FLORIDA INSURANCE
CLAIMS ADJUSTER
PRACTICE EXAM
COMPLETE
Question 1: An insurer issues a property policy after receiving the applicant's
premium. In contract terminology, the premium is primarily the insured's:
Choices:
1) Indemnity 2) Subrogation right 3) Consideration 4) Representation
Correct Answer: Consideration
Explanation: Consideration is the value exchanged to support a contract. The insured's premium and the insurer's promise to provide covered protection are the consideration exchanged.Page 1
Question 2: A policy provision is ambiguous, and the insurer drafted the wording.Which contract characteristic most strongly supports interpreting the ambiguity against the insurer?
Choices:
1) Contract of adhesion 2) Aleatory contract 3) Valued contract 4) Unilateral waiver
Correct Answer: Contract of adhesion
Explanation: Insurance policies are generally contracts of adhesion because the insurer drafts the standard wording. Genuine ambiguities are generally construed against the drafter.
Question 3: Why is an insurance contract described as aleatory?
Choices:
1) Only the insured makes an enforceable promise 2) Performance depends on an uncertain event and the values exchanged may be unequal 3) Both parties must exchange equal dollar values 4) Either party may cancel without conditions Correct Answer: Performance depends on an uncertain event and the values exchanged may be unequal Explanation: An aleatory contract involves an uncertain event. The premium paid and the amount an insurer may ultimately pay are not necessarily equal.Page 2
Question 4: A homeowner sells a house and, after the sale closes, a �re damages the house. Under ordinary property-insurance principles, why would the former owner generally be unable to collect for the post-sale damage?
Choices:
1) Subrogation bars all claims after title changes 2) Fire is never a covered cause of loss after a sale 3) The former owner no longer has an insurable interest in the property 4) The policy automatically becomes liability insurance Correct Answer: The former owner no longer has an insurable interest in the property Explanation: Property insurance generally requires the insured to have an insurable interest at the time of loss. After conveying the house, the former owner ordinarily no longer has the required �nancial interest in it.
Question 5: Which statement best describes the principle of indemnity?
Choices:
1) The insured should pro�t from a covered loss 2) The insurer must replace every damaged item with a new one 3) The insurer may ignore policy limits when damages are severe 4) Insurance should restore the insured �nancially without creating a gain from the loss Correct Answer: Insurance should restore the insured �nancially without creating a gain from the loss Explanation: Indemnity is intended to place the insured, as nearly as policy terms permit, in the �nancial position occupied before the loss without allowing a pro�t.Page 3