FLORIDA ADJUSTER LICENSING 2023-2024 ACTUAL EXAM 400 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) | AGRADE

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.