Florida 6-20 All-Lines Adjuster Practice Test: Florida law, Part 4

Correct answer: D. An apprentice holds an all-lines license, files a $50,000 bond, and may not execute contracts

Under s. 626.8651, F.S., a public adjuster apprentice is an all-lines (6-20) licensee appointed by a public adjusting firm who files a $50,000 surety bond. The apprentice has the employing public adjuster's authority, except that an apprentice may not execute contracts for public adjuster services. A firm may have no more than four apprentices at once, but each supervising public adjuster may be responsible for only one.

Reference: s. 626.8651, F.S., Public adjuster apprentice appointment; qualifications

Correct answer: C. $22,000

The hurricane deductible is 5% x $400,000 = $20,000 and applies on a calendar-year basis. The August loss used $12,000 of it, leaving $8,000. For a later hurricane in the same year, s. 627.701(5)(a)3., F.S., lets the insurer apply the greater of the remaining hurricane deductible ($8,000) or the all-other-perils deductible ($2,500). The October payment is $30,000 - $8,000 = $22,000.

Reference: s. 627.701(5)(a), F.S., Liability of insureds; coinsurance; deductibles

Correct answer: A. From a hurricane warning for any part of Florida until 72 hours after the last watch or warning ends

Section 627.4025(2)(c), F.S., defines the hurricane period as beginning when the National Hurricane Center issues a hurricane warning for any part of Florida and ending 72 hours after termination of the last hurricane watch or warning for any part of Florida. Before chapter 2023-130, the period began with a watch or a warning, which is why many older study guides still say watch.

Reference: s. 627.4025(2)(c), F.S.; ch. 2023-130, Laws of Florida

Correct answer: A. $7,000

Section 627.701(10)(a), F.S., caps a roof deductible at the lesser of 2% of Coverage A or 50% of the cost to replace the roof. Two percent of $500,000 is $10,000, and 50% of $14,000 is $7,000, so the cap is $7,000. The roof deductible applies only to claims adjusted on a replacement cost basis, and when it applies no other deductible may be applied to that loss.

Reference: s. 627.701(10)(a), F.S.

Correct answer: C. It does not apply, because the tree fall punctured the roof deck

Section 627.701(10)(a)5., F.S., says a roof deductible does not apply to a total loss under the valued policy law, a roof loss from a hurricane, a roof loss from a tree fall or other hazard that damages the roof and punctures the roof deck, or a loss requiring repair of less than 50% of the roof. The roof deductible therefore does not apply to the Brennans' loss.

Reference: s. 627.701(10)(a)5., F.S.

Correct answer: B. It is void, invalid, and unenforceable

Section 627.7152(13), F.S., added by SB 2-A in December 2022, prohibits assigning any post-loss benefit under a residential or commercial property policy issued on or after January 1, 2023, and makes any attempted assignment void, invalid, and unenforceable. The 14-day rescission right, the 3-business-day copy requirement, and the emergency services cap belonged to the earlier assignment rules for older policies.

Reference: s. 627.7152(13), F.S.; ch. 2022-271, Laws of Florida

Correct answer: C. A government entity of the state, not a private insurer

Section 627.351(6)(a)1., F.S., states that Citizens is a government entity that is an integral part of the state and is not a private insurance company. It insures residential and commercial property for applicants who are entitled to coverage but cannot obtain it in the voluntary market. Florida's other residual markets include FAJUA for auto and FWCJUA for workers compensation.

Reference: s. 627.351(6)(a), F.S., Citizens Property Insurance Corporation

Correct answer: D. No, because the private premium is not more than 20% above Citizens' premium

For a new primary-residence applicant offered comparable coverage by an authorized insurer, s. 627.351(6)(c)5.a., F.S., makes the risk ineligible for Citizens unless the private premium is more than 20% greater than Citizens' premium. The $500 difference is about 16.7% of $3,000, so he is ineligible. A private offer above $3,600 would have made him eligible.

Reference: s. 627.351(6)(c)5.a., F.S.

Correct answer: A. $300,000 per claim, plus $200,000 more for structure and contents

Section 631.57(1)(a)2., F.S., obligates FIGA for the portion of each covered claim below $300,000, and homeowners policies get an additional $200,000 for the part of a covered claim relating only to damage to the structure and contents. Condominium and homeowners association policies have a separate limit based on $200,000 times the number of units. FIGA is never liable for penalties or interest.

Reference: s. 631.57(1)(a)-(b), F.S., Powers and duties of the association

Correct answer: B. No, because the claim arose more than 30 days after insolvency

Under s. 631.57(1)(a)1., F.S., FIGA is obligated for covered claims existing before the insolvency adjudication and those arising within 30 days after the determination of insolvency, or before the policy expires or is replaced if either happens sooner. A July 15 loss is 44 days after June 1, so FIGA does not owe it. Policyholders of an insolvent insurer should replace their coverage promptly.

Reference: s. 631.57(1)(a)1., F.S.

Correct answer: C. $10,000 for medical and disability, plus a $5,000 death benefit

Section 627.736(1), F.S., requires PIP of $10,000 for medical and disability benefits and $5,000 in death benefits. Medical benefits pay 80% of reasonable expenses if initial care is received within 14 days after the accident, and disability benefits pay 60% of lost gross income. PIP covers the named insured, resident relatives, operators, passengers, and pedestrians struck by the vehicle.

Reference: s. 627.736(1), F.S., Required personal injury protection benefits

Correct answer: A. $2,500

PIP medical benefits normally pay 80% of reasonable expenses ($6,400 of $8,000), but s. 627.736(1)(a)4., F.S., limits reimbursement to $2,500 when a qualified provider determines the injured person did not have an emergency medical condition. The full $10,000 is available only when a physician, dentist, physician assistant, or APRN determines an emergency medical condition existed. She met the 14-day initial treatment rule.

Reference: s. 627.736(1)(a)3.-4., F.S.

Correct answer: A. No deductible applies to the windshield damage

Section 627.7288, F.S., provides that the deductible provisions of any Florida auto policy providing comprehensive coverage do not apply to damage to the windshield of a covered vehicle, so the insurer pays the windshield claim without subtracting the $500. Glass breakage from a flying rock is a comprehensive (other than collision) loss, so the collision deductible is not involved.

Reference: s. 627.7288, F.S., Comprehensive coverage; deductible not to apply to motor vehicle glass

Correct answer: D. 25 days

Section 440.12(1), F.S., allows no compensation for the first 7 days of disability, though medical benefits are still provided. If the injury causes more than 21 days of disability, compensation is allowed from the start of the disability. Twenty-five days exceeds 21, so all 25 days are payable. Had he returned after 15 days, only days 8 through 15 would have been paid.

Reference: s. 440.12(1), F.S., Time for commencement and limits on weekly rate of compensation

Correct answer: D. 120 days

Section 440.20(4), F.S., lets a carrier that is uncertain of its obligation pay and investigate, but it must give the employee written notice of that election and admit or deny compensability within 120 days after the initial provision of benefits. A carrier that fails to deny within 120 days waives the right to deny compensability unless it later finds material facts it could not have discovered with reasonable investigation.

Reference: s. 440.20(4), F.S., Time for payment of compensation

Correct answer: B. 10 business days

Section 627.70152(3)(a), F.S., makes a written notice of intent to initiate litigation, filed with DFS on its form, a condition precedent to suit. It must be given at least 10 business days before filing suit and may not be given before the insurer has made a coverage determination under s. 627.70131. DFS forwards the notice to the insurer's designated email address. The 60-day period belongs to the separate civil remedy notice.

Reference: s. 627.70152(3)(a), F.S., Suits arising under a property insurance policy

Correct answer: D. 14 business days after its response asserting that right

After a denial, s. 627.70152(4)(a), F.S., requires the insurer to respond within 10 business days by accepting coverage, continuing to deny, or asserting the right to reinspect. If it asserts reinspection, it has 14 business days after that response to reinspect and then accept or continue to deny, and the s. 95.11 suit deadline is tolled during reinspection if it would otherwise expire. A continued denial lets the claimant sue without further notice.

Reference: s. 627.70152(4)(a), F.S.

Correct answer: A. Dismiss the suit without prejudice

Section 627.70152(5), F.S., requires the court to dismiss without prejudice any suit filed without the required notice of intent, or filed before the insurer's response periods in subsection (4) have run. Without prejudice means the claimant may refile after complying. Under subsection (6), the notice and its supporting documents are not admissible as evidence in any proceeding.

Reference: s. 627.70152(5)-(6), F.S.

Correct answer: D. Yes, homes of $400,000 or more need flood coverage from January 1, 2026

Section 627.351(6)(aa), F.S., phases in a flood requirement for Citizens personal lines policies that include wind. Outside special flood hazard areas, flood coverage is required for policies effective on or after January 1, 2024 ($600,000 or more in dwelling replacement cost), January 1, 2025 ($500,000 or more), January 1, 2026 ($400,000 or more), and January 1, 2027 (all others). Homes inside special flood hazard areas were phased in during 2023.

Reference: s. 627.351(6)(aa)1.-2., F.S.

Correct answer: A. A condominium unit owner insured under Citizens' unit owners form

Under s. 627.351(6)(aa)3., F.S., the flood requirement does not apply to Citizens policies that exclude the peril of wind or to policies written on a condominium unit owners form. Wind-covered homes in special flood hazard areas have needed flood coverage since 2023, homes valued at $600,000 or more since January 1, 2024, and all remaining personal lines residential risks from January 1, 2027. The flood policy must at least match NFIP dwelling coverage.

Reference: s. 627.351(6)(aa)3., F.S.

Correct answer: D. Employers required to carry workers compensation who cannot obtain it voluntarily

Section 627.311(5)(a), F.S., establishes FWCJUA as a nonprofit joint underwriting plan that provides workers compensation and employer's liability insurance to applicants required by law to carry it who are in good faith entitled to, but unable to procure, coverage in the voluntary market. Its rates must be actuarially sound so the plan is self-supporting. FAJUA serves auto risks, and Citizens serves property risks.

Reference: s. 627.311(5)(a), F.S., Joint underwriters and joint reinsurers

Correct answer: A. Designated insurers issue policies and service claims for all insurers

FAJUA is created under an OIR-approved joint underwriting plan for applicants who are in good faith entitled to, but unable to procure, auto insurance in the voluntary market at standard rates. Under s. 627.311(3), F.S., designated insurers issue policies and provide policyholder and claims service on behalf of all insurers, and losses and expenses are apportioned equitably among the insurers in the plan.

Reference: s. 627.311(3), F.S.

Correct answer: A. $0

HB 837 (ch. 2023-15) changed Florida from pure to modified comparative negligence. Under s. 768.81(6), F.S., a party found greater than 50% at fault for his or her own harm may not recover any damages, except in medical negligence cases. At 55% fault, Harold recovers nothing. Under the old pure comparative rule he would have recovered 45% of $60,000, or $27,000.

Reference: s. 768.81(6), F.S.; ch. 2023-15, Laws of Florida

Correct answer: C. $40,000

Section 768.81(6), F.S., bars recovery only when a party is greater than 50% at fault for his or her own harm. At exactly 50%, Ines is not barred, and her damages are reduced by her share of fault under the comparative fault rules: 50% of $80,000 is $40,000. Had the jury found her 51% at fault, she would have recovered nothing.

Reference: s. 768.81(6), F.S.

Correct answer: B. 2 years

HB 837 (ch. 2023-15, approved March 24, 2023) moved actions founded on negligence into the 2-year category of s. 95.11(5)(a), F.S., for causes of action accruing after its effective date; the prior limit was 4 years. Liability adjusters should track this deadline. The s. 627.70132 notice rules for property claims do not change the s. 95.11 lawsuit limits.

Reference: s. 95.11(5)(a), F.S.; ch. 2023-15, Laws of Florida