Florida Property & Casualty 2-20 Practice Test

Answer choices

1. A. Insert 'none' without asking the applicant so the application can be submitted.
2. B. Obtain complete and accurate information rather than guessing or leaving a material underwriting question unresolved.
3. C. Bind the risk and correct the application only if a claim occurs.
4. D. Replace the missing underwriting information with the producer's verbal assurance that the applicant is a low risk and bind coverage on that representation.

Wrong-answer review

• A. Insert 'none' without asking the applicant so the application can be submitted.: Incorrect. The producer should not invent an answer to a material application question.
• C. Bind the risk and correct the application only if a claim occurs.: Incorrect. Material information should be addressed before binding, not after a loss.
• D. Replace the missing underwriting information with the producer's verbal assurance that the applicant is a low risk and bind coverage on that representation.: Incorrect. A verbal assurance is not a substitute for accurate application information.

Answer choices

1. A. Business income coverage, subject to the policy's covered-cause and period-of-restoration requirements.
2. B. Commercial general liability coverage, because lost business revenue is treated as third-party property damage arising from the insured's operations.
3. C. Equipment breakdown coverage because every temporary shutdown is treated as mechanical failure.
4. D. Inland marine coverage because revenue is considered property in transit.

Answer choices

1. A. Automatic criminal prosecution of the insurer.
2. B. Mandatory cancellation of the policy.
3. C. Nonadversarial mediation through the property-insurance mediation program, when the dispute is eligible.
4. D. Refer the dispute to the Office of Financial Regulation for mediation because OFR has jurisdiction over contested property-insurance claim settlements.

Answer choices

1. A. The insurer may withhold the entire claim until every repair is completed.
2. B. The insurer initially pays at least the actual cash value, less the deductible, and pays remaining replacement-cost amounts as covered repairs are performed.
3. C. The insurer must immediately pay any contractor estimate even if it exceeds the policy limit.
4. D. The insurer always settles replacement-cost claims at depreciated value only.

Answer choices

1. A. $1,300.
2. B. $2,000.
3. C. $700.
4. D. $2,700.

Answer choices

1. A. Fungus and mold coverage is subject to the policy's specific limits, exclusions, covered-cause requirements, and any endorsements.
2. B. Cover every mold loss without a dollar limit or coverage restriction whenever the insured carries a Florida homeowners policy.
3. C. Mold can never be insured under any circumstance.
4. D. Mold claims are always paid by auto PIP.

Answer choices

1. A. False or misleading insurance advertising.
2. B. A permitted comparative rating technique.
3. C. A fiduciary premium-accounting issue only.
4. D. A workers' compensation classification issue.

Answer choices

1. A. The producer's commission statement.
2. B. The mortgage payment schedule.
3. C. The insuring agreement.
4. D. The insurer's advertising brochure.

Answer choices

1. A. Have FIGA pay the covered claim in full first and allow the insured to retain both FIGA benefits and the recovery from other applicable insurance.
2. B. The other insurer is automatically declared insolvent too.
3. C. FIGA's payment is reduced by the amount recovered under the other applicable insurance.
4. D. The insured must cancel the other policy before filing with FIGA.

Answer choices

1. A. At least 10 days' notice.
2. B. No notice at all.
3. C. At least 120 days' notice, applying the residential nonrenewal period to an automobile policy cancelled for nonpayment of premium.
4. D. At least one year.