FL Property & Casualty common mistakes
FL Property & Casualty · Understand the traps and how to avoid them.
On a coinsurance (insurance-to-value) question, the candidate answers with 80% of the loss, or with the full loss less the deductible, instead of computing (limit carried ÷ required limit) × loss − deductible. A close variant: applying a coinsurance penalty to a policy that has no coinsurance clause at all, such as a homeowners form.
The candidate memorised the phrase "80% coinsurance" as a number of the loss rather than as a ratio the insured must satisfy at the time of loss, so the formula never gets built. Homeowners forms look like commercial forms on the page, so the candidate assumes the same penalty mechanic applies.
What to do instead
Before computing, write three figures on scratch paper: limit carried, value × coinsurance percentage (required limit), and the loss. If carried ≥ required, pay loss − deductible. If carried < required, pay (carried ÷ required) × loss − deductible. Also confirm the form is a commercial property form with a coinsurance condition before applying any penalty.
The candidate treats vacancy and unoccupancy as interchangeable, and answers that a building left empty for two months still has full coverage for vandalism, glass breakage, or sprinkler leakage. Related error: assuming homeowners coverage continues indefinitely while the dwelling is vacant.
Both words describe an empty building in everyday English, and both trigger reduced coverage, so the candidate collapses them into one concept and never learns that vacancy means no people and no furnishings while unoccupancy means no people but furniture in place.
What to do instead
Learn the pair as a contrast: vacant = empty of people AND property, triggering the harshest restrictions and a short fuse (typically around 60 days) before coverage for vandalism, glass breakage, and sprinkler leakage stops; unoccupied = furniture in place, only the standard conditions apply. Then drill questions by asking "is there personal property inside?" first.
The candidate reads a liability policy question and applies the wrong trigger - treating a claims-made policy as if a loss occurring during the policy period is covered no matter when reported, or assuming the extended reporting period restores a full aggregate limit of new coverage.
Occurrence and claims-made are introduced close together in the liability material, and the candidate holds on to "the date of the accident" as the universal rule because it works for almost every other line on the exam.
What to do instead
For every liability item, first name the trigger out loud: occurrence = injury or damage date; claims-made = claim date within the policy period or an extended reporting period. Then ask whether the act happened after any retroactive date. For the extended reporting period, state that it extends the time to report the same acts only and adds no new limit for new acts.
Given a multi-claimant auto or general liability scenario, the candidate multiplies the per-person limit by the number of injured people and ignores the per-occurrence cap, or treats combined single limit as if it also had separate per-person and per-occurrence buckets.
Split limits are written as three numbers in a fixed order, and under time pressure the candidate grabs the first number as the answer for one person and then scales it up for the group without checking the second number.
What to do instead
Rewrite every limit in words before answering: "each person / each occurrence / property damage." Then run the claim through the buckets: per-person limit caps each individual, per-occurrence caps the total, and the property damage figure is separate. For a combined single limit, note that one number covers everything per occurrence with no sub-limit, so a single badly injured claimant can exhaust the whole limit.
Asked to classify something as a peril or a hazard, the candidate labels arson, fraud, or an indifferent attitude toward loss as physical hazards, or labels icy steps or oily rags as perils. A second form: picking "speculative risk" when the question describes an insurable pure risk.
The words are used loosely in ordinary speech, and the textbook definitions are learned as isolated sentences without an operational test, so under exam pressure the candidate sorts by gut feel about whether the thing sounds dangerous.
What to do instead
Use one test on every item: a peril is the cause of loss (fire, windstorm, theft, collision); a hazard is a condition or behaviour that increases the chance or severity of loss and comes in three flavours - physical (the condition itself), moral (dishonesty such as staging a loss), morale (carelessness because insurance exists). If the item can appear in a "cause of loss" list on a policy, it is a peril.
The candidate assumes any licensed driver who borrows the car is automatically an insured with the same coverage, and separately assumes a newly acquired vehicle is covered for an unlimited period, or is covered for collision without the insured asking the insurer to add it.
Permissive use, resident relatives, and newly acquired autos are taught in a single block, so the candidate blends them and remembers one broad rule ("borrowers are covered") that erases the distinctions the exam tests.
What to do instead
Build a two-column chart: WHO is an insured versus WHAT is a covered auto. For who, remember named insured and resident relatives for the owned auto, plus any person using the vehicle with permission - but note that a person using a vehicle they own is not covered as a permissive user. For what, remember a newly acquired private passenger auto generally gets broad coverage for a short window (commonly around 14 days) while a replacement auto gets the same coverage as the vehicle it replaced, and additional collision or other-than-collision coverage must be requested within that window.
On Florida personal auto questions the candidate answers with generic no-fault assumptions: an unlimited or very large medical limit, coverage for a claim reported months after the crash, or full $10,000 available for a non-emergency condition without exhausting the $2,500 portion.
The candidate learns no-fault as an idea rather than as the Florida personal injury protection statute, so the specific dollar split, the reporting deadline, and the emergency-versus-non-emergency distinction get flattened into a single vague memory.
What to do instead
Memorise the Florida PIP mechanics as a checklist: $10,000 per person per accident; a requirement to seek initial medical services within 14 days of the crash or the claim is barred; a $2,500 sub-limit for non-emergency-related conditions, with the full $10,000 available only where an emergency-related condition is diagnosed; a portion available for lost income and a portion for death benefits; deductible options elected by the named insured; and coverage that follows the insured as a pedestrian or passenger in someone else's vehicle.
On a commercial general liability question the candidate uses the per-occurrence limit to answer a products-completed operations claim, ignores the separate general aggregate, or applies Coverage B personal and advertising injury to a bodily injury claim and Coverage C medical payments to a claim involving ongoing operations and ongoing injury.
The CGL declarations page shows several similar-looking limits and the candidate treats them as one shared pot, while the three coverage parts (A bodily injury/property damage, B personal and advertising injury, C medical payments) are memorised as three names without their scope boundaries.
What to do instead
Draw the CGL as three labelled boxes with their own trigger language and limits. Then link each limit to its box: Coverage A per occurrence, with the general aggregate applying to all Coverage A claims except products-completed operations, which has its own separate aggregate; Coverage B a per-person/per-organization limit with a separate aggregate that it shares or exceeds depending on endorsement; Coverage C a small per-person limit that pays regardless of fault and only for injuries on the premises or arising from operations.
The candidate answers a loss-of-income question with extra expense, or with the full lost revenue for the outage, without applying the period of restoration, the waiting period, or the requirement that the income loss flow from direct physical damage to covered property.
Business income and extra expense both respond to the same event and both pay money to keep the business alive, so the candidate picks whichever one seems larger or more familiar instead of matching the payment to the purpose.
What to do instead
Anchor each term to a one-line purpose: business income replaces net income plus continuing normal operating expenses during the period of restoration; extra expense pays the costs to avoid or shorten the shutdown and is not reduced by saved expenses. Then check three gates before any calculation: was there direct physical damage to covered property at covered premises, when does the period of restoration begin and end, and does a waiting period apply? Also confirm whether the insured chose business income with extra expense or with the agreed value option.
The candidate applies federal or general industry habits to Florida items: assuming a hurricane deductible is a flat dollar amount rather than a percentage of the dwelling limit, guessing at cancellation and nonrenewal notice periods, or using an invented number for continuing education hours or for the deadline to submit a civil remedy notice against an insurer.
Florida-specific numbers do not follow from principles, so they can only be memorised, and candidates often study them last or skip them because the conceptual material feels more productive.
What to do instead
Maintain a single Florida-numbers sheet and rebuild it by hand weekly: hurricane deductible options for personal residential risks ($500 or 2%, 5%, or 10% of the dwelling limit, with the percentage applied to the dwelling limit, not the loss); cancellation notice periods (short notice for nonpayment of premium, longer notice for other permitted reasons, with cancellation restricted once the policy has been in force for the statutory period); nonrenewal notice; advance notice of a premium increase on personal lines renewal; biennial continuing education hours including the required law-update and ethics hours; and the 60-day window to file a civil remedy notice with the Department before suing an insurer for a claims-handling violation.