FLORIDA ADJUSTER LICENSING 2023-2024 ACTUAL EXAM 400
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONALES (VERIFIED ANSWERS) | AGRADE
Which of the following statements is true about an insurance policy?
The insured is obligated to the terms of the contract for the entire policy period.
It relies on the utmost good faith of both the insured and the insurer.
It is transferable if the property is sold to another party.
The insured sets the terms of the policy. - ANSWER- It relies on the utmost good
faith of both the insured and the insurer.
In an insurance policy, the summary of what the insurer will do in the event of a
covered loss is called:
the insuring agreement.
the dec page.
the conditions section.
the definitions section. - ANSWER- the insuring agreement.
In a __________, only one party is legally obligated to perform.
unilateral contract
conditional contract
contract of adhesion
contract of utmost good faith
unilateral contract - ANSWER- unilateral contract
Insurance policies are unilateral contracts. This means:
only one party has an obligation to perform.
ambiguities are settled in favor of the insured.
they depend on an unknown future event.
they rely on the honesty of both parties. - ANSWER- only one party has an
obligation to perform.
Which of the following is NOT a characteristic of insurance contracts?
Universal
Conditional
Unilateral
Aleatory - ANSWER- Universal
If an adjuster needs to find clarification about what actually constitutes a collision,
in which section of an
insurance policy would she find that information?
Declarations
Exclusions
Conditions
Definitions - ANSWER- Definitions
Which of the following best describes a Fraternal Benefit Society?
A fraternal benefit society is a for-profit provider of insurance.
A fraternal benefit society uses investors' money to pay claims.
A fraternal benefit society is a social organization based around common interests
and beliefs.
A fraternal benefit society pays dividends to its stockholders. - ANSWER- A
fraternal benefit society is a social organization based around common interests
and beliefs.
Which of the following is NOT a characteristic of social insurance programs?
Social insurance programs are for-profit programs.
Social insurance programs are designed to meet the needs of the general public as a
whole.
The benefits of a social insurance program may be prescribed by federal law.
Social insurance programs involve mandatory participation. - ANSWER- Social
insurance programs are for-profit programs.
When an insurer buys insurance to reduce its exposure to loss, this is called:
mitigation.
loss reduction.
co-insurance.
re-insurance. - ANSWER- re-insurance.
Frank purchases an automobile policy from publicly-traded XYZ Insurance. He
pays regular monthly
premiums, and also purchases stock in XYZ and receives dividends when the
company turns a profit. From
which type of company has Frank purchased insurance?
Re-Insurer
Reciprocal insurer
Mutual insurer
Stock insurer - ANSWER- Stock insurer
Xavier owns a small insurance company. Recently the company won a bid to
insure a new housing
development in Omaha, NE. His company can handle any claims that arise, but if a
series of tornados were
to tear through the area and destroy the entire development, Xavier's company
would suffer financially.
Which type of insurer could help Xavier's company protect itself the most from
this potential loss?
A re-insurer
A fraternal benefits society
A stock insurer
A reciprocal insurance group - ANSWER- A re-insurer
Cindy holds an insurance policy from Sine Nomine Insurance. This is not a
publicly traded company, and
Cindy can participate in the election of the board, receiving dividends if the
company does well. Sine Nomine
Insurance could be best described as a:
a risk retention group.
fraternal benefits society.
stock insurance company.
mutual insurance company. - ANSWER- mutual insurance company.
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