Florida Insurance Licensing Practice Exam

An Insurance Policy is a contract with all the following characteristics, EXCEPT:

1. It is a personal contract

2. Parties are of unequal power with ambiguities or unclear wording resolved in favor of the insured because it is a contract of adhesion

3. Indemnity is not part of an insurance contract

4. There are conditions imposed on both the insurer and insured

The correct answer is: Indemnity is not part of an insurance contract

An insurance policy is a contract that provides financial protection against potential losses or damages, and it is governed by certain characteristics. These include being a personal contract between the insurer and the insured (A), where both parties have equal power and any ambiguities or unclear wording are resolved in favor of the insured (B). Additionally, an insurance policy is a contract of indemnity, meaning that the insured will be compensated for actual losses suffered (D). Therefore, the only characteristic that is not a part of an insurance policy is C, since indemnity is a key aspect of such contracts.