Florida P&C Practice Exam.
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1. Two policies written on a pro rata other-insurance basis cover the same Gainesville building: Insurer A's limit is $100,000 and Insurer B's limit is $300,000. A covered loss totals $60,000. How much does Insurer A pay?

• A. $30,000
• B. $15,000
• C. $45,000
• D. $60,000

2. Rounding a curve near Micanopy at dusk, a driver swerves but still strikes a deer, caving in the hood. Under personal auto physical damage coverage, how is hitting an animal classified?

• A. As an uninsurable act of nature
• B. As a liability loss
• C. As a collision loss
• D. As an other-than-collision loss

3. An insurer covering 400,000 Florida homes can project next year's total fire losses with striking accuracy, even though it cannot say which specific homes will burn. Which principle makes this prediction possible?

• A. Adverse selection
• B. The law of large numbers
• C. The principle of indemnity
• D. Subrogation

4. Marisol invests $50,000 in a Tampa food truck. The venture could turn a profit or lose money, and the truck itself could be destroyed by fire. Which statement correctly classifies these two risks?

• A. Both risks are insurable because they arise from the same business
• B. The profit-or-loss exposure is a pure risk; the fire exposure is speculative
• C. Neither risk is insurable because both involve the possibility of financial gain
• D. The fire exposure is a pure risk and is insurable; the chance the business loses money is a speculative risk and is not

5. An underwriter inspecting a Naples warehouse notes frayed electrical wiring running through the storage racks. In insurance terminology, the frayed wiring is best described as what?

• A. A proximate cause, because it will start the chain of events leading to loss
• B. A physical hazard, because it is a tangible condition that increases the chance of loss
• C. A moral hazard, because it reflects dishonesty
• D. A peril, because it is a cause of loss

6. After buying a homeowners policy, Devon stops locking his doors because he figures the insurer will pay if anything is stolen. His new carelessness is an example of which underwriting concern?

• A. Adverse selection
• B. Physical hazard
• C. Morale hazard
• D. Moral hazard

7. Rachel sold her Ocala rental house in March but never canceled her fire policy. In June, the house burns down while owned by the buyer. Why will Rachel's claim under her old policy fail?

• A. The coinsurance requirement was violated when the deed transferred
• B. The policy automatically transferred to the buyer at closing
• C. She no longer had an insurable interest in the property at the time of the loss
• D. Fire losses are excluded once a property is listed for sale

8. In forming a property insurance contract, the applicant's consideration consists of the premium and the truthful statements in the application. What is the insurer's consideration?

• A. Paying the producing agent's commission
• B. Delivering a printed copy of the policy to the insured
• C. Issuing a certificate of insurance to interested third parties
• D. Its promise to pay covered losses as described in the policy

9. Colton pays a $2,400 annual premium and later collects $180,000 after a total fire loss to his home. This unequal exchange of dollar amounts illustrates which characteristic of insurance contracts?

• A. They are conditional contracts
• B. They are unilateral contracts
• C. They are aleatory contracts
• D. They are contracts of adhesion

10. A homeowners policy exclusion is genuinely ambiguous and could reasonably be read two different ways. A Florida court resolves the ambiguity in the policyholder's favor. Which characteristic of insurance contracts explains this outcome?

• A. They are contracts of adhesion, so ambiguities are construed against the drafter
• B. They are aleatory, so the smaller-paying party wins disputes
• C. They rely on warranties, so all terms are read literally
• D. They are unilateral, so only the insured may interpret terms

11. A Kissimmee homeowner chooses a $2,500 deductible instead of $500 to lower her premium, deliberately accepting responsibility for the first layer of any loss. Which risk management technique does the larger deductible represent?

• A. Retention
• B. Transfer
• C. Reduction
• D. Avoidance

12. On his application, a Fort Myers applicant states that his home has a central monitored alarm when it does not, and the insurer relies on that answer to issue coverage at a reduced rate. What is this false statement, and what remedy may the insurer have?

• A. A material misrepresentation, which may allow the insurer to void the policy
• B. A concealment, which merely raises the deductible
• C. A waiver, which permanently surrenders the insurer's underwriting rights
• D. An immaterial statement, which carries no consequences

13. When applying for coverage on her Sarasota duplex, Ana answers questions about the roof's age and construction to the best of her knowledge. In insurance contract law, her answers are classified as what?

• A. Warranties, statements guaranteed to be literally true in every detail
• B. Endorsements, because they modify the coverage being requested
• C. Concealments, because an applicant cannot know every fact
• D. Representations, statements believed true to the best of her knowledge

14. An agent with binding authority tells a new client, 'Your shop is covered as of 3 p.m. today,' while the application is still being processed. What has the agent created?

• A. A conditional receipt that applies only to life insurance underwriting
• B. A certificate of authority to transact insurance
• C. An endorsement amending a policy not yet in force
• D. A binder providing temporary evidence of coverage until the policy is issued or declined

15. An insurer supplies an agency with its signage, letterhead, and application forms. Based on appearances, a customer reasonably believes the agent can waive a policy condition even though the agency agreement forbids it. The authority the public reasonably assumes the agent holds is called what?

• A. Fiduciary authority
• B. Express authority
• C. Implied authority
• D. Apparent authority

16. A claims adjuster explains that a homeowners settlement is calculated to restore the insured to approximately the same financial position she occupied before the loss, with no windfall. Which foundational principle is the adjuster describing?

• A. The law of large numbers
• B. Insurable interest
• C. Subrogation
• D. The principle of indemnity

17. For two years an insurer accepts late premium payments from a Lakeland business without objection. When a claim arises, it tries to deny coverage solely because the most recent payment was late, but a court will not allow the denial. Which doctrine prevents the insurer from asserting a right its own conduct led the insured to believe it had given up?

• A. Subrogation
• B. Reformation
• C. Arbitration
• D. Estoppel

18. An investor buys an older rental house in Palatka and wants the least expensive dwelling coverage available, accepting named-peril protection settled at actual cash value. Which dwelling form fits this request?

• A. The special dwelling form
• B. A businessowners policy
• C. The broad dwelling form
• D. The basic dwelling form

19. Under the special dwelling form covering a rented bungalow, how does coverage on the dwelling itself differ from coverage on the landlord's personal property kept there?

• A. The dwelling is covered for named perils only, while contents receive open-peril coverage
• B. Both are limited to fire, lightning, and internal explosion
• C. Both the dwelling and contents are covered on an open-peril basis
• D. The dwelling is covered on an open-peril basis, while contents are covered only for named perils

20. A fire makes a St. Augustine rental duplex uninhabitable for three months. The owner loses the $1,800 monthly rent from the tenant's unit. Which dwelling policy coverage responds to the lost rent?

• A. Other structures coverage
• B. Fair rental value coverage
• C. Additional living expense coverage
• D. Personal property coverage

21. A homeowner in Deltona insures her house under the most commonly sold homeowners form. How are the dwelling and her personal property each covered under this form?

• A. The dwelling has named-peril coverage while personal property has open-peril coverage
• B. Both dwelling and personal property are covered only for named perils
• C. Both dwelling and personal property are covered against all perils without exception
• D. The dwelling has open-peril coverage while personal property is covered for named perils

22. Priya rents an apartment in downtown Orlando and wants to protect her furniture and electronics, gain liability protection, and have living-expense help if the unit becomes uninhabitable. Which homeowners form is designed for her situation?

• A. The comprehensive form covering the building on an open-peril basis
• B. The tenant form, which omits dwelling coverage entirely
• C. The modified form for older homes
• D. The unit-owners form with real property coverage for alterations

23. Marcus owns a sixth-floor condominium in Clearwater. The association's master policy insures the building's structure. What does his own unit-owners homeowners form primarily add?

• A. Coverage for the building exterior, elevators, and common hallways
• B. Workers' compensation for association employees
• C. Flood coverage for the entire condominium complex
• D. Coverage for his contents, interior alterations and betterments, liability, and loss assessment exposure

24. A 1926 bungalow in a historic Key West district would cost far more to rebuild with original materials than its market value. Which homeowners form lets the insurer settle losses using common construction materials and methods instead of exact replacement?

• A. The broad form with a replacement cost endorsement
• B. The modified coverage form for older homes
• C. The comprehensive form with scheduled coverage
• D. The tenant form with building additions coverage

25. Two Bradenton neighbors compare homeowners policies. One has broad-form named-peril coverage on both dwelling and contents; the other pays more for a form with open-peril coverage on both dwelling and contents. What distinguishes the more expensive form?

• A. It covers contents only while they remain inside the residence
• B. It eliminates all policy exclusions, including flood
• C. It extends open-peril protection to personal property, shifting the burden to the insurer to prove an exclusion applies
• D. It converts all settlements to actual cash value

26. A detached workshop sits behind an insured home in Winter Haven. Lightning destroys the workshop. Under a homeowners policy, which coverage part pays for the workshop itself?

• A. The other structures coverage
• B. The personal liability coverage
• C. The dwelling coverage
• D. The loss of use coverage

27. While vacationing in Georgia, a Port St. Lucie family's luggage and camera gear are stolen from their hotel room. Can their homeowners policy respond, and why?

• A. Yes, but only if the hotel accepts legal liability first
• B. No, because theft is never a covered peril for personal property
• C. Yes, because personal property coverage generally applies anywhere in the world
• D. No, because personal property is covered only inside the insured residence

28. A kitchen fire forces the Delgado family out of their insured Miami Gardens home for six weeks. They rent a similar nearby house for more than their normal housing costs. Which homeowners coverage pays the increase, and on what basis?

• A. Personal property, paying the full rent as a contents loss
• B. Loss of use, paying the necessary increase in living expenses to maintain their normal standard of living
• C. Medical payments, reimbursing displacement costs for household members
• D. Other structures, paying rent as a substitute structure cost

29. An insured's dog bites a delivery driver at his Cape Coral home, and the driver sues for $45,000 in damages. Which part of the homeowners policy defends the insured and pays a covered judgment?

• A. Loss of use coverage
• B. The dwelling coverage in the property section
• C. Personal liability coverage in the policy's liability section
• D. The scheduled personal property endorsement

30. A neighbor's child scrapes her knee on an insured's Jupiter patio, and the insured wants the child's small urgent-care bill paid quickly without any determination of fault. Which homeowners coverage is designed for exactly this?

• A. Fair rental value coverage
• B. Medical payments to others
• C. Personal liability, after a court assigns negligence
• D. Personal property coverage

31. A Boca Raton insured owns a $28,000 diamond ring. Her agent warns that a homeowners policy alone gives limited protection if the ring is stolen and recommends an additional step. What is the concern, and what is the usual solution?

• A. The ring must be stored in a bank vault to have any coverage
• B. The ring is fully covered at replacement cost with no further action needed
• C. Homeowners forms apply special sub-limits to jewelry theft, so the ring should be scheduled on a personal property floater
• D. Jewelry is excluded entirely; only a commercial crime policy can cover it

32. A violinist in Coral Gables insures her professional instrument on a scheduled personal property floater with an agreed value of $60,000. Which statement describes a key advantage of this floater over her homeowners contents coverage?

• A. The floater covers the instrument on an open-peril basis at its scheduled value, typically with no deductible, even away from home
• B. The floater doubles the homeowners contents limit for all property
• C. The floater covers the instrument only against fire and theft at depreciated value
• D. The floater covers the instrument on an open-peril basis at its scheduled value, typically with no deductible

33. A Tallahassee bakery owner insures her shop under a commercial property policy. Which item belongs under business personal property rather than building coverage?

• A. The ovens, display cases, and flour inventory inside the shop
• B. The permanently installed central air conditioning system
• C. The outdoor fixtures permanently attached to the building's exterior
• D. The completed additions attached to the structure

34. A hurricane closes a Fort Walton Beach surf shop for two months. The owner keeps paying rent and key employees while revenue stops. Which commercial coverage replaces the shop's lost net income and continuing normal expenses during the shutdown?

• A. Business income coverage
• B. Equipment breakdown coverage
• C. Building coverage
• D. Commercial general liability coverage

35. After a fire, a Doral data-services firm cannot afford any interruption, so it immediately rents temporary servers and office space at a steep premium to keep serving clients. Which coverage is specifically designed to pay these extraordinary costs to continue operating?

• A. Leasehold interest coverage
• B. Extra expense coverage
• C. Ordinance or law coverage
• D. Debris removal coverage

36. A general contractor needs coverage for a Venice office building from groundbreaking until the owner accepts the completed structure, including materials on site awaiting installation. Which policy matches this exposure?

• A. A surety performance bond
• B. A standard commercial property policy on the finished building
• C. A builders risk policy
• D. A commercial general liability policy

37. Hail ruins a roof that would cost $40,000 to replace with new materials today. The adjuster determines the roof has depreciated 30 percent from age and wear. Under an actual cash value settlement, what amount is payable before applying any deductible?

• A. $40,000
• B. $30,000
• C. $28,000
• D. $12,000

38. A Fort Lauderdale electronics distributor regularly ships high-value inventory by truck to retailers across the Southeast and worries about damage or theft while the goods are on the road. Which class of insurance addresses property in transit?

• A. Commercial building coverage
• B. Inland marine insurance
• C. Workers' compensation insurance
• D. Business income coverage

39. A road-grading contractor in Okeechobee wants one policy to follow its bulldozers and excavators as they move among job sites around the state. Which inland marine form is built for this need?

• A. A contractors equipment floater
• B. A businessowners policy with hired auto coverage
• C. An installation builders risk form for the finished roadway
• D. A building and personal property form listing each job site

40. Heavy summer rains push several inches of rising water through a Davie neighborhood, damaging floors and drywall in an insured home. The homeowner assumes her homeowners policy will pay. What should her agent have explained long before this loss?

• A. Flood is covered automatically once damage exceeds the deductible
• B. Flood damage falls under the loss of use coverage
• C. Rising surface water is excluded under homeowners forms; flood protection requires a separate flood policy
• D. Only detached structures are excluded from flood coverage

41. During a tropical storm near Stuart, wind tears a hole in a roof and rain pours through it, while the street outside also floods into the garage. How would insurers typically sort these two kinds of water damage?

• A. Neither loss is insurable under any policy
• B. Rain entering through the storm-created roof opening is a wind loss for the property policy; rising water entering the garage is flood, requiring flood coverage
• C. Both losses are flood losses payable only under a flood policy
• D. Both losses are wind losses payable under the homeowners policy

42. A Melbourne homeowner notices her declarations show two different deductibles: a flat dollar amount for most perils and a separate, larger one that applies to hurricane losses. Why do Florida residential policies commonly carry this two-deductible structure?

• A. Both deductibles apply together to every single claim
• B. The larger deductible applies only to theft losses
• C. The second figure is a typographical error insurers routinely ignore
• D. Hurricane damage is subject to its own deductible, typically a percentage of the dwelling limit, while an all-other-perils deductible handles everything else

43. A Hialeah homeowner files a claim for vandalism discovered in a rental house that has stood empty for many months. The insurer reduces its payment, citing a policy provision. Which provision most likely applies?

• A. The liberalization clause broadening coverage automatically
• B. The worldwide territory provision for personal property
• C. The vacancy provision restricting certain perils after the building is vacant beyond the period stated in the policy
• D. The appraisal condition for valuation disputes

44. Fire guts one wing of an older Ocala strip mall. Current building codes force the owner to upgrade wiring and add accessibility features throughout during repairs, at a large cost beyond restoring what burned. Which statement about the standard commercial property form is accurate?

• A. The increased cost of complying with current codes is not covered unless ordinance or law coverage was added
• B. Code-driven upgrade costs are fully covered as part of the fire loss
• C. The policy pays code upgrades but only for detached structures
• D. The building becomes uninsurable once codes change

45. Lightning strikes a transformer on the utility pole across the street from a Palm Coast home, cutting power for two days and spoiling everything in the family's refrigerator. Why might their unendorsed homeowners policy deny the food loss?

• A. Food spoilage is always excluded even when the dwelling burns
• B. Power interruption originating off the residence premises is generally not a covered peril without an endorsement
• C. Lightning is not a named peril under homeowners forms
• D. Refrigerated property belongs only under commercial cargo coverage

46. A dry cleaner in Winter Park holds customers' garments while cleaning them. A fire destroys hundreds of items belonging to customers. Which inland marine coverage is designed to protect the cleaner against loss to customers' property in its care?

• A. A personal property floater in each customer's name
• B. Bailee's customers coverage
• C. Business personal property coverage on the cleaner's own contents
• D. Fair rental value coverage

47. An insured in The Villages replaces her aging roof and asks her agent whether her homeowners contents will be replaced new-for-old after a covered loss. Her policy settles personal property at actual cash value. What endorsement changes this?

• A. A replacement cost endorsement on personal property, removing the depreciation deduction
• B. A scheduled jewelry endorsement
• C. An ordinance or law endorsement covering code upgrades
• D. A home business endorsement expanding liability limits

48. A Sanford woodworking shop's dust-collection system suffers a sudden electrical arcing failure that destroys its motors, with no fire and no external cause. The commercial property insurer denies the claim. What coverage was the shop missing?

• A. Equipment breakdown coverage for sudden mechanical or electrical failure
• B. A windstorm deductible buyback
• C. Business auto physical damage coverage
• D. Higher building limits

49. A new policyholder wants to confirm her insured dwelling limit, the policy period, and the premium she was charged. Which part of her property policy contains this information?

• A. The insuring agreement
• B. The declarations page
• C. The endorsement schedule
• D. The policy conditions

50. A licensing student is matching the major parts of a property policy to their functions. Which pairing is correct?

• A. The conditions grant additional living expense coverage
• B. The insuring agreement shows the mailing address and premium
• C. The declarations list the perils insured against
• D. The exclusions remove causes of loss, such as flood, that the insurer will not cover under the base form

51. The morning after a pipe bursts, an insured lets water keep spreading for days without shutting off the supply or drying anything, and the damage worsens substantially. How does a standard property policy treat the added damage?

• A. It is fully covered because the original cause was a covered peril
• B. It doubles the deductible but remains covered
• C. It converts the claim into a liability loss
• D. It may be uncovered because the insured breached the duty to protect the property from further damage

52. Grover Feed Supply's building has a value of $400,000 when fire breaks out, doing $80,000 of damage. The owner bought only $240,000 of coverage, and the policy contains an 80 percent coinsurance clause. Ignoring any deductible, calculate the settlement.

• A. $60,000
• B. $48,000
• C. $64,000
• D. $80,000

53. Sundial Storage's Pensacola warehouse, worth $500,000, is protected by a $360,000 limit subject to a 90 percent coinsurance requirement and a $1,000 deductible. Windstorm losses total $100,000. What amount does the company collect?

• A. $99,000
• B. $71,000
• C. $79,000
• D. $80,000

54. A business owner insures a warehouse building appraised at $350,000 under a commercial policy containing an 80 percent coinsurance requirement. What minimum amount of insurance must she carry to avoid any coinsurance penalty at claim time?

• A. $280,000
• B. $350,000
• C. $175,000
• D. $315,000

55. An art dealer and her insurer stipulate in advance that a scheduled painting is worth $75,000, and the policy promises to pay exactly that amount if the painting is destroyed, with no depreciation applied. Which valuation method does this policy use?

• A. Agreed value
• B. Market value
• C. Actual cash value
• D. Replacement cost

56. An insurer and its policyholder agree that a kitchen fire is covered but remain thousands of dollars apart on what the repairs are worth. Which policy condition lets each side select its own competent appraiser, with an umpire resolving their differences?

• A. The appraisal condition
• B. The other insurance condition
• C. The abandonment condition
• D. The subrogation condition

57. A homeowner deliberately sets fire to his mortgaged Lehigh Acres house, and his insurer rightfully denies his claim for arson. The bank that holds the mortgage is listed on the policy. Why can the bank still recover for its interest?

• A. The standard mortgagee clause gives the lender rights independent of the insured's wrongful acts
• B. The bank qualifies as a tenant with occupancy rights
• C. The state guaranty fund reimburses lenders for denied claims
• D. Arson is a covered peril for all parties under every property policy

58. Before closing on the sale of his insured Spring Hill home, Greg wants to hand his homeowners policy over to the buyer so she does not need to shop for coverage. What does the policy require for a valid transfer?

• A. The buyer's signature on the original application
• B. The insurer's written consent to the assignment
• C. Nothing; the policy follows the deed automatically
• D. Only a verbal notice to the producing agent

59. Halfway through a policy term, an insurer introduces a revised edition of its homeowners form that broadens coverage with no premium change. A provision in the existing policy extends that improvement to current policyholders automatically. Which provision is this?

• A. The coinsurance clause
• B. The mortgagee clause
• C. The salvage provision
• D. The liberalization clause

60. After serious smoke damage, a frustrated Largo policyholder tells the adjuster to simply take the whole house off her hands and pay the full policy limit. How does a standard property policy respond to this demand?

• A. The insurer must accept the property and pay the limit on request
• B. The demand converts the claim into a constructive total loss
• C. The insurer need not accept abandoned property; the abandonment provision bars the tactic
• D. The property transfers to the state unclaimed property fund

61. A restaurant suffers a covered fire loss and submits its claim paperwork. The insurer asks for a signed, sworn proof of loss documenting the amount claimed. Where does the insurer's right to demand this document come from?

• A. The declarations page limits
• B. An oral side agreement with the producing agent
• C. The insuring agreement's promise to pay
• D. The duties after loss set out in the policy conditions

62. Backing out of a parking spot in Ocoee, an insured driver crushes another car's door and injures its driver, who later sues. Which part of the insured's personal auto policy responds to the injured driver's claim?

• A. The medical payments coverage for the insured's passengers
• B. The physical damage coverage on the insured's own car
• C. The liability coverage, which pays damages the insured legally owes and provides a defense
• D. The uninsured motorist coverage

63. A hailstorm pounds a Zephyrhills insured's parked SUV, and weeks later the same vehicle is stolen from a mall lot. Which single physical damage coverage on a personal auto policy applies to both events?

• A. Other-than-collision coverage
• B. Towing and labor coverage
• C. Rental reimbursement coverage
• D. Collision coverage

64. An insured lends her covered sedan to a neighbor for a grocery run, and the neighbor causes an at-fault accident. How does the insured's personal auto liability coverage typically treat the neighbor?

• A. The neighbor has no coverage because only family members are ever insured
• B. The claim is covered only under the neighbor's homeowners policy
• C. The neighbor is an insured because he was using the covered auto with the owner's permission
• D. Coverage applies only if the neighbor has his own auto policy

65. Mid-term, a Riverview insured trades in her old hatchback for a new crossover and drives it home Friday evening. What is generally true about liability coverage on the replacement vehicle under her personal auto policy?

• A. The replacement auto has automatic liability coverage, with the policy allowing a stated period to notify the insurer
• B. The new vehicle has no coverage until a new policy is written
• C. Only physical damage coverage transfers, never liability
• D. Coverage applies only while the dealer's tag remains on the car

66. A Brandon driver signs up to carry paying passengers through a ride-hailing app on weekends. Why should she review her personal auto policy before her first paid trip?

• A. Personal auto policies generally exclude liability while a vehicle is used to carry persons for a fee, so she may need rideshare or commercial coverage
• B. Ride-hailing is covered as long as trips stay inside county lines
• C. Her passengers' claims would fall under her homeowners policy
• D. Personal auto policies automatically double their limits for business use

67. A driver with no auto insurance runs a red light in Lauderhill and seriously injures an insured motorist. The insured carries coverage designed for exactly this event. Which coverage pays her bodily injury damages that the at-fault driver cannot?

• A. Her collision coverage
• B. Her property damage liability coverage
• C. Uninsured motorist coverage under her own policy
• D. The at-fault driver's homeowners policy

68. A pool-service company in Odessa wants its commercial auto policy to cover every vehicle it now owns, later acquires, hires, or borrows, including employees' cars used on company errands. Which covered-auto designation accomplishes this?

• A. A designation limited to specifically described autos only
• B. A designation covering owned autos only
• C. A designation covering hired autos only
• D. The broadest designation, covering any auto

69. A Sebring auto repair shop keeps customers' cars overnight for service. A fire in the shop destroys four customer vehicles, and one customer alleges the shop was negligent. Which coverage is specifically designed for damage to customers' autos in the shop's care?

• A. Builders risk coverage
• B. Garagekeepers coverage
• C. The customers' uninsured motorist coverage
• D. The shop's own auto physical damage coverage

70. An office manager in Doral asks her assistant to drive his own car to pick up catering for a client event, and he causes an accident on the way. The injured party sues the employer. Which commercial coverage responds to the employer's vicarious liability?

• A. The assistant's homeowners liability coverage
• B. The firm's commercial property policy
• C. Non-owned auto liability coverage under the firm's commercial auto program
• D. Workers' compensation insurance

71. A customer at a Dunedin garden center slips on a wet walkway, breaks a wrist, and sues the store. Under the store's commercial general liability policy, which coverage part addresses this bodily injury claim from premises operations?

• A. The products recall coverage
• B. The medical payments coverage exclusively, since a lawsuit was filed
• C. The bodily injury and property damage liability coverage
• D. The personal and advertising injury coverage

72. A Boca Raton marketing agency is sued after its client's radio spot allegedly disparaged a competitor's business reputation. Which commercial general liability coverage part is designed for offenses like defamation arising from advertising?

• A. Bodily injury liability coverage
• B. Employment practices liability coverage
• C. Products-completed operations coverage
• D. Personal and advertising injury liability coverage

73. A child visiting a Navarre bicycle shop trips over a display stand and needs stitches. The shop wants the family's urgent-care bill paid promptly, with no fault admitted and no lawsuit. Which commercial general liability coverage serves this goodwill purpose?

• A. Property damage liability coverage
• B. Medical payments coverage
• C. Liquor liability coverage
• D. The each-occurrence limit buyback

74. Two liability policies differ in their coverage triggers: one responds to injury that happens during its policy period regardless of when the claim is reported, while the other responds only to claims first made during its period. Which labels fit these two forms, in order?

• A. Occurrence form, then claims-made form
• B. Primary form, then excess form
• C. Named-peril form, then open-peril form
• D. Claims-made form, then occurrence form

75. A consulting firm's claims-made liability policy shows a retroactive date of January 1, 2022. In 2026, while the policy is in force, a client first asserts a claim alleging harmful advice delivered in 2020. How does the policy respond?

• A. The claim converts the policy to an occurrence form
• B. The claim is excluded because the alleged wrongful act took place before the retroactive date
• C. The claim is covered because it was first made during the policy period
• D. The claim is covered because retroactive dates apply only to property losses

76. Months after an Estero electrician finished rewiring a restaurant and left the job site, faulty splicing sparks a fire that damages the dining room. Under the electrician's commercial general liability policy, which hazard does this claim fall under?

• A. The products-completed operations hazard, because the work was finished and the loss occurred away from the insured's premises
• B. The care, custody, and control exposure
• C. The products-completed operations hazard
• D. The premises and ongoing operations hazard

77. An insurance agency in Weston recommends the wrong coverage, and a client suffers an uninsured loss, then sues the agency for the financial harm. Why will the agency's commercial general liability policy not respond, and what policy should the agency carry?

• A. The agency needs a fidelity bond to cover the client's economic loss
• B. The CGL lapses whenever a client sues; only umbrella coverage responds
• C. The claim is covered under the CGL's medical payments section
• D. The CGL covers only bodily injury, property damage, and enumerated offenses; a professional liability or errors and omissions policy covers negligent advice

78. A warehouse worker in Groveland badly injures his back lifting pallets. He never has to prove his employer did anything wrong to receive medical and wage benefits, but he generally cannot sue the employer for negligence. Which two workers' compensation principles does this illustrate?

• A. No-fault benefits and the exclusive remedy doctrine
• B. Adverse selection and moral hazard
• C. Subrogation and salvage
• D. Contributory negligence and assumption of risk

79. A roofing company's workers' compensation and employers liability policy has two main insuring parts. Part One pays statutory benefits to injured workers. When would Part Two, employers liability, come into play?

• A. When the employer wants to cover customers injured on premises
• B. Only after the state guaranty fund is exhausted
• C. Whenever medical bills exceed the statutory schedule
• D. When an employment-related injury claim falls outside the workers' compensation statute, such as a suit by an injured worker's spouse for loss of consortium

80. After a compensable forklift accident, an injured Auburndale employee receives payment of hospital bills, partial wage replacement while unable to work, and retraining for lighter duties. Which categories of workers' compensation benefits do these represent?

• A. Death benefits, survivor benefits, and burial expenses
• B. Medical benefits, disability income benefits, and rehabilitation benefits
• C. Unemployment compensation and severance pay
• D. Liability damages, punitive damages, and court costs

81. A Trinity homeowner is sued for $1.6 million after a serious boating accident. His homeowners liability limit is far lower, but he carries a personal umbrella policy. How does the umbrella respond once the underlying policy pays its limit?

• A. It provides excess limits above the underlying policy, paying the covered judgment up to the umbrella limit
• B. It pays only the first dollar of loss, with the homeowners policy excess
• C. It refunds the underlying premium and cancels
• D. It covers only automobile exposures, never boating

82. An umbrella insurer requires its Palm Harbor policyholder to maintain auto liability at specified underlying limits. The insured lets the auto policy lapse, then causes a severe accident. How does the umbrella typically respond?

• A. It pays double its limit as a penalty against the insurer
• B. It voids all coverage retroactively to inception
• C. It drops down and pays from the first dollar
• D. It pays as though the required underlying limit were still in force, leaving the insured personally responsible for that layer

83. The owner of a small Mount Dora gift shop wants property coverage on her inventory, liability protection, and business income coverage bundled in one convenient package built for smaller, lower-hazard businesses. Which policy fits?

• A. A workers' compensation policy
• B. A businessowners policy
• C. A personal umbrella policy
• D. An ocean marine cargo policy

84. A bookkeeper at a Clermont HVAC company quietly diverts $85,000 of company funds to personal accounts over three years. Which commercial insurance protects the employer against this kind of loss?

• A. Directors and officers liability coverage
• B. Business income coverage
• C. Employee dishonesty coverage under a commercial crime policy
• D. Commercial general liability coverage

85. A Sumter County builder must guarantee to a school district that it will complete a gymnasium according to contract. A surety company issues the required bond. Which party is the obligee under this arrangement?

• A. The builder who must perform the work
• B. The subcontractors hired by the builder
• C. The surety company issuing the guarantee
• D. The school district, to whom performance is owed

86. An underwriting instructor contrasts suretyship with insurance. Which statement captures a fundamental difference between a surety bond and an insurance policy?

• A. The surety theoretically expects no losses and may recover any payment from the defaulting principal
• B. Insurance policies always involve three parties while bonds involve two
• C. Surety bonds spread expected losses across a large pool of principals
• D. A surety cannot require collateral or indemnity agreements

87. During a break-in at a Palmetto pawn shop, robbers take cash from the register at gunpoint during business hours. In commercial crime insurance terms, what distinguishes robbery from burglary?

• A. The two terms are interchangeable in crime forms
• B. Robbery requires an employee accomplice; burglary does not
• C. Robbery occurs only at night; burglary only during business hours
• D. Robbery involves taking property from a person by violence or threat; burglary involves forcible entry into premises shown by visible marks

88. A Naples charter-fishing captain asks his agent why his sizable boat cannot simply ride on his homeowners policy. What is the accurate answer about insuring larger watercraft and their liability exposure?

• A. Boats can only be insured through the federal government
• B. Homeowners forms sharply limit watercraft property coverage and exclude most larger-boat liability, so a separate watercraft or marine policy is needed
• C. Homeowners policies fully cover any boat the insured owns anywhere
• D. Watercraft liability is covered as long as the boat is docked at home

89. An insured's personal auto policy includes coverage that pays reasonable medical expenses for the insured and passengers injured in her car, regardless of who caused the crash. In states where it is sold, what is this first-party coverage called?

• A. Collision coverage
• B. Gap coverage
• C. Medical payments coverage
• D. Property damage liability coverage

90. A Bartow cabinet shop classifies its full-time installers as independent contractors to avoid buying workers' compensation coverage, though the shop sets their hours, supplies their tools, and directs every detail of the work. Why is this classification risky?

• A. Courts and regulators look at actual control over the work, not labels, so these workers are likely employees who must be covered
• B. Installers can never qualify as employees under any test
• C. Workers' compensation applies only to office workers
• D. Labels in a written contract always control employment status

91. A landscaping company's general liability policy shows one limit that caps payment for any single accident and another that caps everything the policy will pay during the whole policy year. What are these two limits called?

• A. The coinsurance limit and the salvage limit
• B. The each-occurrence limit and the general aggregate limit
• C. The split limit and the combined single limit
• D. The deductible and the self-insured retention

92. A contractor carries commercial general liability limits of $300,000 each occurrence and a $600,000 general aggregate. During one policy year it suffers three separate covered occurrences with damages of $250,000, $200,000, and $300,000, in that order. How much does the insurer pay for the third occurrence?

• A. $300,000
• B. $150,000
• C. $0
• D. $600,000

93. A driver carries auto liability split limits of $100,000 per person and $300,000 per accident for bodily injury. One at-fault crash injures three people, who win judgments of $120,000, $80,000, and $60,000 respectively. How much does the insurer pay in total for bodily injury?

• A. $260,000
• B. $240,000
• C. $100,000
• D. $300,000

94. An auto policy's liability limits are quoted as one hundred, three hundred, and fifty, in thousands of dollars. What does the third number in this split-limit format represent?

• A. The bodily injury limit per person
• B. The policy's annual aggregate limit
• C. The medical payments limit per occupant
• D. The property damage liability limit per accident

95. A liability insurer spends $95,000 defending its insured against a covered lawsuit and then pays a $200,000 settlement, which equals the policy's each-occurrence limit. How do standard liability forms usually treat those defense costs?

• A. Defense costs are shared equally between insurer and insured
• B. Defense costs reduce the limit, leaving only $105,000 for settlement
• C. Defense costs are paid in addition to the limit of liability, so the full $200,000 remained available for the settlement
• D. Defense costs are the insured's personal responsibility

96. A frivolous lawsuit accuses a Deerfield Beach retailer of causing an injury that plainly never happened on its premises. The retailer's liability insurer still hires defense counsel. Why does the insurer defend a groundless suit?

• A. The insurer defends because the allegations, if true, would fall within coverage, and the duty to defend is broader than the duty to indemnify
• B. Defending prevents the claim from counting against the aggregate limit
• C. The duty to defend is broader than the duty to indemnify and applies even to groundless, false, or fraudulent allegations within coverage
• D. State law requires insurers to defend every lawsuit against a policyholder

97. Served with a lawsuit over a customer injury, a Vero Beach shop owner sets the papers aside for two months, assuming her insurer will find out on its own. Which policy conditions has she jeopardized?

• A. The appraisal and abandonment conditions
• B. The coinsurance and vacancy conditions
• C. The liberalization and assignment conditions
• D. The duties to give prompt notice and to immediately forward suit papers to the insurer

98. Feeling guilty after a minor parking-lot collision, an insured writes the other driver a personal check for $2,000 on the spot and promises the insurer will send more. What problem has the insured created under his liability coverage?

• A. He triggered the policy's coinsurance penalty
• B. He transformed the claim into a workers' compensation matter
• C. He automatically doubled his deductible
• D. He violated the condition against making voluntary payments or assuming obligations without the insurer's consent

99. After paying a Margate homeowner for water damage a plumbing contractor caused, the insurer prepares to recover from the contractor, only to learn the homeowner signed a release waiving all claims against him after the loss. Why does this matter?

• A. The release only affects punitive damages, which are uninsurable anyway
• B. The release impaired the insurer's subrogation rights, which can jeopardize the insured's recovery under the policy
• C. Releases signed after a loss automatically transfer the claim to the contractor's insurer
• D. Subrogation applies only to auto claims, so nothing changes

100. An insured borrows a friend's pickup for a weekend move and causes an accident. Both the friend's auto policy and the insured's own policy could apply. How do personal auto other-insurance provisions typically sort out payment for the borrowed vehicle?

• A. Neither policy applies to borrowed vehicles
• B. The owner's policy on the vehicle is primary, and the driver's own policy is excess
• C. Both policies split the loss fifty-fifty regardless of limits
• D. The driver's policy is always primary wherever he drives

101. A commercial general liability policy covers a business and its two partners as insureds. One partner sues the other over an injury, and the insurer must analyze coverage. What does the separation of insureds provision require?

• A. Each insured receives its own full set of policy limits
• B. The policy applies separately to each insured against whom a claim is made, as though each had its own policy, except for the shared limits
• C. A claim by one insured against another is always excluded
• D. All insureds lose coverage when any insured is sued

102. A claimant who won a judgment against an insured wants to sue the liability insurer directly for payment, while the insured separately wonders if she can sue her insurer before the underlying case is resolved. What do standard liability policy provisions say about legal action against the insurer?

• A. Suits are allowed only after the policy expires
• B. Only the state insurance regulator may sue an insurer
• C. No action may be brought until the insured's obligation is determined by judgment or agreed settlement, and policy conditions have been met
• D. Anyone may sue the insurer at any time during the claim

103. A policy insures a Havana, Florida farm partnership and lists one partner first on the declarations. The insurer needs to send a cancellation notice and collect an audit premium. What role does the first named insured play under commercial policy conditions?

• A. The listing order on the declarations has no legal significance
• B. The first named insured has fewer rights than the other insureds
• C. Each insured must separately consent to every policy transaction
• D. The first named insured acts for all insureds in matters such as premium payment, receiving cancellation notice, and requesting changes

104. While assisting with the defense of a covered lawsuit at the insurer's request, a Milton contractor misses several days of work to attend hearings. He also posted a required appeal bond. Where in his liability policy would he find reimbursement for expenses like these?

• A. In the supplementary payments provisions, which pay certain defense-related expenses in addition to the limits
• B. In the coinsurance clause
• C. In the pollution exclusion
• D. In the declarations page schedule of covered autos

105. In November, a general liability underwriter reviews a policy whose aggregate limit was nearly exhausted by a bad claim year. The insured asks whether the aggregate refills when the policy renews. What is the correct answer?

• A. Yes, a new aggregate limit applies to each policy period at renewal
• B. The aggregate resets monthly during the policy term
• C. No, the aggregate is a lifetime cap that never resets
• D. Only claims-made policies carry aggregate limits

106. A Jacksonville paralegal decides to become a Florida general lines agent and asks what pre-licensing education the state requires before she can qualify for the 2-20 license. What is the standard classroom requirement?

• A. A 200-hour approved pre-licensing course in general lines subjects
• B. A 40-hour online orientation with no approval needed
• C. No education, only a sponsoring insurer's recommendation
• D. A four-year college degree in risk management

107. A newly licensed general lines agent in Miami wants to plan her compliance calendar. How much continuing education must a Florida agent complete, and how often?

• A. 24 hours every two years
• B. 10 hours every five years
• C. 50 hours every year
• D. None, once the license is issued

108. A Pensacola agent leaves the industry for another career but keeps her general lines license active without any insurer appointment. Under Florida law, what eventually happens to a license that goes unappointed?

• A. It expires after 48 months without an appointment
• B. It continues indefinitely as long as fees are paid
• C. It converts automatically to an adjuster license
• D. It is suspended after 30 days without appointment

109. Preparing his Florida general lines license application, a Naples applicant budgets for state costs. What application fee does he pay to the state when applying for the license?

• A. $500
• B. $50
• C. $5
• D. Nothing; Florida charges no application fee

110. A newly licensed 2-20 agent in Orlando is eager to start selling homeowners policies for a particular insurer. Besides holding her license, what must be in place before she may lawfully transact business on that insurer's behalf?

• A. A surety bond filed with the county clerk
• B. A notarized letter from her pre-licensing instructor
• C. An appointment from that insurer
• D. A certificate of authority in her own name

111. At a career fair, a 2-20 licenseholder describes the kinds of coverage her authority reaches when she is properly appointed. Which grouping best describes that authority?

• A. Title insurance exclusively
• B. Life insurance and variable annuities only
• C. Reinsurance treaties between insurers
• D. Property, casualty, surety, marine, and miscellaneous lines

112. An agency owner in Tampa hires a salaried employee to help office walk-ins with quotes and policy questions under the owner's supervision, without becoming a full general lines agent. Which Florida license fits this role?

• A. A surplus lines agent license
• B. A reinsurance intermediary license
• C. A customer representative license
• D. A public adjuster license

113. To win a client, a Coral Springs agent falsely tells a homeowner that her current insurer is about to fail and persuades her to replace a policy that actually serves her well. Under Florida's unfair trade practice rules, what has the agent committed?

• A. Twisting, inducing policy replacement through misrepresentation
• B. Coercion, since the client felt pressured
• C. Lawful competition, since replacement benefits the market
• D. Rebating, since the client received something of value

114. While writing an auto policy for a Hollywood customer, an agent quietly adds a motor club membership and an accidental death product to the transaction without explaining they are optional extras with separate charges. What is this prohibited practice called in Florida?

• A. Defamation
• B. Boycott
• C. Churning
• D. Sliding

115. A bank officer in Fort Myers tells a small-business borrower that his loan will close only if he buys the property insurance through the bank's affiliated agency. Which unfair practice does this demand illustrate?

• A. Coercion in the placement of insurance
• B. Permissible cross-selling
• C. False advertising of policy benefits
• D. Misappropriation of premium funds

116. An agency's social media ads promise that a particular homeowners policy covers flood, when the policy plainly excludes it. No sale has even occurred yet. Under Florida's trade practice rules, how is this advertising treated?

• A. As unlawful misrepresentation and false advertising, because untrue statements about policy terms violate the code regardless of whether anyone buys
• B. As a violation only if a hurricane later causes flood damage
• C. As unlawful misrepresentation and false advertising of policy terms, even before any sale
• D. As harmless marketing puffery

117. Hoping to sink a competitor, a Sarasota agency circulates a flyer falsely claiming a rival insurer is financially unstable and about to be taken over by regulators. Which unfair trade practice has the agency committed?

• A. Defamation of an insurer
• B. Unfair discrimination
• C. Sliding
• D. Twisting

118. Two Clearwater homeowners have identical homes, identical claim histories, and qualify for the same rating class, yet an agent quotes one a sharply higher premium because of a personal dislike. Which principle of Florida insurance law does this violate?

• A. The rule against charging any premium above filed minimums
• B. The ban on written binders
• C. The requirement that all premiums be identical statewide
• D. The prohibition on unfair discrimination between insureds of the same class and hazard

119. A Kissimmee agent collects a $3,100 premium check from a commercial client on Friday and uses the money over the weekend to cover his office rent, planning to forward the premium the following month. How does Florida law characterize the agent's handling of these funds?

• A. As lawful so long as the client eventually gets a policy
• B. As a breach of fiduciary duty; premium funds are trust funds that must be promptly remitted, not used personally
• C. As a problem only if the client complains in writing
• D. As acceptable cash-flow management for small agencies

120. A retired teacher in Ocala studies for a license because friends keep asking her to write their auto policies, and she plans to insure mainly her own rental properties, family members, and a few acquaintances. Why might Florida deny or question her license application?

• A. Licenses are limited to applicants sponsored by banks
• B. Florida restricts licenses sought primarily to write controlled business on the applicant's own interests and family
• C. Retirees are ineligible for insurance licenses
• D. Rental property owners may never hold insurance licenses

121. An insurer receives a homeowner's hurricane claim and simply ignores it for months, never acknowledging the filing, never investigating, and never explaining a denial, as it has done with dozens of similar claims. Which category of Florida violation does this pattern represent?

• A. Twisting
• B. Controlled business violations
• C. Lawful claims triage during storm season
• D. Unfair claim settlement practices

122. A restaurant owner in Palm Bay inflates a small grease-fire claim, adding pre-existing damage and fake receipts to nearly triple the payout. Under Florida law, what has the owner committed, and who investigates it?

• A. A civil billing dispute handled only by the insurer
• B. Criminal insurance fraud, investigated by the state's dedicated fraud investigators
• C. A permissible negotiation tactic
• D. A rating error correctable by refiling forms

123. A Gainesville agent is convicted of a felony involving breach of trust, and separately a routine audit finds she misstated her employment history on her original license application. What may the Florida licensing authority do about her license?

• A. Suspend or revoke it, since felony convictions and material misstatements on applications are grounds for discipline
• B. Only raise her continuing education hours
• C. Nothing, because discipline requires a customer complaint first
• D. Transfer her license to another state

124. An unlicensed office assistant at a Deltona agency quotes coverage, explains policy terms, and signs applications whenever the licensed agents are busy. The agency owner insists this is fine because the assistant never gets commission. What is wrong with this arrangement?

• A. Nothing; only receiving commission requires a license
• B. Quoting, explaining terms, and completing applications are transacting insurance, which requires a license regardless of how the person is paid
• C. The arrangement is legal if customers do not object
• D. The assistant needs only a notary commission

125. A Lakeland agency routinely pays a local real estate broker a share of commissions for steering home buyers to the agency, though the broker holds no insurance license. How does Florida law view these payments?

• A. As lawful if under a written contract
• B. As unlawful; commissions may be shared only with appropriately licensed and appointed persons
• C. As lawful referral marketing without restriction
• D. As lawful because real estate and insurance are related fields

126. After moving her office across Tallahassee, an agent keeps using her old address on file with the state for over a year because updating it seems like a hassle. Why is this a compliance problem under the Florida insurance code?

• A. Address changes require retaking the licensing course
• B. Only insurers, not agents, report addresses
• C. Addresses matter only for premium tax purposes
• D. Licensees must keep their addresses current with the state so regulators can reach them, and failing to update is a violation

127. During a state review, a Brandon agency cannot produce records for dozens of policies it sold over recent years, including applications and premium accounting. What does Florida law expect of agents regarding transaction records?

• A. Records are required only for claims that end in lawsuits
• B. Records may be destroyed as soon as a policy is issued
• C. Only insurers must keep any records
• D. Agents must keep records of insurance transactions available for examination by regulators

128. A walk-in customer at a Port Charlotte agency asks whether the person helping him is an agent for a specific company or a broker shopping among carriers, and what 'transacting insurance' even means in Florida. Which activities does the Florida code treat as transacting insurance?

• A. Only advertising on television and radio
• B. Only the physical printing of policy documents
• C. Only the payment of claims after a loss
• D. Solicitation, negotiation, and effectuation of insurance contracts, along with transaction of related matters

129. A Winter Springs agency with three locations designates no licensed agent to oversee two of its offices, leaving customer representatives unsupervised there for months. Why does this violate Florida law?

• A. Only agencies with ten or more employees need any oversight
• B. Customer representatives never need supervision
• C. Each agency location must have a designated agent in charge responsible for supervising the office
• D. Agencies may have only one office statewide

130. An applicant preparing Florida license paperwork asks her sponsoring agency why the state takes her fingerprints. What is the purpose of fingerprinting in the licensing process?

• A. To register the applicant with the county property appraiser
• B. To verify the applicant's continuing education hours
• C. To run state and federal criminal background checks on the applicant
• D. To activate the applicant's insurer appointments

131. A Miami Springs agent binds coverage through what he believes is a legitimate carrier, but the entity turns out to be an unauthorized offshore operation that later collapses without paying claims. What risk did the agent personally take by placing business with an unauthorized insurer?

• A. Only the customer bears all consequences
• B. The guaranty association reimburses the agent's clients fully in every case
• C. None; agents are immune when an insurer fails
• D. Florida can hold the agent personally liable for unpaid claims, in addition to license discipline and criminal exposure

132. A Palm Coast homeowner believes her insurer lowballed and stalled her sinkhole claim in bad faith. Beyond filing a complaint with regulators, what does Florida law generally provide for policyholders harmed by an insurer's bad-faith claim handling?

• A. No recourse of any kind beyond the policy limits
• B. A civil remedy allowing the insured to seek damages after giving the insurer statutory notice and a chance to cure
• C. Automatic criminal conviction of the adjuster
• D. Free replacement coverage from the state

133. An insurer wants to reward a Fort Pierce agent's production by letting him keep a portion of premiums as a bonus he privately promises to split with favored customers, outside any filed plan. Why is the customer-splitting piece of this arrangement legally dangerous in Florida?

• A. The arrangement is safe as long as it stays private
• B. Bonuses of any kind are illegal for agents
• C. Only cash gifts over $10,000 raise concerns
• D. Returning part of the premium or commission to customers as an inducement is rebating, which is unlawful unless done strictly within the conditions Florida law allows

134. During a hurricane recovery, a Cocoa Beach roofer offers to waive homeowners' deductibles and handle their insurance paperwork if they sign contracts on the spot, telling them everyone does it. Which Florida principle should an agent explain to a client tempted by this pitch?

• A. Deductibles apply only to auto insurance
• B. Insurers routinely reimburse deductibles after closing a claim
• C. A contractor absorbing or rebating the deductible invites fraud; deductibles are the insured's responsibility, and false claims to disguise them are criminal
• D. Waiving deductibles is a standard lawful discount

135. An established Georgia property agent moves her book of business south and wants to serve walk-in clients from a new Fort Walton Beach storefront. What distinguishes the Florida resident license she now needs from the nonresident license she might have held before moving?

• A. A resident license is for those whose home state is Florida; a nonresident license lets an out-of-state agent transact in Florida based on a home-state license in good standing
• B. The two license types are identical in every requirement
• C. Resident licenses are issued only to insurance company employees
• D. Nonresident licenses allow selling without holding any home-state license

136. A Sunrise driver rear-ends another car and injures her own back. Her passenger neighbor is startled that her medical bills get paid under her own auto policy even though she caused the crash. Which feature of Florida's motor vehicle law explains this?

• A. Florida's assigned risk plan for bad drivers
• B. Florida's no-fault system, under which personal injury protection pays the insured's own injury benefits regardless of fault
• C. A court order required before any benefits are paid
• D. The collision coverage on her policy

137. Before registering his sedan in Broward County, a new Florida resident asks his agent which two coverages state law requires him to carry as a condition of registration. What should the agent answer?

• A. Personal injury protection and property damage liability
• B. Uninsured motorist and medical payments coverage
• C. Collision and comprehensive coverage
• D. Bodily injury liability and rental reimbursement

138. The declarations page of a Hialeah driver's auto policy lists PIP among her coverages, and she asks her agent how high its medical and disability payout can go. What cap does the no-fault statute set?

• A. Unlimited benefits for life
• B. $1,000 in medical and disability benefits
• C. $10,000 in medical and disability benefits
• D. $100,000 in medical and disability benefits

139. After a covered crash in Opa-locka, an insured incurs $9,000 in reasonable, medically necessary hospital charges and sought care right away. Applying Florida's statutory reimbursement rate for medical benefits, how much does personal injury protection pay toward these charges?

• A. $9,000
• B. $4,500
• C. $7,200
• D. $5,400

140. A self-employed handyman in Immokalee cannot work for a month after a covered crash, losing $3,000 in gross income. Under Florida's personal injury protection disability benefit, what portion of that lost month is payable, subject to the overall limit?

• A. $1,800
• B. $3,000
• C. $900
• D. $2,400

141. A Pahokee crash victim dies of her injuries after personal injury protection has already paid substantial medical benefits. What does Florida's statute provide for death benefits under the coverage?

• A. Nothing, because medical payments exhaust the coverage
• B. $50,000 payable only to a surviving spouse
• C. A refund of all premiums paid on the policy
• D. $5,000 per individual, payable in addition to the medical and disability benefits already paid

142. Three weeks after a minor collision in Naples, a sore-necked driver finally decides to see a doctor and submit the bills to his personal injury protection coverage. Why may his medical benefits be denied entirely?

• A. Only emergency room visits qualify for any PIP payment
• B. PIP never covers neck injuries
• C. Florida requires initial services and care within 14 days after the accident for medical benefits to be payable
• D. He was required to sue the other driver first

143. An agent explains Florida's financial responsibility law for property damage to a first-time car owner in Belle Glade. What minimum property damage liability protection must every owner or operator of a registered vehicle maintain?

• A. $25,000 per damaged vehicle
• B. $10,000 for damage to property of others in any one crash
• C. No property damage protection is required in Florida
• D. $1,000 for damage to property of others per year

144. Rather than carrying a separate property damage liability limit, a Weston driver's policy provides a single combined limit for bodily injury and property damage. Under Florida's financial responsibility law, what combined amount satisfies the property damage requirement this way?

• A. At least $300,000 of combined coverage per policy year
• B. At least $10,000 of combined coverage for any one crash
• C. Combined limits can never satisfy the statute
• D. At least $30,000 of combined property damage and bodily injury liability for any one crash

145. A Deerfield Beach pedestrian with no car and no policy of her own is struck and hurt by an insured motorist while walking to work. Under Florida's no-fault law, whose personal injury protection pays her benefits?

• A. The state pays all pedestrian injury claims directly
• B. No one; pedestrians are outside the no-fault system
• C. The striking vehicle's PIP covers her as a pedestrian struck by the insured motor vehicle
• D. Her employer's workers' compensation policy exclusively, even off the clock

146. Shopping for homeowners coverage in Vero Beach, a buyer notices insurers quoting several hurricane deductible choices. Which set of alternatives does Florida law require insurers to offer on personal residential policies?

• A. $500, 2 percent, 5 percent, and 10 percent of the policy dwelling limits
• B. Whatever deductible the adjuster selects after a storm
• C. $250, 1 percent, 15 percent, and 25 percent of the dwelling limits
• D. One mandatory 6 percent deductible for every home

147. A Melbourne Beach home insured with a $300,000 dwelling limit carries a 2 percent hurricane deductible. A hurricane causes $50,000 of covered wind damage. How much does the insurer pay after applying the hurricane deductible?

• A. $44,000
• B. $40,000
• C. $50,000
• D. $49,000

148. A Palm Beach Gardens homeowner with a $400,000 dwelling limit chose a 5 percent hurricane deductible to trim her premium. Her neighbor asks how many dollars she would shoulder before hurricane coverage begins paying. What is her hurricane deductible in dollars?

• A. $5,000
• B. $20,000
• C. $2,000
• D. $40,000

149. Florida regulators require that a percentage-based hurricane deductible be clearly disclosed rather than buried in fine print. Why is the distinction between a percentage of the dwelling limit and a percentage of the loss so important to policyholders?

• A. Because percentage deductibles apply only to detached garages
• B. Because the percentage applies to the agent's commission
• C. Because a percentage of the dwelling limit produces a fixed, often large dollar deductible regardless of the size of the loss
• D. Because percentage deductibles shrink as losses grow

150. After three private insurers decline to write wind coverage on an older Key Largo home, the agent turns to a state-created insurer that exists to cover Florida property risks unable to find coverage in the private market. Which entity is this?

• A. Citizens Property Insurance Corporation
• B. The National Council on Compensation Insurance
• C. The Federal Deposit Insurance Corporation
• D. A private reinsurance syndicate

151. A student asks why Florida property insurers can survive a catastrophic hurricane season without collapsing. One state program reimburses insurers for a share of their catastrophic hurricane losses in exchange for premiums they pay into it. What is this program?

• A. The Social Security trust fund
• B. The Florida Hurricane Catastrophe Fund
• C. A voluntary gift fund supported by policyholder donations
• D. The federal crop insurance program

152. Fire completely destroys an insured Century home. The dwelling was insured for $250,000, and the insurer now argues the house was really worth less and wants to pay a reduced amount. How does Florida's valued policy concept generally treat a total loss to a building by a covered peril?

• A. The insured collects only the original purchase price of the home
• B. The insurer may reappraise the building after the loss and pay market value
• C. The insurer generally pays the face amount of the policy on the building, since that value was fixed when the policy was written
• D. Total losses are settled at 50 percent of the limit by law

153. A Spring Hill homeowner worries about ground movement damage after seeing news about Florida sinkholes. Her agent explains the difference between the coverage every Florida property insurer must provide and the coverage she can add by endorsement. Which statement reflects that split?

• A. All ground movement of any kind is automatically covered in full
• B. Sinkhole coverage is mandatory while collapse coverage is prohibited
• C. Neither sinkholes nor ground collapse can be insured in Florida
• D. Insurers must cover catastrophic ground cover collapse, while broader sinkhole loss coverage is an optional addition

154. A Punta Gorda homeowner installs impact-rated windows, reinforced garage doors, and roof tie-down straps documented by a wind mitigation inspection. How does Florida law require her insurer to respond on her wind premium?

• A. The insurer must cancel the policy as over-improved
• B. The insurer must provide premium credits or discounts reflecting the reduced windstorm risk from qualifying mitigation features
• C. Mitigation affects claims payments but never premiums
• D. Discounts apply only to commercial skyscrapers

155. A door-knocking contractor in North Port urges a homeowner to sign over her insurance claim rights so his company can bill the insurer directly for roof repairs and sue in her name if it wishes. How has Florida law addressed post-loss assignment agreements like this in recent reforms?

• A. Florida requires every claim to be assigned to a contractor
• B. Florida has sharply restricted post-loss assignment of property insurance benefits, curbing the practice for newer policies
• C. Assignments are unregulated private contracts the state ignores
• D. Only assignments to out-of-state contractors are permitted

156. A Port Richey homeowner and her insurer disagree over a $28,000 water damage settlement, and she dreads the cost of suing. Her agent mentions a state-sponsored alternative for residential property claim disputes. What does Florida offer?

• A. A requirement that disputes be filed in federal court
• B. A rule that the insurer's first offer is always final
• C. Free demolition of the disputed property
• D. A mediation program administered through the state for disputed residential property claims

157. After a Tamarac crash, a driver with minor soft-tissue soreness that resolves in days wants to sue the at-fault driver for pain and suffering. Under Florida's no-fault framework, what generally limits this kind of lawsuit?

• A. Pain and suffering claims are paid automatically by PIP
• B. Any injury, however minor, supports a full tort suit
• C. Lawsuits after car crashes are entirely prohibited in Florida
• D. Suits for pain and suffering generally require crossing a serious-injury threshold, such as significant and permanent injury, scarring, or death

158. A Live Oak driver cancels his auto policy to save money but keeps his registration and continues driving. What consequence does Florida law impose for failing to maintain the required insurance on a registered vehicle?

• A. Nothing, as long as no accident occurs
• B. Confiscation of the vehicle by the insurer
• C. An automatic prison sentence
• D. Suspension of the driver license and registration until coverage is restored and a reinstatement fee is paid

159. A Daytona rider assumes the PIP rules that govern his sedan follow him onto his motorcycle. What should his agent clarify about how the state's no-fault mandate treats two-wheeled vehicles?

• A. Motorcycles carry double PIP limits by statute
• B. The no-fault law's required coverage applies to motor vehicles with four or more wheels, so motorcycles fall outside the PIP requirement
• C. PIP on his car automatically covers him on his motorcycle in all cases
• D. Motorcyclists are barred from buying any insurance

160. A Wellington driver adds bodily injury liability limits to her auto policy. Her insurer then presents an additional coverage that Florida law requires to be offered with bodily injury limits, one she can decline only by signed rejection. Which coverage is this?

• A. Gap coverage
• B. Uninsured motorist coverage
• C. Roadside assistance coverage
• D. Rental reimbursement coverage

161. A new customer representative wants to understand Florida's split regulatory structure. One state body oversees producers, adjusters, and consumer help; another supervises the companies themselves, including their rates and forms. Which description assigns these roles correctly?

• A. The Office of Insurance Regulation licenses agents, while the Department of Financial Services approves insurer rate filings
• B. The Department of Financial Services oversees agents and consumers, while the Office of Insurance Regulation oversees insurers, rates, and forms
• C. Both functions belong to the federal government
• D. County tax collectors license both agents and insurers

162. A newly formed insurance company wants to begin selling homeowners policies to Florida consumers. Before writing its first policy in the state, what must the company obtain?

• A. Written permission from competing insurers
• B. A surety bond posted with each county courthouse
• C. A certificate of authority from the Office of Insurance Regulation
• D. A general lines agent license

163. An agent cannot place an unusual amusement-ride liability risk with any authorized Florida insurer despite genuine attempts. She turns to a specialty market outside the state's admitted system. Which statement about this surplus lines placement is accurate?

• A. It requires a licensed surplus lines agent and a diligent effort to place the risk with authorized insurers first, and the coverage lacks guaranty fund protection
• B. Any agent may bind any risk with any unlicensed insurer at will
• C. Surplus lines policies carry the same guaranty fund protection as admitted policies
• D. Surplus lines rates must first be approved by the Office of Insurance Regulation

164. A mid-sized Florida property insurer is declared insolvent with thousands of open homeowner claims. Which entity steps in to pay covered claims of the failed insurer, within statutory limits?

• A. The failed insurer's marketing department
• B. The Internal Revenue Service
• C. The Florida Insurance Guaranty Association
• D. Each policyholder's mortgage lender

165. A Florida agency represents three carriers: one incorporated in Florida, one incorporated in Ohio, and one domiciled in Bermuda. How does the Florida insurance code classify these three insurers, in order?

• A. Admitted, surplus, and captive
• B. Domestic, foreign, and alien
• C. Foreign, domestic, and alien
• D. Alien, foreign, and domestic

166. Regulators arrive at a Florida insurer to review its claim files, underwriting decisions, complaint handling, and sales practices for compliance with the insurance code, quite apart from any solvency audit. What is this regulatory review called?

• A. A premium tax refund review
• B. A market conduct examination
• C. A certificate of authority application
• D. An underwriting profit audit by the guaranty association

167. A frustrated Cutler Bay policyholder cannot get her insurer to respond about a delayed roof claim and wants the state's help. Within Florida's regulatory structure, where should her agent direct her complaint?

• A. The federal housing agency
• B. The clerk of the county court, who mediates all insurance disputes
• C. The consumer services division of the Department of Financial Services
• D. The insurer's reinsurance broker

168. After a hurricane, a stranger with no license offers to negotiate a Naples homeowner's insurance claim for 20 percent of the payout, saying licenses are only for company employees. What does Florida law say about representing policyholders in claims for compensation?

• A. Anyone may adjust claims for a fee without any license
• B. Negotiating claims for an insured for compensation requires a public adjuster license, and unlicensed adjusting is illegal
• C. Only attorneys may ever discuss claims with insurers
• D. Licenses are needed only for claims above $1 million

169. Reviewing a Florida insurer's homeowners rate filing, regulators test the proposed rates against the state's basic rate standards. Which three conditions must rates satisfy under those standards?

• A. Rates must be set by the guaranty association
• B. Rates must not be excessive, inadequate, or unfairly discriminatory
• C. Rates must guarantee the insurer a fixed profit each year
• D. Rates must be identical for every insurer statewide

170. An unfamiliar company faxes a Miami agency attractive commercial property quotes. Its name appears in no state licensing records, its premiums are far below market, and it demands wire transfers to an overseas account. Before placing any client's coverage, what is the agent's essential duty?

• A. Place the business quickly before the low rates disappear
• B. Ask the company to promise in writing that it is legitimate
• C. Verify the company holds a Florida certificate of authority or is an eligible surplus lines insurer, and refuse to place business with an unauthorized entity
• D. Split the savings with the client to share the risk

171. A Naples boutique insures its business personal property for $150,000 under a policy with an 80 percent coinsurance clause and a $1,000 deductible. At the time a burst sprinkler ruins inventory worth $40,000, the total value of the business personal property is $250,000. What is the insurer's payment?

• A. $30,000
• B. $29,000
• C. $24,000
• D. $39,000

172. Marisol Vega insures her Sarasota home on an unendorsed HO-3. A supply line bursts inside a wall, ruining both the hardwood flooring of the dwelling and an expensive sofa. Her adjuster notes that the dwelling and the sofa are evaluated under two different causes-of-loss approaches. Which statement correctly describes the HO-3 structure?

• A. The dwelling is insured on an open-peril basis while personal property such as the sofa is insured only against the perils named in the form.
• B. Both the dwelling and the sofa are insured against named perils only, which is why the HO-3 is called the broad form.
• C. Both the dwelling and the sofa are insured on an open-peril basis, so the cause of loss is irrelevant for either item.
• D. The dwelling is insured against named perils only, while personal property receives open-peril protection.

173. Dario Fontaine of Winter Park wants his home policy to respond when a tipped paint can permanently stains an imported rug, a cause of loss that does not appear on any named-peril list. His agent recommends the homeowners form that extends open-peril protection to personal property as well as the dwelling. Which form is being recommended?

• A. The HO-8 modified coverage form, because it modifies the settlement basis for contents.
• B. The HO-5 comprehensive form, which insures both the dwelling and personal property on an open-peril basis.
• C. The HO-2 broad form, because it broadens the named perils that apply to contents.
• D. The HO-4 contents broad form, because it is the form designed specifically around personal property.

174. Priya Raman rents an apartment near downtown Orlando. She spent $6,000 upgrading the kitchen backsplash and light fixtures with her landlord's permission, owns furniture and electronics, and wants personal liability protection. Which homeowners form fits her situation?

• A. An HO-3, because it is the only form that can include liability coverage for a renter.
• B. An HO-4, which covers a tenant's personal property, provides personal liability, and includes an allowance for improvements the tenant has made.
• C. An HO-8, because the apartment building is older construction.
• D. An HO-6, because she does not own the building she lives in.

175. Cole Whitfield owns a sixth-floor condominium unit in Clearwater. The association's master policy insures the building's bare structure, while Cole is responsible for interior partitions, cabinetry, wall coverings, and everything he keeps in the unit. Which personal lines form is designed for his exposure?

• A. A DP-3, since the unit is part of a multi-family structure.
• B. An HO-5, because open-peril contents coverage is mandatory for condominiums.
• C. An HO-6, which provides a dwelling amount for interior alterations and fixtures within the unit plus coverage for his personal property.
• D. An HO-4, since he occupies but does not insure the whole building.

176. A 1926 bungalow in St. Augustine features plaster walls and ornate millwork. Rebuilding it exactly as it stands would cost far more than its market value, so a standard replacement cost form would create a moral hazard. Which homeowners form addresses this problem, and how does it settle a dwelling loss?

• A. The HO-8, which settles losses using common construction materials and methods that are functionally equivalent to the obsolete originals.
• B. The HO-2, which automatically reduces the dwelling limit to match market value each year.
• C. The HO-3 with an ordinance or law endorsement, which converts settlement to actual cash value.
• D. The HO-5, which pays full reproduction cost including custom millwork and plaster.

177. Tessa Nakamura carries an HO-2 on her Deltona home. During a family gathering, a wall-mounted television is accidentally knocked off its bracket and destroyed. Separately, a tree limb crashes through the roof during a thunderstorm. How should Tessa expect these two losses to be treated?

• A. Both losses are covered because the HO-2 insures against all accidental direct physical loss.
• B. The television is covered but the roof is not, because roof damage requires a windstorm rider.
• C. Neither loss is covered because the HO-2 excludes losses occurring inside the residence.
• D. The falling limb is covered as a named peril, but the knocked-over television is not, because accidental breakage of that kind is not on the HO-2 peril list.

178. Ruben Castile is buying his first rental house in Lakeland and asks for the least expensive dwelling policy available. His agent quotes a DP-1 basic form. Which combination of characteristics should Ruben expect from that form?

• A. Coverage identical to an HO-3 except that tenant-caused damage is excluded.
• B. Open-peril coverage on the dwelling with replacement cost settlement and built-in premises liability.
• C. Broad-form named perils with replacement cost on the dwelling but actual cash value on contents.
• D. A short list of named perils, loss settlement at actual cash value, and no personal liability coverage unless it is added separately.

179. A property manager in Bradenton compares the DP-2 and DP-3 for a portfolio of rental homes. She asks the underwriter to identify the single most important structural difference between the two forms. Which answer is correct?

• A. The DP-2 includes theft of the landlord's on-premises personal property, while the DP-3 excludes it.
• B. The DP-2 automatically includes personal liability, while the DP-3 requires an endorsement for it.
• C. The DP-3 settles dwelling losses at actual cash value, while the DP-2 pays replacement cost.
• D. The DP-3 insures the dwelling on an open-peril basis, while the DP-2 insures it only against the broad list of named perils.

180. Fire guts a tenant-occupied rental house in Ocala that Ingrid Solberg insures on a DP-3. The tenants must move out for the four months it takes to restore the house, and Ingrid loses the $1,800 monthly rent they had been paying. Which part of the dwelling policy responds to her lost rental income?

• A. There is no response; dwelling forms never cover loss of rent.
• B. Coverage E personal liability, because the tenants suffered a financial loss.
• C. Fair rental value coverage, which pays the rent the property could have produced while it is unfit for occupancy after a covered loss.
• D. The other structures coverage, because rental value attaches to the land.

181. A Pensacola machine shop is insured under a commercial property policy with both building coverage and business personal property coverage. After a fire, the adjuster must classify a permanently installed five-ton milling machine bolted into the foundation and a set of movable rolling tool chests. How are these items classified?

• A. Both items are business personal property because they are used in the insured's trade.
• B. The permanently installed milling machine falls under building coverage, while the movable tool chests are business personal property.
• C. The milling machine is uninsurable equipment, while the tool chests fall under building coverage.
• D. Both items are part of the building because they are located inside it.

182. A Coral Gables dry cleaner suffers a fire that destroys racks of customers' garments awaiting pickup along with the shop's own pressing equipment. The owner worries the customers' clothing is not his property to insure. Under the building and personal property coverage form, how is the customers' clothing addressed?

• A. It can be covered as personal property of others in the insured's care, custody, or control while at the described premises.
• B. It is excluded entirely because the insured holds no title to it.
• C. It is covered only if each customer is added to the policy as a named insured.
• D. It must be insured under the building coverage since it was inside the structure.

183. A kitchen fire forces a popular Delray Beach cafe to shut its doors for three months of repairs. The owner carries business income coverage with her commercial property policy. Which conditions must be satisfied before the business income coverage pays, and what does it pay for?

• A. The business must close permanently, and the policy then pays the market value of the enterprise.
• B. Any economic slowdown in the neighborhood triggers payment of projected profits for up to five years.
• C. Operations must be suspended because of direct physical loss to property at the described premises from a covered cause, and the policy then pays lost net income plus normal continuing operating expenses during the restoration.
• D. Revenue must fall below the prior year's level for any reason, and the policy pays the difference in gross sales.

184. A Jacksonville commercial printing firm must deliver election ballots under contract deadlines that cannot slip. After a covered electrical fire, the firm rents replacement presses at premium rates and pays overtime so production never stops. Which commercial property coverage is designed to pay these added costs even though operations were never suspended?

• A. Business income coverage, because income would otherwise have been lost.
• B. Ordinance or law coverage, because the rented presses meet current code.
• C. Leasehold interest coverage, because the firm had to lease replacement equipment.
• D. Extra expense coverage, which pays the additional costs incurred to avoid or minimize a suspension of operations.

185. Felicia Trent of Boca Raton owns a $28,000 engagement ring. Her homeowners policy applies a small special dollar limit for theft of jewelry and offers no protection if the ring simply vanishes without explanation. Her agent recommends scheduling the ring on a personal articles floater. Which advantage would the floater provide?

• A. It insures the scheduled ring at an agreed value against a much broader range of perils, typically including mysterious disappearance, usually with no deductible.
• B. It covers the ring only while it is stored in a bank vault.
• C. It doubles the homeowners special limits on all classes of valuable property.
• D. It converts the entire homeowners policy to open-peril coverage on all contents.

186. Prieto Site Development moves a hydraulic excavator among job sites across Lee County every few weeks. The company's commercial property policy covers property only at the described premises. Which type of policy is specifically designed to insure this kind of movable equipment wherever it goes?

• A. An inland marine contractors equipment floater, which follows mobile equipment from site to site.
• B. A builders risk policy, because the excavator is used in construction.
• C. A boiler and machinery policy, because the excavator contains pressurized hydraulic systems.
• D. A business auto policy, because the excavator has wheels and an engine.

187. After days of heavy rain near Kissimmee, a retention pond overflows and muddy water spreads across dozens of neighboring parcels, filling the ground floor of Omar Bashir's house. His backyard pool also overflowed the same week, wetting a small strip of his own patio. Under National Flood Insurance Program definitions, why does the first event qualify as a flood while the pool overflow does not?

• A. A flood must be a general and temporary inundation of normally dry land affecting multiple properties or a broad area, which the pond overflow was and the isolated pool overflow was not.
• B. A flood must be declared a federal disaster before any claim can be filed.
• C. A flood requires saltwater; freshwater events are never floods.
• D. Only rising rivers qualify as floods; surface water accumulation never does.

188. With a tropical system organizing in the Caribbean, a Cape Coral homeowner tries to buy her first flood policy on a Tuesday, hoping to be covered before the weekend. Separately, her neighbor is closing on a home purchase Friday and his lender requires flood coverage at closing. How does the standard National Flood Insurance Program waiting period treat these two buyers?

• A. Both are covered immediately, because flood policies always bind at the moment of purchase.
• B. The homeowner faces the standard 30-day waiting period, while the neighbor's policy can take effect at closing because coverage purchased in connection with making a loan is exempt from the wait.
• C. Neither can obtain coverage until the storm threat has passed.
• D. Both must wait a full year because hurricane season has already begun.

189. A Port St. Lucie couple owns a single-family home worth $600,000 with $180,000 in furnishings, all in a special flood hazard area. They ask their agent for the maximum protection available on the home and contents through the National Flood Insurance Program itself. What should the agent tell them?

• A. There is no dollar maximum; limits are set by the flood zone rating alone.
• B. Contents are automatically insured at half the building limit with no separate cap.
• C. The program can insure the full $600,000 building value as long as they pay the added premium.
• D. The program's maximum for a residential building is $250,000, with contents coverage capped at $100,000, so amounts above those limits require excess flood coverage in the private market.

190. Solberg Custom Homes is framing a new residence on a canal lot in Cape Coral. The structure will not be finished for nine months, and neither a homeowners policy nor a standard commercial property form fits a building that is only partially built. Which policy addresses the exposure, and on what basis is it commonly written?

• A. A builders risk policy, commonly written for the completed value of the structure so coverage grows with the project without midterm limit changes.
• B. A difference in conditions policy, because construction is a specialty operation.
• C. A surety performance bond, which pays if the building burns before completion.
• D. An HO-8, because the unfinished home has a low market value.

191. After two admitted carriers nonrenew his coastal Melbourne home and every other authorized insurer he approaches declines the risk, Gustavo Prieto is told he may be eligible for a policy from Citizens Property Insurance Corporation. What is the essential role Citizens plays in the Florida market?

• A. It is a state-created insurer that serves as a residual market, writing property coverage for Floridians who cannot obtain it from private carriers.
• B. It is a guaranty association that pays claims of insolvent insurers.
• C. It is a federal agency that subsidizes windstorm premiums nationwide.
• D. It is a rating organization that files loss costs for Florida property insurers.

192. A hurricane's winds tear shingles and soffits from a Vero Beach home insured with Coverage A of $400,000 and a 2 percent hurricane deductible. Repairs total $50,000. Ignoring any other policy provisions, how much should the insurer pay for this hurricane loss?

• A. $42,000, after subtracting a deductible of $8,000, which is 2 percent of the $400,000 Coverage A limit.
• B. $49,500, after subtracting a flat $500 deductible.
• C. $42,500, after subtracting 2 percent of the $50,000 loss amount.
• D. $50,000, because hurricane losses are not subject to any deductible.

193. Reviewing renewal paperwork for her Palm Bay home, Adaeze Okonkwo notices she must select a hurricane deductible. Her agent explains the choices Florida homeowners are customarily offered. Which set of hurricane deductible options is correct?

• A. A single mandatory deductible of 15 percent of the dwelling limit.
• B. $1,000, or 25 percent or 50 percent of the amount of each loss.
• C. $500, or 2 percent, 5 percent, or 10 percent of the dwelling limit.
• D. $100, or 1 percent, 3 percent, or 7 percent of the dwelling limit.

194. Fire damages roughly 40 percent of a 1970s masonry strip center in Hialeah. The city then orders the owner to demolish the still-standing portion and rebuild the entire structure to current wind and electrical codes, adding major costs a basic commercial property form will not pay. Which coverage is designed to fund the demolition and the code-mandated upgrades?

• A. Debris removal coverage, which pays all demolition and reconstruction expenses.
• B. Ordinance or law coverage, which can pay for loss to the undamaged portion, demolition costs, and the increased cost of construction required by current codes.
• C. Inflation guard coverage, because construction prices have risen since the building was insured.
• D. Business income coverage, because the code upgrades extend the repair timeline.

195. An insurer agrees to write a homeowners policy on a beachfront Panama City home only by excluding windstorm entirely. The homeowner then buys a separate windstorm policy to fill the gap. Following a season with both a kitchen fire and hurricane roof damage, how do the two policies interact?

• A. The homeowners policy still responds to non-wind perils such as the kitchen fire, while the separate windstorm policy responds to the hurricane roof damage.
• B. Both policies split every loss equally regardless of cause.
• C. The windstorm policy replaces the homeowners policy entirely once it is issued.
• D. Neither policy responds to the roof damage because wind losses require a single combined policy.

196. After a fire in the clubhouse, a Naples condominium association levies a $9,000 special assessment against every unit owner because the master policy deductible and limits left a shortfall. Which coverage in a unit owner's HO-6 program is designed to respond to this charge?

• A. Fair rental value coverage, because the clubhouse produced rental income.
• B. Medical payments coverage, because the assessment arises from an injury exposure.
• C. Debris removal coverage, because part of the assessment funds cleanup.
• D. Loss assessment coverage, which pays the unit owner's share of certain assessments the association levies after a loss covered by the types of perils the policy insures.

197. A Tallahassee bookstore's business income claim is in dispute. The insurer argues payments stop on the date the store reasonably should have reopened given diligent repair efforts, while the owner wants payments to continue until the day she actually chose to reopen, months later. What policy concept resolves this disagreement?

• A. The coinsurance clause, which prorates the payment over the months of closure.
• B. The policy pays until the expiration date of the policy period, whichever comes first.
• C. The vacancy provision, which cuts off payment after sixty days of closure.
• D. The period of restoration, which ends when the property should be repaired or replaced with reasonable speed and similar quality, not when the insured actually resumes business.

198. Ingrid Solberg owns a furnished rental cottage in Dunedin insured on a DP-2 and also carries an HO-3 on her own residence. Burglars steal furniture from the cottage and, the same month, tools from her own garage. Why do the two theft losses come out differently?

• A. The homeowners form includes theft as a covered peril, but dwelling forms do not cover theft unless the coverage is added by endorsement, so the cottage furniture loss is not covered as written.
• B. The cottage loss is covered at double the limit because the property was tenant occupied.
• C. Neither loss is covered because theft always requires a crime policy.
• D. Both losses are covered because theft is a universal peril in all property forms.

199. A Gainesville homeowner finishes his walk-out lower level with carpet, a home theater, and custom built-ins, then buys a National Flood Insurance Program policy. His agent cautions that this space will not be treated like the rest of the house in a flood claim. What is the concern?

• A. Flood policies exclude the entire structure whenever any level lies below grade.
• B. Below-grade areas are covered in full but only for saltwater intrusion.
• C. In below-grade areas the program sharply limits coverage, generally paying only for specified items such as essential building equipment and machinery rather than finished surfaces and most contents kept there.
• D. The finished lower level is covered only if it has its own separate policy.

200. Solberg Custom Homes carries builders risk coverage on a residence under construction in Estero. The certificate of occupancy is issued in March, the buyers close and move in during April, and a kitchen fire strikes in June. The builder assumes the builders risk policy still applies. What should the agent explain about when builders risk protection comes to an end?

• A. It converts automatically into a homeowners policy for the buyers at closing.
• B. It ends only when the builder formally cancels it in writing, regardless of occupancy.
• C. It continues for one year after completion as a statutory warranty period.
• D. It typically ends when the project is completed and accepted or occupied by the purchaser, so a permanent property policy needed to be in place well before the June fire.

201. Ruben Castile runs a paid automotive repair operation out of the detached garage behind his Largo home. Lightning sparks a fire that levels the garage. His HO-3 lists Coverage B for other structures. Why might the insurer deny the garage claim?

• A. Lightning is not a covered peril for detached structures under any homeowners form.
• B. Detached garages are never insurable and must be listed on a commercial policy from the start.
• C. Coverage B excludes other structures from which a business is conducted, and the paid repair operation places the garage within that exclusion.
• D. Coverage B applies only to structures physically attached to the dwelling.

202. A tilt-wall warehouse in Ocala has an insurable value of $500,000, and its commercial property policy carries an 80 percent coinsurance clause, a $300,000 limit, and a $2,500 deductible. A fire causes $80,000 in damage. Applying the coinsurance formula and then the deductible, what does the insurer pay?

• A. $57,500
• B. $60,000
• C. $80,000
• D. $77,500

203. An office building in Boca Raton is valued at $600,000 and insured for $450,000 under a policy with a 90 percent coinsurance clause and a $1,000 deductible. A pipe failure causes $120,000 in covered damage. What amount does the insurer owe after applying both the coinsurance formula and the deductible?

• A. $99,000
• B. $100,000
• C. $90,000
• D. $119,000

204. A Gainesville strip-mall unit has an insurable value of $400,000 and is insured for $320,000 under a form with an 80 percent coinsurance clause and a $1,000 deductible. Smoke and fire cause $50,000 in covered damage. How much will the insurer pay?

• A. $50,000, because coinsurance clauses never affect small losses.
• B. $49,000, because the insured met the coinsurance requirement and only the deductible is subtracted.
• C. $40,000, because the recovery is scaled to 80 percent of the loss.
• D. $39,000, after both a penalty and the deductible.

205. A storage shed behind a Sarasota rental property is destroyed by fire. Rebuilding it new would cost $60,000, but the structure had depreciated 25 percent through age and wear. If the policy settles this item at actual cash value, what does the insured receive before any deductible?

• A. $45,000, which is replacement cost minus 25 percent depreciation.
• B. $75,000, replacement cost plus an allowance for demolition.
• C. $60,000, because actual cash value equals the cost of new construction.
• D. $15,000, which is the depreciation amount itself.

206. After hail ruins the roof of her Ocala home, Camille Duval's insurer acknowledges the policy provides replacement cost settlement but issues a first check that is noticeably smaller than the contractor's bid, promising the balance later. What replacement cost mechanic explains the two-step payment?

• A. The insurer is applying a coinsurance penalty that will be refunded automatically at renewal.
• B. Replacement cost policies always pay in two equal installments six months apart.
• C. The insurer initially pays the actual cash value and releases the recoverable depreciation only after the repairs or replacement are actually completed.
• D. The first check is a loan that accrues interest until the insured repays it.

207. A Winter Park art gallery cannot risk a coinsurance penalty on its fluctuating collection of consigned works, so its agent negotiates an agreed value option on the commercial property policy after submitting a signed statement of values. What is the principal effect of activating agreed value?

• A. It doubles the policy limit at no additional premium.
• B. It converts the policy to actual cash value settlement.
• C. It guarantees payment of the full limit for any loss, even a partial one.
• D. It suspends the coinsurance clause, so a covered loss is paid up to the agreed amount without any underinsurance penalty.

208. Through an acquisition, a Fort Myers wholesaler ends up with two property policies on the same warehouse contents: one with a $100,000 limit and another with a $300,000 limit, both containing pro rata other-insurance clauses. A covered loss of $60,000 occurs. How is the loss divided?

• A. Each policy pays $30,000, splitting the loss equally.
• B. The smaller policy pays $15,000 and the larger pays $45,000, in proportion to their limits.
• C. The larger policy pays the whole $60,000 because it was issued first.
• D. Each policy pays $60,000, giving the insured $120,000.

209. A touring musician insures her cello on an instrument floater whose other-insurance clause states it is excess over any other collectible coverage. Her homeowners policy also technically reaches the cello. After the instrument is crushed in transit, in what order do the two policies respond?

• A. The two policies split the loss in equal shares because both cover the cello.
• B. The excess clause is void, so the floater always pays first as specific insurance.
• C. Neither policy pays until a court assigns percentages of fault.
• D. The homeowners policy responds first as primary coverage, and the floater pays only the covered amount remaining after the primary limit is exhausted.

210. An insurer and a Cape Coral homeowner agree that hurricane damage to her home is covered but sit $70,000 apart on what the repairs are worth. The policy's appraisal condition is invoked. How does that process work?

• A. The dispute goes directly to a jury trial on both coverage and amount.
• B. The insurer's own staff adjuster issues a binding valuation the insured cannot contest.
• C. Each side selects a competent appraiser, the two appraisers choose an umpire, and agreement of any two of the three sets the amount of the loss.
• D. The state regulator assigns a public adjuster whose figure is final for both parties.

211. A Lakeland warehouse has sat empty with no business operations and no contents for five straight months when vandals break in and wreck the interior. The building's commercial property policy contains the standard vacancy provision. How will the claim likely be handled?

• A. The claim is paid at double the limit as a penalty against the insurer for slow inspection.
• B. The claim is denied because vandalism is among the perils the policy stops covering once the building has been vacant beyond the period stated in the form.
• C. The claim is paid in full because vandalism is a covered cause of loss.
• D. The claim is paid only if the vandals are convicted.

212. A homeowner in Deltona deliberately sets fire to his own insured house, and the insurer denies his claim for arson. Seaboard Savings Bank holds the mortgage and is listed in the policy's mortgage clause. What is the bank's position?

• A. The bank must sue the arsonist directly and has no rights under the policy.
• B. The bank may still recover its insurable interest, because the standard mortgage clause protects the lender against denial based on the insured's own wrongful acts.
• C. The bank collects nothing because the named insured's arson voids the entire contract.
• D. The bank collects only if it forecloses before the insurer closes the claim.

213. A commercial lease for a Tampa distribution building requires landlord and tenant to waive all recovery rights against each other for property damage, each relying on its own insurance. Fire caused by the tenant's negligence later damages the building. The landlord's insurer pays and then looks to sue the tenant. What is the effect of the pre-loss waiver?

• A. The waiver voids the landlord's coverage because it impaired the insurer's rights after the loss.
• B. The insurer may still sue the tenant because subrogation can never be waived.
• C. The tenant must reimburse the insurer but may then bill the landlord for the same amount.
• D. Because the landlord waived recovery rights in writing before the loss, the insurer has no subrogation claim to pursue against the tenant, and the coverage remains intact.

214. During a severe storm in Melbourne, wind tears a section of roof decking away, and rain pouring through the opening over the next several hours destroys ceilings, drywall, and flooring below. The insurer's policy covers wind but limits interior rain damage. Why is the interior damage nevertheless payable here?

• A. Wind was the proximate cause: it started an unbroken chain of events, and the rain damage that followed through the storm-created opening is treated as part of the covered wind loss.
• B. Interior water damage is covered only under flood policies, so the claim fails.
• C. Rain is always covered whenever any storm is in the area.
• D. The insured's duty to mitigate converts any storm loss into a covered loss.

215. Applying for commercial property coverage on his Pensacola warehouse, an owner answers no when asked whether flammable or explosive materials are stored on site, though he knowingly rents a bay to a fireworks distributor. Fire later destroys the building, and the insurer discovers the storage arrangement. What remedy does the insurer have?

• A. The insurer must pay this claim but may refuse the next one.
• B. Because the applicant concealed a fact material to acceptance of the risk, the insurer may void the coverage and deny the claim.
• C. None; once a policy is issued the insurer must pay every claim regardless of the application.
• D. The insurer may only surcharge the renewal premium going forward.

216. After a kitchen fire chars part of her Kissimmee home, a frustrated homeowner tells the adjuster she is done with the property, hands over the keys, and demands the full Coverage A limit, saying the insurer now owns the house. Which policy principle controls this demand?

• A. The insured's demand is valid because handing over keys transfers title under the loss settlement clause.
• B. Abandonment is allowed if the insured records it with the county clerk.
• C. The insurer must accept the property but may deduct storage fees.
• D. Property policies provide that the insurer need not accept abandoned property, so the insured cannot force a total-loss settlement by walking away from a partial loss.

217. On a homeowners application, an Ormond Beach applicant estimated her home was built in 1996 when county records later show 1994, an error she had no reason to know about. After a burglary loss, the insurer cites the discrepancy and tries to rescind. Why will this attempt likely fail?

• A. Burglary claims can never be denied for application errors of any kind.
• B. Applications are legally irrelevant once any premium is paid.
• C. Rescission is available only in commercial lines, never in personal lines.
• D. A representation only supports rescission when it is material to the risk; an innocent two-year error about construction date would not have changed the underwriting decision.

218. Sunrise Community Bank holds the mortgage on an insured Palm Coast home and is named in the policy's mortgage clause. The homeowner stops paying premiums and ignores the insurer's notices. Which pair of rights does the mortgage clause give the bank in this situation?

• A. The right to receive its own advance notice before the policy is cancelled and the right to pay the overdue premium to keep the coverage alive.
• B. The right to occupy the home and the right to collect rent from the borrower.
• C. The right to rewrite the policy limits and the right to change the named insured.
• D. The right to cancel the borrower's coverage and the right to keep any refund.

219. Hail destroys the 12-year-old shingle roof on a Port Charlotte rental duplex. A new roof costs $24,000, and the adjuster documents 40 percent depreciation. The owner is weighing a replacement cost settlement against an actual cash value settlement. How much more would the replacement cost basis put in her pocket, before any deductible?

• A. $9,600 more, the depreciation that actual cash value would have withheld.
• B. $24,000 more, because replacement cost is paid on top of actual cash value.
• C. Nothing more; the two settlement methods always produce the same figure on roofs.
• D. $14,400 more, because that is the depreciated roof value.

220. A Sarasota hotel activated the agreed value option two years ago by filing a signed statement of values. At this year's renewal the owner never submits an updated statement, and the option lapses. What is the consequence for the hotel's next partial loss?

• A. Coverage terminates entirely until a new statement of values is filed.
• B. The policy converts to actual cash value settlement automatically.
• C. Nothing changes, because agreed value is permanent once elected.
• D. The coinsurance clause comes back into effect, so an underinsured partial loss can again be penalized.

221. Camille Duval of Brandon lends her insured sedan to a neighbor for a grocery run. The neighbor runs a red light and injures a cyclist, who sues the neighbor. Camille's personal auto policy is the only insurance in the picture. Does her Part A liability coverage protect the neighbor?

• A. Yes, because a person using the covered auto with the owner's permission qualifies as an insured under Part A.
• B. No; Part A protects only the named insured and resident relatives.
• C. Yes, but only if the neighbor has no assets of his own.
• D. No, unless the neighbor is added to the policy before the trip.

222. To earn extra money, a St. Petersburg driver signs up with a ride-hailing app and is transporting a paying passenger when he rear-ends another vehicle. He expects his unendorsed personal auto policy to defend him. Why is that expectation misplaced?

• A. Personal auto policies cover business use of any kind without restriction, so coverage actually applies.
• B. Rear-end collisions are excluded from all liability coverage.
• C. The personal auto policy excludes liability arising while the vehicle is being used to carry persons for a fee, an exposure that requires ride-share or commercial coverage.
• D. Coverage fails only because the passenger had not yet paid the fare.

223. While jogging through her Dunedin neighborhood, Renata Vasquez is clipped by a turning car and suffers a broken wrist. She carries a personal auto policy with medical payments coverage on her own parked sedan at home. Can her own Part B respond to this injury?

• A. Yes, but only if the striking driver is convicted of a traffic offense.
• B. No, because pedestrians must claim against the striking driver before any other source.
• C. Yes; medical payments coverage protects the named insured as a pedestrian when struck by a motor vehicle, without regard to fault.
• D. No, because Part B applies only to injuries sustained inside the covered auto.

224. A driver who carries no liability insurance of any kind crosses the center line near Ocala and seriously injures Terrence Moreau, whose own policy includes uninsured motorist coverage. What does Terrence's uninsured motorist coverage actually pay?

• A. The repair bill for both vehicles regardless of who caused the crash.
• B. The bodily injury damages Terrence is legally entitled to collect from the at-fault uninsured driver, up to the coverage limit.
• C. Only funeral expenses, because injury claims must go through liability coverage.
• D. A fixed statutory schedule of benefits unrelated to the accident facts.

225. Driving home from Gainesville at dusk, Wendell Okafor cannot avoid a deer that bounds onto the highway, and the impact caves in his hood and grille. His personal auto policy carries both collision and other-than-collision coverage with different deductibles. How is this animal-strike loss categorized?

• A. As an uncovered act of nature under both coverages.
• B. As an other-than-collision loss, because contact with a bird or animal is specifically placed in that coverage.
• C. As a liability loss payable by the state wildlife agency.
• D. As a collision loss, because the car physically struck something.

226. A distracted driver slams into Priya Raman's parked SUV outside her Tampa office, and the at-fault driver's insurer disputes everything. Priya files under her own collision coverage instead. The SUV's actual cash value damage is $18,000 and her collision deductible is $500. What does her insurer pay her?

• A. $18,500, the damage plus reimbursement of the deductible.
• B. $17,500, the covered damage minus her $500 deductible.
• C. Nothing until the other insurer accepts liability.
• D. $18,000, because the accident was not her fault.

227. A phantom vehicle sideswipes Omar Bashir on a Naples causeway at night and speeds away unidentified. Omar wants to pursue an uninsured motorist claim for his injuries under his personal auto policy. Under the policy's duties section, which step is specifically required because a hit-and-run driver is involved?

• A. He must locate the fleeing driver himself before any claim can be opened.
• B. He must obtain a notarized statement from every passerby.
• C. He must promptly notify the police that a hit-and-run driver was involved.
• D. He must sue his own insurer within twenty-four hours.

228. The Castile family of Jacksonville takes two road trips in the same summer: one to Toronto, where a fender bender occurs in a hotel garage, and one to Cancun, where their rental arrangement collapses and they drive their own SUV into Mexico, suffering a collision there. How does their personal auto policy's coverage territory treat the two accidents?

• A. Both accidents are covered because the policy follows the vehicle worldwide.
• B. Neither accident is covered because coverage stops at the United States border.
• C. The Toronto accident is covered because Canada lies within the policy territory, while the Mexico accident is not, since Mexico falls outside it.
• D. Only the Mexico accident is covered because a treaty requires it.

229. Nadia Ferreira is hurt in a Tampa intersection crash and treats within a week. Her documented losses are $9,500 in medical bills and $3,000 in lost wages, and her Florida personal injury protection coverage applies. Using the standard reimbursement percentages, how much does PIP pay in total?

• A. $12,500, the full amount of both losses.
• B. $7,600, medical reimbursement only, because wages are never covered.
• C. $9,400, which is 80 percent of the medical bills plus 60 percent of the lost wages.
• D. $10,000, because every claim pays the full PIP limit.

230. After a serious crash on Interstate 4, a Lakeland delivery clerk begins emergency treatment immediately and documents $12,000 in medical bills plus $4,000 in lost income. His Florida personal injury protection applies with its standard percentages and limit. What total benefit does PIP provide?

• A. $12,000, the calculated benefit without any cap.
• B. $16,000, both losses in full.
• C. $9,600, the medical portion only.
• D. $10,000, because the combined 80 percent and 60 percent calculation reaches $12,000, which the PIP limit caps at $10,000.

231. Shaken but feeling only stiff after a minor collision in Brandon, a rideshare passenger decides to wait and see. Three weeks later, worsening back pain finally sends her to a clinic, and she submits the bills to the applicable Florida personal injury protection coverage. What obstacle does her claim face?

• A. She must first win a negligence lawsuit before PIP can pay.
• B. Back injuries are categorically excluded from no-fault benefits.
• C. Florida PIP requires initial treatment within 14 days of the accident, and she sought care too late to qualify for benefits.
• D. PIP never covers passengers, only drivers.

232. A pedestrian covered under her household's Florida personal injury protection dies from injuries after being struck in a Hialeah crosswalk. Her family asks the agent what the no-fault coverage itself provides on account of the death. What should the agent explain?

• A. PIP pays a $100,000 life insurance benefit to the estate.
• B. PIP doubles the medical limit when an accident proves fatal.
• C. PIP provides nothing upon death; only liability insurance ever responds.
• D. PIP includes a $5,000 death benefit, payable in addition to the medical and disability benefits the coverage paid before death.

233. Devon Ashworth is registering his newly purchased pickup truck in Duval County, his first vehicle registration in Florida. To keep the registration valid under the state's motor vehicle no-fault and financial responsibility framework, which coverages must he maintain?

• A. Personal injury protection of $10,000 and property damage liability of $10,000.
• B. Bodily injury liability of at least $100,000 and nothing else.
• C. Uninsured motorist coverage equal to the value of the vehicle.
• D. Collision and comprehensive coverage with a $500 maximum deductible.

234. Following a serious at-fault accident, a Pasco County motorist must furnish proof of financial responsibility for bodily injury and property damage liability going forward. Instead of buying split limits, he asks whether one single number can satisfy the obligation. What alternative does Florida's financial responsibility framework permit?

• A. A combined single limit of $5,000 for all liability.
• B. A surety bond covering property damage only, with bodily injury left uninsured.
• C. A signed promise to pay future judgments from wages.
• D. A combined single limit of $30,000 covering both bodily injury and property damage liability.

235. A self-employed landscaper in Vero Beach is injured in a covered accident but, remarkably, incurs no medical bills because a relative who is a physician treats him without charge. He does lose $5,000 of documented business income while recovering, and his Florida personal injury protection applies. What does PIP pay for the income loss?

• A. $5,000, since no medical benefits were used.
• B. $3,000, which is 60 percent of the lost income.
• C. Nothing, because income benefits require a hospital stay.
• D. $4,000, which is 80 percent of the lost income.

236. Colton Reyes carries auto liability split limits of $50,000 per person and $100,000 per accident for bodily injury, plus $25,000 for property damage. He causes a pileup near Fort Lauderdale injuring three people, with damages of $30,000, $60,000, and $20,000, and $30,000 of damage to another vehicle. What total does his insurer pay for this accident?

• A. $125,000, after capping the $60,000 claimant at the $50,000 per-person limit and the vehicle damage at the $25,000 property limit.
• B. $135,000, capping only the property damage claim.
• C. $140,000, every dollar of damages claimed.
• D. $100,000, the per-accident bodily injury limit with nothing for property damage.

237. A Sarasota pool-service company adds vehicles constantly as it grows. Its agent recommends writing the business auto policy with the broadest covered-auto designation available so that liability coverage keeps pace with the fleet. What does that broadest designation accomplish?

• A. It limits coverage to the vehicles specifically scheduled on the declarations at inception.
• B. It covers only vehicles hired or borrowed from others.
• C. It covers only the personal vehicles of the company's employees.
• D. It covers any auto, automatically including vehicles the business acquires after the policy is issued, without individually listing them.

238. A Boca Raton marketing agency owns no vehicles at all, but its account managers regularly drive their personal cars to client meetings, and the firm occasionally rents vans for events. The owner assumes the employees' personal auto policies fully protect the agency. What exposure is she overlooking, and what coverage addresses it?

• A. The agency itself can be held liable for accidents in employee-owned or rented vehicles, an exposure addressed by hired and non-owned auto liability coverage.
• B. The only gap is physical damage to employee cars, which workers compensation covers.
• C. The agency needs a garage policy because vehicles are used in its business.
• D. There is no exposure; a business without titled vehicles cannot be sued for auto accidents.

239. A customer browsing a Fort Myers tile showroom slips on a wet patch and fractures her hip, then sues the store. The store's commercial general liability policy is in force. Which insuring agreement responds, and what is its basic trigger?

• A. Coverage A, which pays sums the insured becomes legally obligated to pay as damages for bodily injury caused by an occurrence during the policy period.
• B. Coverage B, because a lawsuit is a form of personal injury.
• C. Coverage C, because medical bills are involved.
• D. No coverage applies, because slip-and-fall claims require a separate premises policy.

240. A Tallahassee landscaping company runs a radio spot claiming a rival firm uses banned chemicals and falsifies its licensing, and the rival sues for defamation. The landscaper tenders the suit to its commercial general liability insurer. Which part of the policy potentially applies?

• A. Coverage A, because the rival suffered an occurrence of property damage.
• B. The pollution exclusion, which bars any claim mentioning chemicals.
• C. Coverage B, personal and advertising injury liability, which addresses offenses such as libel, slander, and disparagement of another's goods or services.
• D. Coverage C, which pays medical expenses for reputational harm.

241. A visitor bumps her head on a low display shelf at a Winter Haven garden center, suffering a small cut. She is not threatening to sue, and the store simply wants her urgent-care bill handled quickly. Which commercial general liability coverage is designed for this, and what makes it distinctive?

• A. Coverage A, but only after the visitor files suit and proves negligence.
• B. Coverage C medical payments, which pays reasonable medical expenses for injuries on or next to the premises without any determination of fault.
• C. Coverage B, because the injury involved the store's advertising displays.
• D. The umbrella policy, because small claims fall below the general liability program.

242. In 2024, defective bleachers installed by a Daytona Beach contractor collapse and injure a spectator, but the injured man does not file suit until 2027. The contractor had an occurrence-form general liability policy in 2024 and a different insurer's occurrence form in 2027. Which policy owes the defense and indemnity?

• A. The 2027 policy, because coverage follows the date the claim is filed.
• B. The 2024 policy, because an occurrence form is triggered by injury during its policy period no matter when the claim is later made.
• C. Both policies share equally regardless of when the injury happened.
• D. Neither policy, because more than two years passed between injury and suit.

243. An architecture firm in Coral Springs has carried claims-made professional liability continuously since 2021, and every renewal shows a retroactive date of March 1, 2021. In 2026, a client sues over design work the firm performed in 2019. Why does the current claims-made policy refuse this claim?

• A. Architects can never be sued more than five years after a project.
• B. A claims-made form covers claims first made during the policy period only for wrongful acts on or after the retroactive date, and the 2019 work predates March 1, 2021.
• C. The claim fails only because the client waited until 2026 to sue.
• D. Claims-made policies cover only claims filed within thirty days of the wrongful act.

244. A Port Orange plumbing contractor finishes installing a water heater in a customer's home and departs. Four months later a fitting the plumber soldered fails, flooding the finished basement. The customer sues for the water damage. Under the contractor's commercial general liability policy, which hazard does this claim fall within?

• A. No hazard; damage after a job ends is always the customer's problem.
• B. The premises hazard, because the water heater sits on real property.
• C. The products-completed operations hazard, which covers injury or damage occurring away from the insured's premises after the work has been completed.
• D. Workers compensation, because a tradesman performed the installation.

245. A roofer employed by a Fort Walton Beach contractor falls from a ladder on the job and needs surgery, months of rehabilitation, and time away from work. Nobody was negligent; the ladder simply shifted. Under the workers compensation policy's first part, what does the injured roofer receive?

• A. A jury-determined damage award including pain and suffering.
• B. Nothing, because no one was negligent.
• C. Only reimbursement of health insurance copays.
• D. The benefits prescribed by the state workers compensation law, such as medical care and wage replacement, paid without regard to fault.

246. A machine operator at an Apopka fabrication plant loses a hand in a press accident and collects his statutory compensation benefits. His spouse then files her own lawsuit against the employer for loss of consortium, a claim the compensation statute does not bar. Which insurance responds to the spouse's suit?

• A. No insurance; suits by family members are uninsurable.
• B. Part Two, employers liability, which defends and indemnifies the employer against employment-related suits that fall outside the exclusive statutory remedy.
• C. Part One of the workers compensation policy, since her claim relates to a work injury.
• D. The commercial general liability policy, because the injury occurred on business premises.

247. Beatriz Camara of Weston carries a personal auto policy with liability limits of $300,000 per accident and a personal umbrella policy with a $1,000,000 limit written over it. She causes a catastrophic crash, and a court enters an $850,000 judgment against her. How is the judgment paid?

• A. The umbrella pays the full $850,000 because its limit is larger.
• B. Each policy pays $425,000, splitting the judgment evenly.
• C. Beatriz personally pays $550,000 because umbrellas cover only property claims.
• D. The auto policy pays its $300,000 limit and the umbrella pays the remaining $550,000.

248. By October, a string of large liability settlements has completely used up the general aggregate limit on a Miami wholesaler's primary general liability policy. In November a new customer-injury claim arrives. The wholesaler also carries a commercial umbrella. How does the umbrella respond to the November claim?

• A. It refuses the claim because umbrellas never pay until the following renewal.
• B. It cancels automatically once the underlying aggregate is exhausted.
• C. It drops down and responds in place of the exhausted primary policy, subject to the umbrella's own terms and any retained amount.
• D. It pays only the primary insurer's defense costs.

249. A Boca Raton accounting firm misapplies a tax election, costing a client $200,000 with no property damaged and no one physically hurt. The firm's commercial general liability insurer denies the claim. What coverage should the firm have carried, and why did the general liability form fail?

• A. A fidelity bond; the accountant's mistake was a form of employee theft.
• B. Professional liability coverage; the general liability form responds to bodily injury and property damage, not to pure financial loss caused by professional errors.
• C. No coverage exists anywhere for professional mistakes.
• D. Products coverage; tax advice is a product of the firm.

250. Okaloosa County requires a road contractor to post a performance bond before starting a drainage project, and a Panhandle surety issues it. The contractor abandons the job halfway through, and the surety pays the county to finish the work. Compare this arrangement with an ordinary insurance policy: what makes suretyship different?

• A. The bond involves three parties, guarantees the principal's performance to the obligee, and the surety that pays may recover its loss from the defaulting principal.
• B. The surety absorbs the loss permanently, exactly like an insurer paying a fire claim.
• C. Nothing; a bond is simply a two-party insurance policy with a different name.
• D. The county must reimburse the surety because it demanded the bond.

251. A Hialeah beverage distributor carries a commercial general liability policy with a $1,000,000 each-occurrence limit and a $2,000,000 general aggregate. During one policy year it suffers three separate covered losses of $800,000, $700,000, and $900,000, in that order. How much does the insurer pay on the third loss?

• A. $1,000,000, the full occurrence limit.
• B. $500,000, the amount remaining in the general aggregate after the first two losses.
• C. Nothing, because three claims in one year void the policy.
• D. $900,000, because it is within the each-occurrence limit.

252. A Deltona janitorial contractor's liability policy carries a $500,000 each-occurrence limit and a $1,000,000 aggregate. In one policy year it incurs covered losses of $400,000, then $450,000, then $300,000. Trace the aggregate and state the payment on the final loss.

• A. $300,000, the full amount of the final loss.
• B. $250,000, half of the each-occurrence limit.
• C. $500,000, the each-occurrence limit.
• D. $150,000, because the first two losses left only that much of the aggregate.

253. A charter van insured under a business liability policy with a $1,000,000 per-occurrence limit crashes near St. Augustine, injuring nine passengers who file nine separate lawsuits. The owner assumes each lawsuit has its own million of protection. How does the per-occurrence limit actually operate?

• A. The limit is divided equally, guaranteeing each claimant one ninth.
• B. The limit applies per attorney involved in the litigation.
• C. The single crash is one occurrence, so all nine claims together share the one $1,000,000 limit.
• D. Each claimant triggers a fresh limit, giving nine million in total.

254. A Sebring equipment dealer is sued for $950,000 after a loader accident, and its general liability insurer spends $280,000 on attorneys and experts before winning a defense verdict. The dealer worries the legal spending has drained its $1,000,000 occurrence limit for the rest of the year. Under the standard commercial general liability structure, is that worry justified?

• A. Yes, but only half of defense spending counts against the limit.
• B. No, because insurers absorb defense costs only when they lose the case.
• C. Yes; every dollar of defense reduces the occurrence limit dollar for dollar.
• D. No; defense costs are paid in addition to the limits, so the $280,000 in legal spending did not reduce the limit of insurance.

255. A Naples surgeon carries a medical professional liability policy with a $1,000,000 per-claim limit written with defense costs inside the limit. A malpractice suit consumes $300,000 in defense expenses before settlement talks begin. How much remains available to settle the claim itself?

• A. $1,300,000, the limit plus the defense costs.
• B. $300,000, because defense spending becomes the new limit.
• C. $1,000,000, because defense spending never touches limits.
• D. $700,000, because the $300,000 of defense costs eroded the single limit that pays both defense and damages.

256. Midway through a policy year, a Largo distributor's liability insurer pays out settlements that completely exhaust the applicable limit of insurance. Two related lawsuits against the distributor are still in active litigation. What happens to the insurer's duty to defend those pending suits?

• A. The duty to defend continues until every lawsuit reaches a verdict.
• B. The insurer must defend for one additional year as a courtesy period.
• C. The duty to defend ends once the applicable limit is exhausted by payment of judgments or settlements.
• D. The defense obligation transfers to the state guaranty fund.

257. During a liability trial in Orlando, the defending insurer posts an appeal bond, pays court costs taxed against its insured, and covers interest accruing on the judgment during the appeal. The insured asks whether these amounts are being carved out of her policy limit. How does the policy classify them?

• A. They reduce the limit just like a settlement payment would.
• B. They are supplementary payments, made in addition to the limit of insurance rather than subtracted from it.
• C. They are deductible expenses billed back to the insured.
• D. They are punitive amounts that liability policies always exclude.

258. The insurer defending a Palm Coast electrician's liability case asks him to leave work and attend three days of trial as a witness. He protests that testifying costs him paying jobs. What accommodation do the supplementary payments of a liability policy make for this situation?

• A. The insurer must hire a substitute electrician for his jobs.
• B. None; time spent assisting the defense is entirely the insured's burden.
• C. The insurer reimburses his actual loss of earnings for attending hearings and trials at its request, up to the daily amount the policy states.
• D. He may bill the plaintiff directly for his lost time.

259. A commercial lease for a Miami Gardens warehouse obligates the tenant to hold the landlord harmless for tort liability arising from the tenant's use of the premises. When a visitor is injured and sues the landlord, the tenant's general liability insurer initially points to the contractual liability exclusion. Why does coverage nevertheless apply?

• A. The contractual liability exclusion carves back coverage for liability assumed in an insured contract, and a lease of premises is within that definition.
• B. Exclusions never apply to claims involving landlords.
• C. Hold-harmless agreements are illegal, so the exclusion has nothing to operate on.
• D. The landlord automatically became a named insured by signing the lease.

260. A delivery driver for a Clearwater catering company is injured when a company van driven by a co-owner backs into him in the loading area, and he sues that co-owner. Both individuals qualify as insureds under the company's liability policy, and the insurer hesitates because an insured is suing an insured. Which policy provision resolves how coverage applies?

• A. The other-insurance clause, which sends the claim to a second carrier.
• B. The severability of interests provision, under which the insurance applies separately to each insured, so one insured's claim against another is analyzed as if the defending insured held his own policy.
• C. The subrogation clause, which cancels claims between insureds.
• D. The liberalization clause, which broadens coverage whenever a dispute arises.

261. Moments after his delivery truck bumps a parked car in Ocala, a driver for a Marion County bakery apologizes, hands the car's owner $800 in cash for the scratch, and promises the bakery will cover any further repairs. When a larger claim later surfaces, the bakery's liability insurer objects. Which duty did the driver's roadside generosity violate?

• A. The duty to carry cash for exactly these situations.
• B. The duty to obtain a police report before speaking to anyone.
• C. The duty not to make voluntary payments or assume obligations without the insurer's consent, which can leave those amounts at the insured's own expense.
• D. No duty; on-scene settlements are encouraged by liability policies.

262. A summons and complaint arrive at a Punta Gorda cabinet shop over a customer injury, but the owner tosses the envelope in a drawer, assuming it is junk mail, and a default judgment is entered before her liability insurer ever hears of the suit. Which policy duty did she breach, and why does it matter so much?

• A. The duty to post her own appeal bond within ten days.
• B. No duty was breached; insurers monitor all court dockets electronically.
• C. The duty to countersue immediately; failing to file a counterclaim forfeits coverage.
• D. The duty to immediately forward suit papers and cooperate; her silence deprived the insurer of the chance to defend, and the resulting prejudice can defeat coverage.

263. In the same week, two Brevard County business owners receive different letters from their liability insurers. One is told her policy will terminate on a stated date next month, in the middle of its term. The other is told his policy will simply not be continued when its term expires. What distinguishes these two insurer actions?

• A. They are identical actions with two different names.
• B. The first is a rescission, treating the policy as never having existed.
• C. The second is illegal, because insurers must renew every policy indefinitely.
• D. The first is a cancellation, ending coverage during the policy term; the second is a nonrenewal, declining to offer a new term when the current one ends.

264. Two policyholders of the same Panhandle insurer end their annual liability policies early. The first asked to cancel her own policy to switch carriers; the second was cancelled by the insurer for underwriting reasons. Both expect refunds of unearned premium. Why may their refund calculations differ?

• A. Refunds are always identical regardless of who cancels.
• B. Neither receives any refund because premium is fully earned at inception.
• C. The insurer keeps all unearned premium whenever it cancels for underwriting reasons.
• D. When the insured initiates cancellation, the refund is commonly computed short rate, keeping a service charge, while insurer-initiated cancellation returns unearned premium on a full pro rata basis.

265. Four business partners are all named insureds on the liability policy covering their Jupiter marina, with one partner listed first on the declarations. When the insurer decides to cancel for a change in operations, and later when a midterm coverage change is requested, who holds the special status under the policy's common conditions?

• A. The partner with the largest ownership percentage under corporate law.
• B. Each partner equally; the policy recognizes no ordering among insureds.
• C. The first named insured, who is authorized to request changes, receives the cancellation notice, and is responsible for premium payment on behalf of all insureds.
• D. Whichever partner happens to be at the marina when notice arrives.

266. A Pinellas Park manufacturer nearly exhausted its general aggregate limit through a bruising claim year ending December 31. Its risk manager asks two questions at renewal: does the depleted aggregate carry into the new term, and could the insurer have restored the old aggregate midterm for extra premium? What is the accurate answer?

• A. Depleted aggregates follow the insured for three years by law.
• B. Aggregates never deplete, so the question is moot.
• C. The new policy year begins with whatever remained on December 31.
• D. The aggregate limit is reinstated in full at the start of each new policy period, and midterm restoration of an exhausted aggregate is a matter of negotiation, not an automatic right.

267. Two Tampa manufacturers retain the first $50,000 of every liability loss, but through different mechanisms: one has a $50,000 deductible on its policy, the other a $50,000 self-insured retention beneath its coverage. A $40,000 claim with heavy defense costs arrives at each company. How do the two structures differ in practice?

• A. A self-insured retention means the insurer defends everything free of charge.
• B. They are interchangeable terms with no practical difference.
• C. A deductible applies only to defense costs, never to damages.
• D. With the deductible, the insurer typically handles and defends the claim from the first dollar and then recovers the deductible from the insured; with the self-insured retention, the insured must pay and manage losses within the retention itself before the policy engages.

268. A forklift grazes a visiting vendor at a Bartow packing plant. The vendor walks away smiling, so the plant manager mentions nothing to the company's liability insurer. Fourteen months later, the vendor sues, claiming a degenerative back injury from the incident, and witnesses have scattered. What does the policy's notice condition require, and why does it exist?

• A. Notice is required only after a lawsuit is actually filed, so the manager complied fully.
• B. Notice may be given any time within five years without consequence.
• C. The insured must give prompt notice of an occurrence that may result in a claim, because early notice lets the insurer investigate while evidence and witnesses are still available.
• D. Only the injured vendor can give valid notice to the insurer.

269. A Miami event-staging company carries general liability with a $1,000,000 each-occurrence limit and a $2,000,000 general aggregate, and settlements earlier in the policy year have already consumed $1,600,000 of that aggregate. A rigging collapse now produces a single covered loss of $700,000. State the policy's payment and the amount the company must absorb.

• A. The policy pays $200,000 and the company absorbs $500,000.
• B. The policy pays $1,000,000 and the company absorbs nothing.
• C. The policy pays $700,000 and the company absorbs nothing, because the loss is under the occurrence limit.
• D. The policy pays $400,000, the remaining aggregate, and the company absorbs the other $300,000.

270. A judgment creditor holds an unsatisfied award against a Davie trucking firm that has since filed for bankruptcy protection. The firm's liability insurer argues that its policyholder's insolvency dissolves any duty to pay the judgment. What do liability policy conditions say about this argument?

• A. The claim transfers to the bankruptcy trustee, who pays it from the insurer's premium refunds.
• B. The creditor must wait until the insured emerges from bankruptcy before any payment.
• C. The insurer is correct; bankruptcy of the insured voids the policy retroactively.
• D. The policy provides that bankruptcy or insolvency of the insured does not relieve the insurer of its obligations under the policy.

271. A Winter Garden restaurateur faces two uncertainties this year: a hurricane could destroy her dining room, and her planned second location could either flourish or flop. Her agent explains that insurance can address only one of these. Which distinction is the agent drawing?

• A. Insurance covers whichever risk the insured fears more.
• B. The expansion is the insurable one, because business ventures are predictable.
• C. Hurricane damage is a pure risk involving only the chance of loss, and it is insurable; the new location is a speculative risk with a chance of gain, which insurance does not cover.
• D. Both are speculative risks, so neither can be insured.

272. An underwriter reviewing two Pasco County homeowners files notes that one applicant inflated a past claim to collect extra money, while the other habitually leaves her doors unlocked because she figures insurance will cover any theft. Classify these two behaviors using hazard terminology.

• A. The unlocked doors are a moral hazard and the claim padding is merely a peril.
• B. Both are perils, since each can cause a loss directly.
• C. Both are physical hazards because they involve the condition of the home.
• D. The claim inflation reflects moral hazard, a tendency toward dishonesty, while the careless unlocked doors reflect morale hazard, indifference to loss because insurance exists.

273. An actuary pricing homeowners policies explains to a trainee why the company writes tens of thousands of similar homes across many counties rather than a handful of mansions in one neighborhood. Which foundational principle is she describing?

• A. The law of large numbers, under which actual losses across many similar exposure units become more predictable and closer to expected losses.
• B. The principle of subrogation, which spreads losses among wrongdoers.
• C. The doctrine of proximate cause, which links each loss to its origin.
• D. The parol evidence rule, which stabilizes written contracts.

274. Corinne Baptiste sold her Fort Pierce rental house in January but absentmindedly kept paying premiums on the property policy she had held for years. In June, fire destroys the house, which now belongs entirely to the buyer. When Corinne files a claim, why will it fail?

• A. Because property insurance requires the insured to hold an insurable interest at the time of loss, and after the January sale she would suffer no financial harm from the fire.
• B. Because claims can only be filed within 90 days of buying a policy.
• C. The claim succeeds; continuous premium payment preserves her right to recover.
• D. Because fires in vacant months are never covered.

275. A prelicensing instructor in Ocoee asks her class to contrast when insurable interest must exist in property insurance versus life insurance. Which statement gets the timing right?

• A. Property insurance requires it at inception only, while life insurance requires it at death.
• B. Neither line requires insurable interest as long as premiums are current.
• C. Both lines require insurable interest continuously from application through claim.
• D. Property insurance requires it at the time of loss, while life insurance requires it at the inception of the policy.

276. During a licensing study group in Doral, a candidate asks what each side actually contributes to make an insurance contract's consideration valid. What is the correct pairing?

• A. Consideration is unnecessary in insurance because policies are regulated contracts.
• B. The insured contributes the premium and the truthful statements in the application, while the insurer contributes its promise to pay covered losses.
• C. Both sides contribute equal sums of money into a trust account.
• D. Only the insurer gives consideration, since it holds all the funds.

277. A Hollywood warehouse operator attempts to buy property coverage on inventory that turns out to be stolen electronics he is fencing for a smuggling ring. Even with premiums paid and forms signed, why is this arrangement unenforceable as an insurance contract?

• A. The contract is enforceable; payment of premium cures any defect.
• B. Because electronics are excluded property in all commercial forms.
• C. Because a valid contract requires a legal purpose, and insuring contraband to protect an illegal enterprise fails that element.
• D. Because warehouses cannot be insured without sprinkler systems.

278. An underwriter in Lake Mary accepts a commercial application largely on the strength of the applicant's answers, without inspecting the premises, and the applicant likewise trusts the policy will perform as promised. Which doctrine describes the heightened honesty each party owes the other in this exchange?

• A. Utmost good faith, under which insurance transactions depend on full honesty and fair disclosure from both parties.
• B. Caveat emptor, under which each side must protect itself.
• C. Respondeat superior, which binds employers for employee acts.
• D. Strict liability, which applies to defective products.

279. A marine underwriter requires a Islamorada charter captain to warrant that a working automatic fire suppression system is aboard at all times, while a homeowners applicant in the same office merely represents that her roof was replaced recently. How do these two kinds of statements differ in legal effect?

• A. A representation is the stronger promise because it appears in the application.
• B. Warranties apply only to life insurance contracts.
• C. A warranty becomes part of the contract and must be strictly true, with breach giving grounds to void coverage, while a representation need only be substantially true and defeats coverage only when material.
• D. They are legally identical; the words are interchangeable.

280. A homeowners policy's water damage wording is genuinely ambiguous, and a Fort Myers insured and her insurer read it in opposite ways after a loss. When the dispute reaches a court, why is the tie likely to be broken in the insured's favor?

• A. Because insurance policies are contracts of adhesion drafted entirely by the insurer, so ambiguities are construed against the drafter.
• B. Because the insured's interpretation was filed with the state first.
• C. Because judges always favor whichever party has fewer resources.
• D. Because water damage claims enjoy a special statutory presumption of coverage.

281. A Cocoa Beach homeowner pays $3,200 in annual premium for years without a single claim, while her neighbor pays one premium and collects $280,000 after a devastating fire the next month. Which contract characteristic do these unequal outcomes illustrate?

• A. The personal nature of insurance contracts.
• B. A violation of the principle of indemnity by the neighbor.
• C. A defect in the contract that entitles the first homeowner to a refund.
• D. The aleatory nature of insurance, in which the values exchanged are unequal and depend on an uncertain future event.

282. A Palm Harbor policyholder stops paying premium midterm, and her insurer cannot sue her to force payment; it can only let the coverage lapse. Yet if she pays and suffers a covered loss, the insurer is legally bound to perform. Which contract characteristic explains this one-sided enforceability?

• A. The policy is void because both parties must owe identical duties.
• B. Insurance is a unilateral contract; only the insurer makes a legally enforceable promise, while the insured's payment is a condition rather than an obligation.
• C. Insurance is an aleatory arrangement, which forbids suing anyone.
• D. Insurance is a bilateral contract with mutual enforceable promises.

283. The agency agreement between Suncoast Underwriters and its Bradenton agent Talia Rowe spells out that she may solicit applications, quote filed rates, and bind coverage up to stated limits. When Talia binds a homeowners risk within those limits, which type of agent authority is she exercising?

• A. Apparent authority, because customers watched her do it.
• B. Implied authority, because binding is customary in the industry.
• C. Express authority, the power specifically granted in writing by her agency contract.
• D. No authority; only insurer home offices can bind coverage.

284. Nothing in agent Marcus Deveraux's contract with his insurer mentions printing business cards with the company logo, collecting initial premiums with applications, or scheduling inspections, yet he does all three daily from his Ocala office. What is the source of his authority for these routine acts?

• A. Statutory authority granted personally by the Legislature.
• B. He has no authority for these acts and commits a violation each day.
• C. Implied authority, which covers acts not spelled out in the contract but reasonably necessary and customary for carrying out his express duties.
• D. Express authority, because everything an agent does is deemed written into the contract.

285. Months after an insurer terminates agent Sylvie Marchand, it never retrieves its signage from her Kissimmee storefront or its application stock from her office, and she keeps writing its business. A customer who buys a policy through her reasonably believes she still represents the company. If the insurer later disputes her acts, what doctrine may bind it anyway?

• A. Apparent authority, because the insurer's own conduct allowed the public to reasonably believe she remained its agent.
• B. Implied authority, because writing business is customary for agents.
• C. Express authority, since her old contract still exists somewhere in a file.
• D. No doctrine; customers must verify appointments before buying.

286. On a Friday afternoon, a Stuart marina owner completes an application for property coverage on a new storage building, and the agent, acting within his binding authority, tells him coverage is effective immediately, with the policy to be issued next week. Lightning damages the building on Sunday. What is the status of the marina's protection?

• A. Coverage begins only when the printed policy is delivered and signed.
• B. The binder placed temporary coverage in force at once, so the Sunday loss is covered even though no policy document existed yet.
• C. No coverage existed because binders must be in writing to be valid.
• D. The binder covered liability only, never property damage.

287. After hail ruins the aging roof of his Sanford duplex, an owner demands his insurer pay for an upgraded metal roof worth far more than what was destroyed, arguing he deserves something extra for his trouble. Which foundational principle limits his recovery, and what does it require?

• A. The entire contract provision, which guarantees upgrades at renewal.
• B. The principle of indemnity, which aims to restore the insured to his approximate pre-loss financial position without allowing a profit from the loss.
• C. No principle applies; insureds may always choose superior replacements at insurer expense.
• D. The principle of contribution, which requires insurers to pay double when the insured is inconvenienced.

288. A Clermont trucking company studies its fender-bender history and decides to raise its physical damage deductibles sharply, budgeting for small repairs itself, while dropping a dangerous overnight route entirely. Which pair of risk management techniques has it applied?

• A. Insurance is the only recognized risk management technique, so neither act qualifies.
• B. Transfer for the deductibles and sharing for the route.
• C. Retention for the small losses it now absorbs, and avoidance for the route it eliminated.
• D. Avoidance for the deductibles and retention for the route.

289. An insurer offering low-priced flood-prone-area coverage with no underwriting questions discovers that nearly everyone applying owns waterfront property with repeated past flooding, while owners of high-ground homes ignore the product. Which insurance problem is unfolding, and why does it threaten the insurer?

• A. Adverse selection: those most likely to suffer losses are disproportionately buying the coverage, which will drive losses above what the premiums assumed.
• B. Twisting, because customers switched from other insurers.
• C. Subrogation abuse by the policyholders.
• D. The law of large numbers, which guarantees profit once enough policies are sold.

290. A midsize Florida homeowners insurer with heavy coastal exposure pays a portion of its premium to a larger company that agrees to absorb part of any catastrophic hurricane losses the insurer sustains. What is this arrangement, and what does it accomplish?

• A. Reinsurance: the ceding insurer transfers part of its risk to a reinsurer, stabilizing results and protecting its capacity against catastrophic loss.
• B. Coinsurance, the percentage-of-value requirement found in property policies.
• C. Self-insurance, because the company keeps handling its own claims.
• D. Surplus lines placement, because the risk left the admitted market.

291. While completing his Florida general lines license application, Marcus of Ocala answers No to a question asking whether any insurance license he has ever held was revoked, even though Georgia revoked his agent license two years earlier. If the Department of Financial Services later discovers the truth, what is the most likely consequence?

• A. Nothing, because out-of-state licensing history is beyond Florida's jurisdiction
• B. He simply files a corrected application, and no discipline may be imposed for the original false answer
• C. The prior revocation is disregarded because it occurred more than one year before he applied
• D. The application can be denied, and any license already issued can be suspended or revoked, because a material misstatement on the application is a ground for discipline

292. Dana is applying for a Florida general lines agent license after moving to Sarasota. Along with her application and prelicensing coursework, what identification step must she complete so the state can review her criminal history?

• A. Post a surety bond payable to the state of Florida
• B. Submit fingerprints for a state and federal background check
• C. Publish a notice of her application in a local newspaper
• D. Provide two notarized character references from currently licensed agents

293. Priya of Fort Myers passed her licensing examination and received her Florida general lines license on Monday. On Tuesday she begins soliciting homeowners applications on behalf of Gulfline Mutual, an insurer that has never appointed her and has no record of her. What is wrong with this arrangement?

• A. Nothing, because her license authorizes her to represent any admitted insurer in Florida
• B. A licensed agent must also be appointed by an insurer before acting as its representative, so she may not transact business for Gulfline Mutual
• C. She needs a separate license, rather than an appointment, for each insurer she represents
• D. She needs an appointment only if she sells more than one line of insurance

294. A newly licensed agent in Bradenton asks her mentor to explain the difference between her license and her appointments. Which statement correctly describes who grants each?

• A. The license is granted by the state through the Department of Financial Services, while each appointment is authority granted by an insurer that is then recorded with the state
• B. The license and the appointment are two names for the same authorization
• C. The license is granted by her agency's owner, while appointments come from the state
• D. Both the license and all appointments are granted directly by the insurers she represents

295. Bayline Insurance Company decides to end its relationship with an agent in Clearwater who has been placing business with a competitor in violation of his contract. When Bayline terminates his appointment, what must the company do?

• A. Physically confiscate the agent's license certificate and return it to the state
• B. Notify the Department of Financial Services that the appointment has been terminated
• C. Ask every other insurer that has appointed the agent to terminate him as well
• D. File notice of the termination with the department; the agent's license itself and his other appointments are unaffected by Bayline's decision alone

296. Roberto has held his Florida general lines license for several years and plans to keep working in Port St. Lucie for decades. What ongoing educational obligation applies to him as a resident licensee?

• A. No further education is required once the initial license is issued
• B. He must retake the full licensing examination at every renewal
• C. He owes continuing education only in years when he changes appointing insurers
• D. He must complete state-approved continuing education on a recurring cycle to maintain his license

297. An agent in Winter Haven has ignored every continuing education notice for his current compliance cycle and has completed none of the required coursework. What exposure does this create for his ability to keep doing business?

• A. None, because continuing education is a voluntary professional courtesy
• B. He may continue transacting indefinitely as long as clients do not complain
• C. His insurers must pay a penalty on his behalf, but his own status is unaffected
• D. His license and appointments become subject to termination or nonrenewal until he comes into compliance

298. The sole agent and owner of a small Naples insurance agency dies unexpectedly. His widow, who has never held an insurance license, wants authority to keep the agency operating while the family arranges an orderly sale of the business. What accommodation does Florida licensing law offer in this situation?

• A. She may operate indefinitely without any license as long as she discloses the death to customers
• B. She automatically inherits her husband's license along with the rest of his estate
• C. The agency must cease all insurance activity immediately and permanently
• D. A temporary license may be issued to a surviving spouse, family member, or employee so the business can continue for a limited period

299. A one-person agency owner in Vero Beach suffers a stroke and cannot work for the foreseeable future. His longtime office employee, who is unlicensed, needs authority to service the book of business during his recovery. Which licensing mechanism fits these facts?

• A. A temporary license issued because of the agent's disability, allowing the employee to carry on the business for a limited time
• B. An emergency waiver that permanently exempts the employee from all licensing requirements
• C. A courtesy arrangement in which the disabled agent's signature is stamped on the employee's paperwork
• D. A transfer of the agent's own license into the employee's name

300. A Department of Financial Services investigation confirms that Tyler, a Tampa general lines agent, deposited clients' premium payments into his personal checking account and spent the money on a car loan. Under Florida's license discipline framework, how is this conduct treated?

• A. It is a discretionary ground, so the department may choose to issue only a written warning
• B. It is purely a civil matter between Tyler and his clients, with no license consequences
• C. Discipline is possible only if a client proves an actual financial loss
• D. It is a compulsory ground for suspension or revocation, and Tyler also faces potential criminal exposure for converting funds he held in a fiduciary capacity

301. An agency principal in Delray Beach keeps one bank account for everything: collected premiums awaiting remittance, the agency's operating money, and her personal savings. What does Florida law say about handling collected premiums this way?

• A. Premiums are held in a fiduciary capacity and must be kept and accounted for separately, not mingled with personal funds
• B. It is acceptable as long as the account never has a negative balance
• C. It is permitted whenever the insureds sign a waiver consenting to the arrangement
• D. It is required, because Florida directs agents to consolidate all funds in a single account

302. A Pensacola agency collects a large commercial premium check on the first of the month but holds the money for several weeks to smooth out its own payroll before forwarding anything to the insurer. No client ever notices. Why is this practice still a violation?

• A. It is not a violation, because the money was eventually forwarded in full
• B. It is only a violation if the insurer files a written complaint
• C. It is only a violation when the delayed amount exceeds the agency's annual commission income
• D. Collected premiums must be remitted to the insurer in the regular course of business; using trust funds as working capital, even briefly, breaches the agent's fiduciary duty

303. A commercial insured in Stuart cancels her package policy midterm, and the insurer routes the unearned premium refund through the producing agent. The agent decides to hold the refund as a credit against insurance the client might buy next year, without asking her. How should the refund have been handled?

• A. The agent may donate the refund to charity in the client's name if she cannot be reached
• B. Return premium belongs to the insured, and the agent must promptly account for it and pay it over rather than hold it without authorization
• C. The agent may keep the refund as compensation for the work of processing the cancellation
• D. The agent may hold the refund for up to a full policy term as a customer convenience

304. A Coral Gables agent with a spotless record commits a first-time recordkeeping violation that investigators agree was careless rather than intentional. Rather than suspending her license, what middle-ground disposition is available to the department?

• A. Transferring her license to another state's regulator
• B. Placing the licensee on probation subject to stated conditions for a set period
• C. Requiring her appointing insurers to serve the suspension in her place
• D. Permanent revocation, since every proven violation requires the harshest penalty

305. During a disciplinary review, the Department of Financial Services sorts an agent's proven misconduct into grounds where suspension or revocation is mandatory and grounds where the penalty is discretionary. Which finding falls on the mandatory side of that line?

• A. Willful deception of a policyholder with regard to an insurance policy
• B. A single nonwillful violation of a technical filing requirement
• C. Being the subject of one consumer complaint that is still under review
• D. Failing to promptly notify the department of a change in mailing address

306. An applicant in Homestead finished serving a sentence last year for a felony conviction involving fraudulent financial dealings. He asks whether the conviction matters now that his sentence is complete and he can pass the licensing examination. What is the accurate answer?

• A. The conviction can disqualify him, because the state screens applicants for trustworthiness and treats crimes of dishonesty with particular severity
• B. The conviction is irrelevant once the sentence has been fully served
• C. Only convictions entered by Florida courts are considered in licensing decisions
• D. Passing the examination automatically overrides any criminal history

307. To boost sales, an agency owner in Palm Bay offers her unlicensed receptionist a bonus for every auto policy that closes from quotes the receptionist prepares and presents to walk-in customers. What is the legal defect in this compensation plan?

• A. The only problem is that the bonus should be paid by the insurer instead of the agency
• B. Sale-based commission compensation may be paid only to appropriately licensed individuals, and the receptionist is both unlicensed and performing work that itself requires a license
• C. Bonuses are lawful only when paid quarterly rather than per policy
• D. The plan is lawful because the receptionist never signs the applications

308. Two general lines agents, both licensed and appointed for property and casualty business, jointly produce a large manufacturing account in Lakeland; one brings the relationship and the other designs the coverage program. They agree to split the commission. How does Florida law view this split?

• A. It is unlawful rebating, since commission may never be divided
• B. It is churning, because two producers touched the same account
• C. It is lawful only if the department approves the split percentage in advance
• D. It is permissible, because commission may be shared between agents who are each properly licensed for the line of business involved

309. A licensee in Ocoee obtained his general lines license mainly so he could write the coverage on his own rental properties, his restaurant, and policies for his immediate family; outside business is an afterthought. Why does this pattern put his license at risk?

• A. Agents are forbidden from ever insuring any property they personally own
• B. Family members may only be insured through an unrelated agency
• C. Restaurants are a prohibited class of business for general lines agents
• D. A license may not be held primarily to write controlled business, meaning coverage on the licensee's own interests, family, or employer, and a license used chiefly that way is subject to action

310. An entrepreneur in Lakeland wants to register her new insurance agency under the name Florida State Insurance Bureau because it sounds established and official. Why will this name draw an objection from regulators?

• A. Names referencing Florida are reserved for companies domiciled outside the state
• B. The name deceptively implies affiliation with a government agency, and misleading agency names are prohibited
• C. Agency names may not include the word insurance in any form
• D. Only insurers, never agencies, are allowed to use trade names

311. A Gainesville agency runs radio spots promising listeners ironclad protection backed by the strength of our national partners, without identifying any insurer, and hinting that coverage terms are more generous than the policies actually provide. What standard do these advertisements violate?

• A. Only a private broadcasting standard enforced by the radio station
• B. The prohibition on untrue, deceptive, or misleading advertising, which requires ads to fairly describe the coverage and not obscure who stands behind it
• C. None, because advertising is commercial speech exempt from insurance regulation
• D. A rule that limits insurance advertising to print media

312. Atlantic Reef Assurance Ltd., an offshore company with no Florida certificate of authority, offers a Key West agent an oversized commission to funnel homeowners business its way. If the agent starts placing Florida risks with this company, what has he done?

• A. He is protected as long as the offshore company pays its claims on time
• B. He has unlawfully aided an unauthorized insurer, exposing himself to license discipline and potential personal responsibility on the policies
• C. Nothing improper, because the customer, not the agent, chooses the insurer
• D. He has merely engaged in aggressive but lawful price competition

313. A homeowner applying for coverage in Deltona truthfully tells her agent that she owns a large dog and keeps a trampoline in the backyard. Wanting the application approved at the best rate, the agent leaves both answers off the application before submitting it. What has the agent done?

• A. Acted properly, because only answers the applicant writes personally can be false
• B. Committed a harmless error, since underwriting will inspect the property anyway
• C. Provided good customer service by presenting the risk in its best light
• D. Committed misrepresentation on the application, a disciplinable offense that also puts the insured's coverage at risk if the insurer relies on the false picture of the risk

314. While the licensed agent is on vacation, an office assistant in Tallahassee quotes an auto policy for a walk-in customer, recommends liability limits, and binds the coverage. The assistant holds no insurance license. Which activities crossed the legal line?

• A. Only binding the coverage; quoting and recommending limits are clerical tasks
• B. All three, because quoting, advising on coverage, and binding are each part of transacting insurance and require a license
• C. None of them, because the assistant acted under the absent agent's general instructions
• D. Only the recommendation of limits, since quoting and binding are automated functions

315. Renata, a St. Petersburg general lines agent, wants to share part of her commission with customers as a sales incentive. Under Florida law, when is that kind of rebate lawful?

• A. Only when the rebate is offered uniformly to all insureds in the same actuarial class under a rebating schedule the agent has filed with the insurer
• B. Never, because Florida treats every rebate of commission as a criminal act
• C. Whenever the customer requests the rebate in writing before the sale
• D. Only for customers who agree to place all of their policies through her agency

316. Competing for a large condominium association account in Boca Raton, an agent privately offers the board treasurer half of his commission back if the association buys through him. He has filed no rebating schedule and makes the offer to no other client. How is this conduct classified?

• A. Lawful negotiation, as long as the payment is disclosed on the invoice
• B. Twisting, because an existing policy is being replaced
• C. Lawful discounting, because the money comes from the agent rather than the insurer
• D. Unlawful rebating, because the inducement is selective and not made under a filed, uniformly applied schedule

317. At a Melbourne home show, an agency hands out branded umbrellas, koozies, and rain gauges of modest value to anyone who stops by its booth, whether or not they ever buy a policy. Is this promotional giveaway an unlawful inducement?

• A. Yes, any item of value given to a prospect is automatically rebating
• B. Yes, unless every recipient signs an application on the spot
• C. No, but only because the items were given away outdoors
• D. No, modest advertising and promotional gifts within the statutory value cap are permitted and are not treated as unlawful rebating

318. An agent in Kissimmee wants Hector's homeowners account, so he exaggerates the exclusions in Hector's current policy and misstates its renewal premium until Hector agrees to cancel it and buy a policy from the agent's company instead. What unfair trade practice is this?

• A. Twisting
• B. Coercion
• C. Defamation
• D. Sliding

319. Over four years, an agent persuades a Fort Lauderdale client to replace her coverage program repeatedly, each time financing the new purchase with values or refunds from the coverage being replaced. The replacements generate fresh commissions for the agent while leaving the client no better off, a pattern the client never detects. What practice does this describe?

• A. Churning
• B. Defamation
• C. Rebating
• D. Boycott

320. A compliance trainer in Orlando asks her class to articulate the core difference between churning and twisting. Which response should she accept as correct?

• A. Churning is lawful when the agent discloses the new commission in writing
• B. Churning centers on replacement activity that consumes the customer's existing policy values mainly to produce new compensation, while twisting centers on deceptive or incomplete comparisons used to induce a replacement
• C. They are interchangeable labels for the same violation
• D. Twisting applies only to automobile insurance, while churning applies only to homeowners policies

321. Closing an auto sale in Hialeah, an agent tells the buyer that a motor club membership must be purchased because state law requires it with every auto policy. No such requirement exists, and the membership carries its own charge. What violation has occurred?

• A. Defamation, because the statement disparaged the motor club
• B. Sliding, because an ancillary product was misrepresented as required by law
• C. Rebating, because the membership was offered at a package price
• D. No violation, because motor club memberships have genuine value

322. Quoting a renters policy in Daytona Beach, an agent folds the cost of an accidental death product into the single premium figure he gives the applicant, never mentioning that the product is separate, optional, and individually priced. The applicant pays the total without knowing what it includes. What has the agent done?

• A. Committed coercion by pressuring the applicant into a purchase
• B. Committed twisting by replacing the applicant's prior coverage
• C. Lawful bundling, because package pricing is standard industry practice
• D. Committed sliding by charging for an additional product without the applicant's informed consent

323. Frustrated at losing accounts to a competitor's carrier, an agent in Cape Coral circulates a flyer at a chamber of commerce breakfast falsely claiming that the rival insurer is on the brink of insolvency and cannot pay claims. Which unfair trade practice is this?

• A. Defamation of an insurer
• B. Lawful comparative advertising
• C. Sliding
• D. Churning

324. A mortgage officer in Panama City tells a borrower that her home loan will close only if she buys her homeowners policy through the lender's affiliated insurance agency, even though the borrower already has acceptable coverage lined up elsewhere. What unfair practice does this demand represent?

• A. Twisting, because the borrower's planned coverage was criticized
• B. Coercion, and it is unlawful; a lender may require that adequate insurance exist but may not dictate the particular agent or insurer the borrower must use
• C. Rebating, because the lender profits from the affiliated agency
• D. Lawful tying, because a lender may dictate the insurance source for any collateral it finances

325. Three established agencies in a Panhandle county agree among themselves to pressure local insurers into refusing appointments to a new discount agency, threatening to move their books of business if any carrier signs the newcomer. What kind of unfair practice is this concerted conduct?

• A. Lawful competition, because each agency acted to protect its own market share
• B. Sliding, because a competitor was disadvantaged
• C. Churning, because business would move between carriers
• D. An unlawful boycott and intimidation arrangement that restrains the insurance business

326. To close a sale in Bradenton, an agent assures a first-time homeowner that the standard homeowners policy he is buying covers rising floodwater the same way it covers wind damage. The policy in fact excludes flood. When the agent makes this statement to land the sale, what violation occurs?

• A. Rebating, because the misstatement added value to the offer
• B. Misrepresentation of policy terms to induce a purchase, an unfair trade practice
• C. Churning, because the homeowner previously rented
• D. None, if the homeowner had an opportunity to read the policy later

327. A direct-mail campaign sent across Volusia County promises that a certain package policy pays every claim in full, no questions asked, and guarantees rates will never rise. Neither statement is true of the product. What body of law does this mailer violate?

• A. Nothing, because puffery in mass mailings is always excused
• B. The rules governing surplus lines placements
• C. The prohibition on false and deceptive advertising of insurance benefits and terms
• D. Only postal regulations concerning bulk mail

328. After a kitchen fire in Deltona, a policyholder sends her insurer three letters and leaves repeated messages over several weeks asking about her claim, and receives no reply of any kind. Investigators find the insurer routinely leaves claim correspondence unanswered across its book of business. Which unfair claims settlement practice does this pattern show?

• A. Failing to acknowledge and act promptly upon communications about claims
• B. Twisting the policyholder into replacement coverage
• C. Unlawful rebating of claim proceeds
• D. Defamation of the policyholder

329. An adjuster handling a water damage claim in Winter Haven denies it the same afternoon it is reported, without visiting the property, reviewing photographs, reading the plumber's report the insured offered, or examining the policy language. Records show the carrier resolves many claims this way. What practice does this illustrate?

• A. Denying claims without conducting a reasonable investigation based on the available information
• B. A lawful denial, because insurers may decline any claim within the first day
• C. Churning of the claim file
• D. Efficient claims triage that regulators encourage

330. After a burglary claim is filed in Largo, the insurer's claim representative tells the policyholder that her policy never covers theft of property from inside a vehicle, hoping she will drop that part of the claim. The policy actually provides that coverage. As a recurring tactic at this carrier, what does this statement amount to?

• A. A lawful reservation of rights
• B. Sliding, because a coverage was concealed
• C. A harmless negotiating position that claim representatives may take
• D. Misrepresenting pertinent facts or policy provisions relating to the coverage at issue, an unfair claims settlement practice

331. An insurer operating across Central Florida develops a habit of telling claimants their claims are denied during brief phone calls, then refusing every request to explain the decision or identify what the denial rests on. What obligation is the insurer evading?

• A. The duty to obtain a court order before denying any claim
• B. The duty to route all denials through the claimant's own agent
• C. The duty to provide the claimant a reasonable written explanation of the basis for the denial
• D. The duty to settle every claim for the full amount demanded

332. A market conduct review of a small carrier finds exactly one claim acknowledgment that went out late in the past year, caused by a clerical mix-up and corrected the next morning with an apology. Why might this incident alone fail to establish an unfair claims settlement violation?

• A. Because many of the listed claims practices become violations when committed knowingly or with such frequency as to indicate a general business practice, and one corrected clerical slip shows neither
• B. Because unfair claims practices can only be committed by adjusters, not by insurers
• C. Because claims misconduct is measured solely by the dollar size of the claim
• D. Because insurers receive an unlimited number of excused violations each year

333. Applying for warehouse coverage in Doral, a business owner conceals that he stores commercial fireworks inventory in the building, answering the hazardous-materials question falsely. After a fire, the insurer discovers the concealment. What effect can the false answer have on his recovery?

• A. The insurer may deny recovery, because the concealment was material to its acceptance of the risk and it relied on the false answer when issuing the policy
• B. The insurer's only remedy is to raise the premium going forward
• C. None, because an issued policy can never be challenged
• D. The claim must be paid, but the agent forfeits his commission

334. The day after his uninsured warehouse in Ocala is damaged by a storm, a business owner begs his agent to write a policy and date the paperwork as though coverage had begun the previous week. The agent refuses. What principle supports the refusal?

• A. Backdating coverage to capture a loss that has already happened is fraud, exposing both agent and applicant to discipline and criminal liability
• B. The agent should have referred the request to the insurer's marketing department
• C. Backdating is acceptable when the storm was an act of nature rather than arson
• D. Backdating is permitted if the applicant pays a full year of premium in advance

335. Months after a hurricane, homeowners across an insurer's Gulf Coast book who submitted complete, sworn proof of loss statements still have no answer about whether their claims are covered, in whole or in part. The insurer neither pays, denies, nor explains. What listed unfair claims settlement practice fits this conduct?

• A. Controlled business violations
• B. Failing to affirm or deny coverage within a reasonable time after proof of loss statements have been completed
• C. Twisting policyholders into new coverage
• D. Unlawful commission sharing among adjusters

336. Camila is registering her sedan in Hialeah for the first time. Besides personal injury protection, what liability coverage must she carry to satisfy Florida's requirements for registering the vehicle?

• A. Comprehensive and collision coverage on the sedan itself
• B. Uninsured motorist coverage equal to her liability limits
• C. Bodily injury liability coverage on a split-limit basis
• D. Property damage liability coverage of at least $10,000 per crash

337. Rather than buying a separate property damage liability limit, a rideshare driver in Orlando asks his agent whether one combined liability limit can satisfy Florida's property damage requirement. What combined limit does Florida law accept as an alternative?

• A. A combined limit of $15,000 covering all liability arising from a crash
• B. A combined limit of $10,000 shared between liability and medical payments
• C. A combined bodily injury and property damage liability limit of $30,000 for any one crash
• D. No alternative exists; the property damage limit must always be written separately

338. Carrying the minimum $10,000 of property damage liability, a distracted driver in Cocoa sideswipes three parked cars in a single crash, causing $4,000, $5,000, and $6,000 in damage respectively. How does his policy respond to the $15,000 in total damage?

• A. It pays all $15,000, because each damaged car triggers a separate limit
• B. It pays at most $10,000 in total, because the limit applies per crash regardless of how many vehicles were damaged
• C. It pays $10,000 to each owner, for a total of $30,000
• D. It pays nothing, because striking multiple vehicles voids the coverage

339. Stopped at a light in Tampa, Alicia is rear-ended by another driver who is clearly at fault, and she suffers a neck injury. Under Florida's no-fault system, which coverage pays her initial medical expenses?

• A. Her collision coverage, after she pays the deductible
• B. Her own personal injury protection coverage, which pays without regard to fault
• C. The other driver's bodily injury liability coverage, because he caused the crash
• D. The other driver's property damage liability coverage

340. A claims trainee in Jacksonville asks what the ceiling is on combined medical and disability benefits under a standard Florida personal injury protection coverage for one injured person in one crash. What is the correct figure?

• A. $5,000
• B. $25,000
• C. $10,000
• D. $30,000

341. After a crash in Sarasota, Miguel incurs $8,000 in reasonable and necessary medical expenses, all from treatment that began promptly and qualifies for full personal injury protection benefits. Ignoring any deductible, how much of the $8,000 will his PIP medical benefit reimburse?

• A. $5,000, because medical benefits are capped at half the PIP limit
• B. $4,800, because PIP reimburses 60 percent of medical expenses
• C. $8,000, because PIP pays covered medical bills in full
• D. $6,400, because PIP reimburses 80 percent of reasonable medical expenses

342. Following a serious highway crash near Ocala, Brianna's qualifying medical expenses total $15,000. Her treatment satisfied every personal injury protection condition. Applying the reimbursement percentage and the coverage limit, what does her PIP medical benefit actually pay?

• A. $15,000, the full amount billed
• B. $12,000, which is 80 percent of her expenses
• C. $10,000, because 80 percent of $15,000 is $12,000 but benefits stop at the coverage limit
• D. $7,500, half of the billed amount

343. An underwriting instructor in Gainesville poses a puzzle: at what total of reasonable medical expenses does Florida personal injury protection's 80 percent reimbursement exactly consume the entire $10,000 medical and disability limit, assuming no lost income claim and no deductible?

• A. $18,000 in expenses, since 80 percent of that equals the limit
• B. $12,500 in expenses, since 80 percent of that amount equals $10,000
• C. $10,000 in expenses, since the limit equals the billed amount
• D. $8,000 in expenses, since reimbursement runs out at 80 percent of the limit

344. A restaurant server in Clearwater is unable to work for a month after a covered crash, losing $3,000 in gross income that she documents with pay records. What lost income benefit does her Florida personal injury protection provide for that month?

• A. $2,400, which is 80 percent of the loss
• B. Nothing, because PIP never covers income loss
• C. $3,000, full replacement of the documented loss
• D. $1,800, because PIP disability benefits replace 60 percent of lost gross income

345. A self-employed fishing guide out of Destin cannot run charters for three months after a covered crash, losing $1,500 in documented gross income each month. When his personal injury protection disability claim is processed for the full period, what does it pay?

• A. $900, limited to 60 percent of a single month
• B. $3,600, applying an 80 percent rate to the total loss
• C. $2,700, applying the 60 percent income replacement rate to the $4,500 total loss
• D. $4,500, the whole documented loss for the three months

346. After a covered crash in Lakeland, Tomas has $9,000 in qualifying medical expenses and $2,000 in documented lost gross income. Applying Florida's personal injury protection percentages, what total benefit is payable, and does it fit within the limit?

• A. $8,400, consisting of $7,200 in medical benefits and $1,200 in disability benefits, all within the $10,000 limit
• B. $7,200 for medical only, because income loss cannot be combined with medical claims
• C. $11,000, the sum of his bills and lost income
• D. $10,000, because combined claims always pay the full limit

347. A badly injured warehouse worker from Plant City submits a personal injury protection claim showing $10,000 in qualifying medical expenses and $8,000 in documented lost gross income from the same crash. After applying both benefit percentages, how much does the insurer actually pay?

• A. $8,000, because the medical benefit alone defines the maximum payment
• B. $10,000, because the percentages produce $12,800 but the combined benefit is capped at the coverage limit
• C. $12,800, the sum of $8,000 in medical benefits and $4,800 in disability benefits
• D. $18,000, the total of his medical bills and lost income

348. A pedestrian from Fort Myers is struck and killed by a car whose personal injury protection coverage responds to the loss. Beyond any medical and disability benefits, what death benefit does Florida PIP provide to the survivors or estate?

• A. $10,000
• B. $5,000
• C. $25,000
• D. $2,500

349. Before dying of his injuries several days after a covered crash, a Port Charlotte man incurs $6,000 in qualifying medical expenses. His personal injury protection pays the medical benefit and then the death benefit. What total does the family receive from PIP?

• A. $5,000, because the death benefit replaces all other PIP benefits
• B. $9,800, consisting of $4,800 in medical benefits plus the $5,000 death benefit paid in addition
• C. $4,800, because no death benefit is payable when medical benefits were used
• D. $11,000, the sum of the full medical bills and the death benefit

350. Feeling only mild soreness after a fender bender in Boca Raton, Devon skips the doctor entirely. Three weeks later the pain worsens and he finally seeks treatment, then submits the bills under his personal injury protection. Why does the insurer deny the medical benefit?

• A. Because PIP only covers injuries treated at a hospital emergency department
• B. Because he should have billed his health insurance first
• C. Because he failed to receive initial services and care within 14 days after the crash, a condition of PIP medical benefits
• D. Because soft tissue injuries are excluded from PIP entirely

351. Two days after her crash in Pensacola, Ingrid is examined at an urgent care clinic, then begins a months-long course of physical therapy that continues well past the first month. Her insurer questions whether the later therapy sessions can qualify for personal injury protection. What is the correct analysis?

• A. Each individual therapy session must occur within its own 14-day window
• B. Because she received initial services within 14 days of the crash, her qualifying follow-up care afterward can continue to draw PIP benefits
• C. Only bills incurred within the first 14 days after the crash are ever payable
• D. The claim fails because urgent care does not count as initial treatment

352. While walking his dog in a Coral Springs crosswalk, Aaron, who owns an insured car parked at home, is struck by a passing sedan and breaks his leg. He was nowhere near his own vehicle. Can his own personal injury protection respond to his injuries?

• A. Yes, but only if the striking driver is convicted of a traffic offense
• B. No, pedestrians may claim only against the striking driver's property damage coverage
• C. No, PIP applies only to injuries sustained while inside the insured vehicle
• D. Yes, a named insured struck as a pedestrian by a motor vehicle is covered by his own PIP

353. Sixteen-year-old Maya lives with her parents in Weston and owns no car and no policy of her own. Riding home from school in a classmate's car, she is injured in a crash. Which personal injury protection coverage is the natural first source of her no-fault benefits?

• A. A state fund that pays benefits for all injured students
• B. The PIP under her parents' policy, because resident relatives without their own coverage look to the household policy
• C. The school district's general liability policy
• D. No PIP at all, because minors are excluded from no-fault benefits

354. Recovering from surgery after a covered crash, a single father in Kendall cannot cook, clean, or drive his children to school, so he pays a neighbor to handle those tasks while he heals. Which component of Florida personal injury protection addresses these expenses?

• A. The medical expense benefit, because the tasks aid his recovery
• B. The death benefit
• C. The disability benefit, which covers reasonable expenses for replacement services the injured person can no longer perform for himself
• D. No component; PIP is limited to doctor and hospital bills

355. A new resident from Georgia titling and registering her SUV in Kissimmee asks her agent which auto coverages Florida law obligates her to buy before the state will register the vehicle. Which pair is correct?

• A. Collision coverage and medical payments coverage
• B. Personal injury protection and property damage liability
• C. Comprehensive coverage and roadside assistance
• D. Bodily injury liability and uninsured motorist coverage

356. After backing into a mailbox and cracking his own rear bumper in the same low-speed mishap, a Palm Bay driver is puzzled that his insurer pays the neighbor for the mailbox under property damage liability but offers nothing for his bumper under that coverage. What explains the different treatment?

• A. Property damage liability covers damage the insured causes to other people's property, never damage to the insured's own vehicle
• B. The insurer made an error, since liability coverage repairs both vehicles involved
• C. Bumper damage is excluded from every automobile coverage
• D. Mailboxes receive priority payment under Florida law

357. After his conviction for driving under the influence in Escambia County, Walter is told that maintaining only the coverages needed to register a car will no longer be enough for him. What additional obligation does Florida's financial responsibility law impose on drivers after such events?

• A. Nothing changes, because registration coverages satisfy all Florida requirements permanently
• B. He must buy collision coverage on every vehicle he owns
• C. He must demonstrate higher levels of liability protection, including bodily injury liability coverage, to keep his driving privilege
• D. He is permanently barred from purchasing any auto insurance

358. A motorcyclist in Daytona Beach is injured when a pickup turns across his lane. He carries a motorcycle-only insurance policy and owns no car. When he asks about no-fault benefits for his medical bills, what should his agent explain about personal injury protection and motorcycles?

• A. Florida's no-fault law does not treat motorcycles as covered motor vehicles, so PIP benefits do not extend to his motorcycle riding
• B. PIP covers him only if he was wearing a helmet
• C. His motorcycle policy automatically includes PIP like any auto policy
• D. PIP applies to motorcycles but at double the usual benefit level

359. Hoping to save money after a covered crash in Tallahassee, an injured office worker spends her first two weeks seeing an unlicensed wellness coach recommended by a friend, paying cash for adjustment sessions. When she submits those charges to her personal injury protection, why are they rejected?

• A. Because PIP reimburses only services that are lawfully rendered by or under licensed medical providers or appropriate facilities
• B. Because wellness services are covered only on weekends
• C. Because she needed her employer's approval before seeking care
• D. Because cash payments can never be reimbursed by insurance

360. An injured driver in Miami Gardens carries both a rich employer health plan and Florida personal injury protection. After her crash, the hospital asks which coverage should be billed first for her crash-related treatment. What is the correct order of payment?

• A. The patient chooses whichever coverage has the lower deductible, and the other is void
• B. The two coverages split every bill equally from the first dollar
• C. PIP is primary for motor vehicle crash injuries, paying before the health plan
• D. The health plan pays first, and PIP covers only leftover copays

361. A Melbourne accountant misses six weeks of work after a covered crash, with $5,000 in documented lost gross income, and also incurs $7,500 in qualifying medical expenses. Applying both personal injury protection percentages, what combined benefit does she receive?

• A. $6,000, because the medical benefit displaces any income claim
• B. $10,000, because combined claims automatically pay the limit
• C. $9,000, consisting of $6,000 in medical benefits and $3,000 in disability benefits, within the $10,000 limit
• D. $12,500, her total documented losses

362. Pulling out of a driveway in St. Augustine, Nora clips her neighbor's brick mailbox and fence while also wrenching her back in the jolt. She carries the coverages Florida requires for registration. Which coverage responds to which loss?

• A. Both losses fall to the neighbor's homeowners insurance
• B. Her personal injury protection covers her back injury, and her property damage liability pays for the neighbor's fence and mailbox
• C. Property damage liability pays for her back treatment, and PIP repairs the fence
• D. Neither loss is covered, because the crash happened in a driveway

363. Reviewing her first homeowners quote in Punta Gorda, a buyer notices a separate deductible that applies only to hurricane losses and asks what choices Florida law gives her. Which set of hurricane deductible options must insurers generally make available?

• A. A single flat $250 deductible with no percentage alternatives
• B. $500, 2 percent, 5 percent, or 10 percent of the policy dwelling limits
• C. Any percentage between 15 and 25 percent of the home's market value
• D. No deductible at all, because hurricane losses are paid from the first dollar

364. A homeowner in Cape Coral insures her dwelling for $300,000 and selects the 2 percent hurricane deductible. When a hurricane damages her roof, how much of the loss must she absorb before the policy pays?

• A. $6,000
• B. $2,000
• C. $600
• D. $30,000

365. To trim his premium on a $400,000 dwelling limit in Naples, a homeowner chooses the 5 percent hurricane deductible, reasoning that 5 percent of a typical small roof claim would be trivial. After a hurricane causes $60,000 in damage, what deductible does he actually owe?

• A. $3,000, which is 5 percent of the $60,000 loss
• B. $20,000, because the percentage applies to the $400,000 dwelling limit, not to the size of the loss
• C. $500, the minimum hurricane deductible
• D. Nothing, because the loss exceeded ten percent of the dwelling limit

366. A retiree on a fixed income in Sebring insures his modest home with a $150,000 dwelling limit and picks the highest standard hurricane deductible option to minimize premium. If a hurricane strikes, what amount will he retain before coverage responds?

• A. $7,500
• B. $1,500
• C. $15,000, since the 10 percent option applied to the $150,000 dwelling limit produces that retention
• D. $10,000

367. After a hurricane, a Port St. Lucie policyholder complains she never realized her policy carried a large percentage hurricane deductible until her claim was reduced. What safeguard does Florida law build into residential policies to prevent exactly this surprise?

• A. Insurers must waive the deductible for any policyholder who claims surprise
• B. Hurricane deductibles are secret rating factors that need not appear in the policy
• C. The deductible applies only if the policyholder initialed every page of the policy
• D. The hurricane deductible must be prominently disclosed to the policyholder, stated clearly in the policy documents so the retained amount is apparent before a storm

368. Two separate hurricanes cross Charlotte County in the same calendar year, each damaging Elena's insured home. She fears paying her full percentage hurricane deductible twice in one season. How does Florida law address deductibles when multiple hurricanes strike in a single calendar year?

• A. The hurricane deductible operates on a calendar-year basis, so once Elena has satisfied it, later hurricane losses that year are not subject to the full hurricane deductible again
• B. The full hurricane deductible applies separately to every storm, no matter how many occur
• C. All deductibles are eliminated for the rest of the year after any named storm
• D. The second storm is simply excluded from coverage in the same year

369. Comparing two homeowners quotes for the same Vero Beach house, an applicant sees one with the $500 hurricane deductible and one with the 10 percent option, all other terms identical. Which relationship between the quotes should she expect, and why?

• A. Both premiums are identical, because deductibles never affect price
• B. The comparison is impossible, because insurers may not quote both options
• C. The 10 percent option costs more, because larger numbers always mean larger premiums
• D. The $500 deductible quote carries the higher premium, because the insurer retains more of the hurricane risk

370. After three admitted insurers decline his coastal Cedar Key homeowners application, a frustrated buyer asks his agent whether the state provides any market where he can still obtain property coverage. What entity fills this role in Florida?

• A. The Florida Insurance Guaranty Association, which writes new policies for coastal homes
• B. Citizens Property Insurance Corporation, the state-created insurer of last resort for property risks that cannot find coverage in the private market
• C. A surplus lines syndicate operated by the Department of Financial Services
• D. The federal flood insurance program, which covers all perils for declined applicants

371. An agent in Homestead is preparing to submit a client's application to Citizens Property Insurance Corporation. Broadly speaking, what must be true about the private market before a Florida homeowner is eligible for a Citizens policy?

• A. Comparable coverage must be unavailable from admitted private insurers, or available only at premiums substantially above what Citizens would charge
• B. The home must be valued above a statewide minimum price
• C. The homeowner must first be declined by a federal insurance program
• D. Nothing; any homeowner may choose Citizens as a matter of preference for its rates

372. A longtime Citizens policyholder in Spring Hill receives a letter saying a private admitted insurer has offered to assume her policy as part of a depopulation program. What is the purpose of this kind of takeout arrangement?

• A. To punish her for filing prior claims
• B. To transfer her policy to the state's general revenue fund
• C. To move risks out of the state's insurer of last resort and back into the private market, shrinking Citizens' exposure
• D. To cancel her coverage entirely and leave her uninsured

373. Midway through repairs from a kitchen fire, a Brandon homeowner learns her admitted homeowners insurer has been declared insolvent and ordered liquidated. Her covered claim remains unpaid. What mechanism exists in Florida to protect policyholders in her position?

• A. The Florida Insurance Guaranty Association steps in to pay covered claims of insolvent admitted property and casualty insurers, subject to statutory limits and conditions
• B. The governor's office pays claims directly from emergency reserves
• C. Her mortgage lender becomes legally responsible for the repairs
• D. Her claim dies with the insurer, and she must absorb the loss

374. A homeowner in Palm Coast installs hurricane shutters and documents a reinforced roof-to-wall connection on her house. When her agent reports these features to the insurer, what must happen to her residential property premium under Florida law?

• A. Her premium must increase to reflect the cost of inspecting the features
• B. Nothing, because construction features cannot influence premium
• C. She becomes ineligible for hurricane coverage because the home was modified
• D. The insurer must apply windstorm mitigation credits or discounts recognizing that the features reduce expected hurricane losses

375. A Largo homeowner insists over the phone that his house has impact glass and a hip roof, and demands the corresponding wind premium discounts immediately. His insurer declines to apply them on his word alone. How are windstorm mitigation features typically established for rating purposes in Florida?

• A. Mitigation features cannot be established after a policy is issued
• B. Through the homeowner's sworn statement over the telephone
• C. Through photographs posted publicly on social media
• D. Through a wind mitigation inspection documented on a recognized verification form submitted to the insurer

376. Shopping for coverage in Wesley Chapel, an applicant worried about Florida's ground stability asks her agent to explain how her homeowners policy treats sinkhole damage versus catastrophic ground cover collapse. Which statement captures the Florida framework?

• A. Florida policies exclude every form of earth movement with no available buyback
• B. Sinkhole coverage is automatic and catastrophic ground cover collapse must be purchased separately
• C. Catastrophic ground cover collapse coverage is included in the policy, while broader sinkhole loss coverage is an optional coverage available for an additional premium
• D. Both coverages are optional endorsements that most insurers refuse to sell

377. Over several years, hairline cracks spread slowly across the walls of a Spring Hill home as the ground beneath it gradually settles. The house remains safe and occupied. The owner, who declined optional sinkhole coverage, files a claim under his policy's catastrophic ground cover collapse coverage. Why will this claim fail?

• A. Because cracks are cosmetic and no coverage anywhere responds to them
• B. Because catastrophic ground cover collapse claims may only be filed in even-numbered years
• C. Because the coverage requires conditions such as an abrupt collapse of the ground cover, a depression visible to the naked eye, structural damage to the building, and the structure being condemned, none of which gradual settling satisfies
• D. Because ground movement claims require an eyewitness to the collapse

378. A roofing salesman canvassing a Jacksonville neighborhood after a storm urges a homeowner to sign over her insurance claim so his company can deal with the insurer directly and start work at once. Her policy was issued recently. Why should she be skeptical that this arrangement still works the way the salesman describes?

• A. Because only mortgage lenders may communicate with property insurers
• B. Because signing any document after a storm voids the underlying policy
• C. Because roof damage is never covered by homeowners insurance
• D. Because Florida reformed assignment of benefits practices, and for newer property policies insureds can no longer assign their post-loss policy benefits to repair vendors the way this pitch assumes

379. A homeowner in Titusville receives a letter from her insurer ending her coverage. Her neighbor received a different kind of letter from the same company. One policy is being terminated midterm, while the other simply will not be continued when its term expires. What distinction do these letters illustrate, and what protection accompanies both?

• A. Rescission versus subrogation, which require no notice of any kind
• B. Lapse versus surrender, which are both initiated by the policyholder
• C. Cancellation versus nonrenewal, and in both situations Florida requires advance written notice to the policyholder with the reason for the action
• D. Arbitration versus appraisal, which are methods of settling disputed claims

380. A retired teacher in Ormond Beach wants to harden her older house against hurricanes but cannot afford the upgrades alone, and asks her agent whether Florida offers any assistance. What does the My Safe Florida Home program provide?

• A. Wind mitigation inspections and grant assistance to help eligible homeowners strengthen their homes against hurricane damage
• B. Discounted flood insurance through private lenders
• C. Free replacement housing for anyone living in an older home
• D. A state-paid waiver of all hurricane deductibles

381. A consumer in Ocala wants to file a complaint about her insurance agent's conduct, while a national insurer wants permission to start selling policies in Florida. Which agencies have jurisdiction over these two matters, respectively?

• A. Both matters belong to the federal insurance bureau
• B. Both matters belong to the Office of Insurance Regulation
• C. The Office of Insurance Regulation handles the agent, and the Department of Financial Services admits the insurer
• D. The Department of Financial Services oversees agent conduct and licensing, while the Office of Insurance Regulation authorizes insurers to enter the market

382. Meridian Shore Insurance Company, newly formed to write homeowners business, wants to begin selling policies in Florida. Before it may lawfully transact insurance in the state, what must it obtain, and from whom?

• A. Nothing, because forming a corporation automatically confers insurance authority
• B. A general lines agent license from a testing vendor
• C. A letter of good standing from a national trade association
• D. A certificate of authority issued through the Office of Insurance Regulation

383. During a licensing class in Tallahassee, students are asked which official leads the Department of Financial Services and how that official attains the position. What is the correct answer?

• A. A federal insurance administrator appointed by the president
• B. The insurance commissioner, hired by the industry's largest carriers
• C. The Chief Financial Officer of Florida, a statewide elected official who serves in the Cabinet
• D. A rotating panel of county tax collectors

384. Regulators arrive at a Tampa-based insurer not to audit its investments or reserves, but to review how it treats the public: samples of claim files, complaint handling, underwriting decisions, and sales practices. What regulatory tool is being used?

• A. A shareholder proxy contest
• B. A rate hearing to set statewide premium levels
• C. A market conduct examination focused on the insurer's treatment of policyholders and claimants
• D. A criminal grand jury proceeding

385. A midsize Florida carrier deteriorates until a court orders it into liquidation. Someone must marshal its remaining assets, manage its obligations, and wind down its affairs for the benefit of policyholders and creditors. Which body serves as receiver in this process?

• A. The insurer's former board of directors
• B. A private collection agency chosen by the insurer's creditors
• C. The largest policyholder by premium volume
• D. The Department of Financial Services, acting through its rehabilitation and liquidation function

386. A consumer studying her policy documents in Fort Pierce asks her agent why guaranty associations exist at all, since regulators already monitor insurer finances. What is the essential purpose of a guaranty association in the regulatory scheme?

• A. To sell backup policies directly to consumers
• B. To serve as a safety net that pays covered claims when a member insurer becomes insolvent, despite the best efforts of solvency regulation
• C. To lend money to struggling insurers so they never fail
• D. To guarantee that insurance premiums never increase

387. A widow in Zephyrhills feels overwhelmed disputing a claim payment with her insurer and does not know where to turn for help that does not require hiring a lawyer. Within Florida's regulatory structure, which resource exists specifically to assist consumers like her?

• A. The consumer assistance function of the Department of Financial Services, which helps policyholders with questions, complaints, and mediation of disputes
• B. A private ratings agency that grades insurer finances
• C. The clerk of the federal district court
• D. The insurer's own marketing department

388. Analysts at the Office of Insurance Regulation periodically dig into a Sarasota-based carrier's reserves, investments, reinsurance program, and capital adequacy to confirm the company can pay future claims. What regulatory function does this work represent?

• A. Agent continuing education auditing
• B. Premium tax collection
• C. Solvency oversight through financial examination and monitoring of the insurer's condition
• D. Advertising review

389. A government student in Tallahassee compares the two officials at the top of Florida insurance regulation: the one leading the Department of Financial Services and the one leading the Office of Insurance Regulation. Which comparison is accurate?

• A. Both officials are appointed by the state's insurers
• B. The commissioner is elected, while the Chief Financial Officer is appointed by the legislature
• C. The Chief Financial Officer heads the department as an elected Cabinet officer, while the commissioner heading the office is appointed and answers to the Financial Services Commission composed of the governor and Cabinet
• D. Both officials are elected statewide on the same ballot line

390. Reviewing a homeowners rate filing from a Pinellas County insurer, Florida regulators apply the classic three-part standard for judging insurance rates. Under that standard, rates must not be which three things?

• A. Excessive, inadequate, or unfairly discriminatory
• B. Annual, monthly, or quarterly
• C. Competitive, profitable, or negotiable
• D. Published, advertised, or discounted

391. Two Florida property insurers submit rate changes under different procedures: Seagrape Mutual files its rates and waits for regulatory review before charging them, while Coquina Casualty begins charging its new rates and submits the filing for review afterward. What terminology describes these two paths?

• A. Both used the federal rate approval system
• B. Seagrape acted lawfully while Coquina committed a rating crime
• C. Seagrape made a file-and-use filing, while Coquina made a use-and-file filing subject to review after the rates take effect
• D. Seagrape used arbitration and Coquina used appraisal

392. During a routine inquiry, Department of Financial Services staff ask a Dunedin agency to produce documentation of transactions it handled several years earlier, including applications, premium records, and correspondence. What obligation underlies this request?

• A. Records belong exclusively to the insurer, so agencies never retain anything
• B. Agencies may destroy all records the day a policy is issued
• C. Agents must keep records of the insurance transactions they handle and make them available for department review
• D. Only electronic records are subject to regulatory inspection

393. A flyer arrives at a Milton agency promoting cut-rate commercial coverage from a company the agent has never heard of, with no indication it holds any Florida authority. Before sending any client's business to this carrier, what should the agent do first?

• A. Forward the flyer to clients and let them evaluate the company themselves
• B. Verify through the state's regulatory resources that the company is authorized or otherwise eligible to write the business in Florida
• C. Rely on the professional appearance of the flyer as evidence of legitimacy
• D. Place a small policy as a test and watch whether claims get paid

394. An agent in Port Orange placed a contractor's liability coverage with a company that turned out to have no authority to transact insurance in Florida. The company has now vanished, leaving a serious injury claim unpaid. Beyond license discipline, what financial consequence can the agent face?

• A. Reimbursement from the guaranty association for his defense costs
• B. A modest reduction in future commission rates
• C. Personal liability for the unpaid claim under the coverage he placed with the unauthorized entity
• D. None, because the contractor assumed all risk by signing the application

395. A Panhandle marina operator needs liability coverage that admitted insurers keep declining. His agent wants to move the risk to the surplus lines market right away. What must generally happen before a Florida risk may be exported to surplus lines?

• A. The insured must sign a waiver of all future claim rights
• B. The premium must be paid in cash
• C. A diligent effort must be made to place the coverage with authorized insurers in the admitted market, with the resulting declinations supporting the export
• D. The risk must first be offered to the federal government

396. Having documented that no admitted insurer will write his client's exotic animal sanctuary near Loxahatchee, a retail general lines agent prepares to bind the risk himself with an unauthorized-market carrier. What is wrong with him completing the placement alone?

• A. The client must personally travel to the insurer's home jurisdiction to sign
• B. Export to the surplus lines market must be handled through a licensed surplus lines agent, a distinct license the retail agent does not hold
• C. Nothing, since declinations authorize any licensee to access any market
• D. Exotic animal risks are uninsurable in every market

397. Comparing an admitted carrier's quote with a surplus lines quote for her Islamorada bed-and-breakfast, an owner asks what protection she gives up if her surplus lines insurer someday fails. What is the honest answer?

• A. The agent personally guarantees every surplus lines policy he sells
• B. Nothing changes, because all insurers carry identical insolvency protection
• C. Surplus lines policyholders are protected by a special federal insolvency fund
• D. Claims against insolvent surplus lines insurers are not protected by the Florida Insurance Guaranty Association, which covers insolvencies of admitted insurers

398. Three carriers write policies in Miami: Everglade Assurance was formed under Florida law, Piedmont Indemnity was formed under Georgia law, and Thames General was formed under the laws of the United Kingdom. From Florida's standpoint, how are these three insurers classified?

• A. Everglade is domestic, Piedmont is foreign, and Thames is alien
• B. All three are foreign because insurance crosses state lines
• C. Everglade is alien, Piedmont is domestic, and Thames is foreign
• D. The labels depend on where each company sells the most policies

399. Investigators uncover a ring in Opa-locka staging low-speed crashes and recruiting passengers to submit fabricated injury claims through complicit clinics. Within Florida's regulatory structure, which agency's investigative arm pursues insurance fraud schemes like this one?

• A. The investigative function of the Department of Financial Services, which probes insurance fraud for criminal referral and prosecution
• B. The Office of Insurance Regulation's actuarial unit
• C. A private arbitration panel selected by the insurers involved
• D. The guaranty association's claims department

400. Trying to reassure a hesitant prospect in Sanford, an agent says there is no reason to worry about the carrier's financial strength because a state guaranty association would pay her claims if the company ever failed. Why is this sales pitch itself a violation?

• A. Because Florida prohibits using the existence of the guaranty association as an inducement to purchase insurance
• B. Because agents may discuss insolvency only in writing
• C. Because guaranty associations may only be mentioned in Spanish-language advertising
• D. Because the statement is false, as no guaranty association exists in Florida

401. Two cousins in Pembroke Pines hold different Florida insurance licenses: Luz sells and services policies for the insurers that appointed her, while Marisol investigates losses and negotiates claim settlements. Which license does each cousin hold?

• A. Both activities are performed under a single combined license
• B. Neither activity requires a license in Florida
• C. Luz holds an agent license and Marisol holds an adjuster license
• D. Luz holds an adjuster license and Marisol holds an agent license

402. Overwhelmed by the paperwork after a fire guts her Hollywood boutique, the owner hires a licensed professional to prepare her claim, document the inventory loss, and negotiate with the insurer on her behalf in exchange for compensation. What type of licensee has she hired?

• A. A managing general agent
• B. A public adjuster, who represents the insured's interests in the claim for compensation
• C. A company adjuster employed by her insurer
• D. A title agent

403. After a hailstorm swamps a Tallahassee insurer with claims, it assigns some files to salaried employees in its claims department and contracts others out to an independent firm that adjusts losses for several different carriers. How do the adjusters in these two groups differ?

• A. The employees are company adjusters working for their insurer, while the contracted professionals are independent adjusters handling claims for insurers as outside contractors
• B. The salaried employees are public adjusters and the contractors are company adjusters
• C. Only the salaried employees need any qualification to adjust claims
• D. Both groups represent the policyholders rather than the insurer

404. A retired contractor in New Port Richey starts a sideline business inspecting storm damage, valuing losses, and negotiating settlement amounts directly with insurers for homeowners who pay him a cut of their recoveries. He holds no insurance license of any kind. What is the core legal problem?

• A. His fees are too low for the industry
• B. He is transacting the business of adjusting claims for compensation, which requires an adjuster license he does not hold
• C. Contractors are permanently barred from ever obtaining insurance licenses
• D. Negotiating with insurers is unlawful for everyone except attorneys

405. An agent in Estero who sold a homeowner her policy offers, after a pipe burst, to also represent her against the insurer as her paid claim advocate, collecting a percentage of whatever the company pays. Why does this dual arrangement offend Florida's licensing framework?

• A. Because the roles conflict: an agent acting for the insurer in the transaction cannot simultaneously serve as the insured's compensated claim representative, which is the regulated province of a public adjuster
• B. Because claim advocacy fees must always be flat amounts rather than percentages
• C. Because water losses may only be negotiated by engineers
• D. Because agents may never speak with their clients after a loss is reported

406. A compliance officer sorts four pending regulatory matters: an audit of an agent's continuing education compliance, a review of a homeowners insurer's proposed rate increase, a disciplinary hearing over an agent's premium handling, and scrutiny of an insurer's reserve adequacy. Which pairing correctly assigns these matters between Florida's two insurance regulators?

• A. The four matters are assigned by coin flip between the two agencies
• B. The Department of Financial Services handles the continuing education audit and the premium handling discipline, while the Office of Insurance Regulation handles the rate review and the reserve scrutiny
• C. The Department of Financial Services handles the rate review and reserves, while the Office of Insurance Regulation disciplines the agent
• D. The Office of Insurance Regulation handles all four matters

407. No admitted insurer will touch the liability exposure of a new zipline and aerial adventure park outside Ocala, though the operator has strong finances and a clean record. His broker explains that a legitimate market exists specifically for risks like his. What is the purpose of the surplus lines market in the insurance system?

• A. To offer the same standard policies as admitted insurers at regulated rates
• B. To eliminate underwriting by accepting every application submitted
• C. To provide a lawful home for unusual or hard-to-place risks that the admitted market declines to write
• D. To insure only government buildings

408. Beyond periodic on-site examinations, Florida regulators expect continuous visibility into every authorized insurer's financial condition. What routine obligation gives the Office of Insurance Regulation this ongoing window between examinations?

• A. Insurers must file periodic financial statements reporting their condition to regulators
• B. Insurers must broadcast their balance sheets on local television
• C. Insurers must obtain policyholder votes approving each investment
• D. No reporting exists; regulators rely entirely on rumors and complaints

409. After passing her all-lines adjuster examination, a Cutler Bay resident wonders which Florida agency will actually issue her adjuster license and oversee her conduct once she begins handling claims. What is the answer?

• A. The Office of Insurance Regulation, which licenses all insurance personnel
• B. Each insurer issues its own adjuster licenses privately
• C. The Department of Financial Services, which licenses and regulates adjusters just as it does agents
• D. The federal claims licensing board

410. Quarterly data shows a Doral-based carrier's surplus eroding and its reserves increasingly strained, though it is still paying claims on time. Rather than waiting for outright failure, what can Florida's regulatory system do at this early stage of deterioration?

• A. Immediately transfer all policies to the guaranty association
• B. Nothing until the insurer formally declares bankruptcy
• C. Intervene with enhanced supervision and corrective requirements designed to restore the insurer's condition before receivership becomes necessary
• D. Publish the insurer's customer list as a warning