and trailer behind the house. While they

are out for the evening, a fire destroys most of their kitchen and completely

destroys the boat and trailer. Assuming Sam's boat and trailer are valued at $4,000

and ignoring any deductible that may apply, what amount will their HO-3 insurer

pay for the loss of the boat and trailer? - ANSWER- $1,500

The Florida Valued Policy Law applies to: - ANSWER- mobile homes

For a Dwelling Flood policy, which is correct: - ANSWER- Primary residences are

covered at replacement cost on building losses.

Sally insures her house with an unendorsed HO-3—Special Form (HO-3) with a

Coverage A—Dwelling limit of $275,000, which is the replacement cost of the

house. A fire destroys the house including a collection of blueprints belonging to

Sally's employer, valued at $10,000. Sally was storing the blueprints at her home

while her office was changing locations. Assuming no deductible applies, how

much, if any, will Sally's HO-3 insurer pay to replace the blueprints? - ANSWER-

$0

One of the main factors used in developing a base premium for a homeowners

policy is - ANSWER- The public protection class.

Bert and Maggie insure their house with an unendorsed HO-3—Special Form (HO3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost

of the house. A fire destroys their detached garage. The cost to replace the garage

is $35,000. Ignoring any deductible that may apply, how much will Bert and

Maggie's insurer pay to replace the detached garage? - ANSWER- $30,000

Coverage for other structures is automatically provided under the HO-3—Special

Form (HO-3) policy with a limit that is - ANSWER- 10 percent of the Coverage A

limit

Renee is an insured under an unendorsed HO-3—Special Form (HO-3) with a

Coverage C—Personal Property limit of $100,000. She owns a secondary

residence that contains $15,000 of personal property. Only her primary residence is

listed on the declarations page of the HO-3 policy. A fire destroys all of Renee's

personal property at her secondary residence. How much of this loss will be paid

by Renee's HO-3 policy? - ANSWER- $10,000

A homeowners policy premium is determined by first developing the base

premium. The base premium is influenced by certain factors, including which one

of the following? - ANSWER- Dwelling location

Ralph has an unendorsed HO-3—Special Form (HO-3) policy. While coming

home from a coin show, Ralph discovers that his automobile was broken into and a

package containing $2,000 in coins, some tools, and groceries was stolen.

Disregarding any deductible that may apply, will Ralph's HO-3 insurer pay for the

loss of the coins? - ANSWER- Yes, the coins are covered up to a specified limit.

Jim and Sue, a young married couple, are under contract to purchase a

condominium unit. Which one of the following ISO policy forms is best designed

to meet their homeowners insurance needs? - ANSWER- HO-6—Unit-Owners

Form

Allen, a sole proprietor, is crossing the street when he is struck by a passing

uninsured auto. He sustains $2,500 in medical bills, $3,000 damage to the laptop

he was carrying, and $1,000 in lost wages. Allen's business auto policy has

$100,000 liability limit and $5,000 medical payments limit. Assuming there is no

other coverage, how much will his business auto policy pay? - ANSWER- $2,500

An animal damaged the interior of an insured's automobile while it was parked

with the windows down. Which one of the following types of physical damage

coverage under the Business Auto Coverage Form would cover this loss? -

ANSWER- Comprehensive

Martha drives her auto, which is insured under a Business Auto Coverage Form,

outside the state in which it is licensed. The other state requires a $25,000 bodily

injury limit for underinsured motorists coverage. Martha's policy does not provide

underinsured motorists coverage but does provide a $15,000 liability limit for

uninsured motorists coverage. How would Martha's Business Auto Coverage Form

respond to a $30,000 underinsured motorists bodily injury claim in the other state?

- ANSWER- Martha's policy would provide the $25,000 bodily injury limit

required by the other state for underinsured motorists coverage.

Bilo Manufacturing is weighing whether to lease vehicles for its employees or

have them drive their own autos while on company business. Which one of the

following exposures is created if Bilo decides in favor of employee-owned autos? -

ANSWER- Employer's Nonownership Liability

Joe's New Cars, Inc. has a Business Auto Policy (BAP). The owner, Joe, owns no

car himself since he always drives a company car. If you were the agent, what

coverage would you add to the BAP to give Joe liability coverage while he drives a

car not owned by the corporation? - ANSWER- Other Car coverage

Which one of the following losses would be covered by the business auto policy? -

ANSWER- The insured has agreed to pay for liability losses caused by the

insured's negligence that a shipper may incur while the insured is hauling goods for

the shipper.

For commercial auto insurance, a truck, tractor, or trailer is non-zone rated if it is -

ANSWER- A light truck operating over any distance.

Mitchell is a highway contractor whose company is covered with a workers

compensation policy and an unendorsed business auto policy. Which one of the

following losses would be covered by his business auto policy? - ANSWER- An

employee runs over a subcontractor's equipment with an owned auto.

Joe Motors, which services automobiles, wants to maintain the goodwill of its

customers. This is best accomplished by - ANSWER- Purchasing garagekeepers

insurance.