Florida Insurance Licensing Practice Exam

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If an insured sells his car to another person, the buyer may be prohibited from also receiving the insured's policy. This is because the insurance contract is a contract of:

  1. Personal nature

  2. Adhesion

  3. Legal purpose

  4. Indemnity

The correct answer is: Personal nature

A Personal nature B: Adhesion --> This is incorrect because adhesion refers to contracts that are drafted by one party and accepted by the other, without any room for negotiation or change. This is not applicable to insurance contracts as they are subject to state and federal regulations that often require certain provisions to be included. C: Legal purpose --> This is incorrect because an insurance contract serves a legal purpose, which is to provide financial protection in the event of a covered loss. However, this does not explain why the buyer would be prohibited from receiving the policy. D: Indemnity --> This is incorrect because indemnity refers to the principle of insuring against loss or damage and restoring the insured to the same financial position they were in before the loss. This does not explain why the buyer would be prohibited from receiving the policy. A Personal nature contract means that the

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