Worksheetschapter 9
Total questions: 25
Worksheet time: 13mins
To establish the association's legal requirements in purchasing insurance, the association should consult all of the following, EXCEPT:
Enabling statutes, such as the Condominium Act
Lenders who directly or indirectly affect the insurance market
A professional insurance consultant with expertise in the reinsurance market
The association documents
According to the business judgment rule, how should directors and officers perform their duties?
Perform their duties as they see fit, based upon input from family and friends
Attend a CAM pre-licensure course
Perform their duties in a manner that they reasonably believe to be in the best interest of the association
Always select the highest bidder on a contract, because it is likely to best serve the association
Which of the following is NOT true about self-insurance?
It is a risk management method in which a calculated amount of money is set aside for a potential future loss.
The association may assess members to obtain the necessary funds.
It may be funded through a line of credit with a financial institution.
It is a risk management method that requires the purchase of insurance from an insurance company.
Which statement is CORRECT about reinsurance?
It enables a primary insurer to transfer part of the risk of insuring a property to other insurers.
It is a form of windstorm self-insurance that is funded entirely by three or more associations.
It must be provided by an excess lines insurer.
It is illegal in the state of Florida.
An association may apply to the OIR to form a self-insurance fund for windstorm insurance with at least two other residential associations if all of the following criteria are met, EXCEPT:
The associations operate more than 50 units.
The type of insurance is limited to property or casualty risk, general liability, or surety insurance.
The coverage is sufficient to cover the probable loss of a 250-year windstorm event.
The associations were created under F.S. 718, 719, 720, or 721.
All of the following are presumed to be true about directors and officers under the business judgment rule, EXCEPT:
They know the requirements of their positions.
They know the association documents and applicable laws.
They know when to defer policy decisions to a CAM, attorney, accountant, or other person who has been trained to understand statutory responsibilities.
They spend sufficient time to properly carry out their responsibilities, pursuant to the association documents and governing law.
Which of the following is NOT true about sinkhole and catastrophic ground cover collapse coverage?
All insurers must provide coverage if requested by the insured.
In most policies, structural damage is defined as damage affecting foundations or buildings.
Renewal policies include coverage to the foundations and sidewalks in addition to the driveway and the building.
The insured does not have to pay damages under a catastrophic ground cover collapse insurance policy unless the structure is condemned.
Filing a fraudulent insurance claim is what type of violation?
A first-degree misdemeanor
A second-degree felony
A third-degree felony
A second-degree misdemeanor
Which statement best describes Citizens Property Insurance Corporation?
It is a not-for-profit entity created by the Florida Community Association Coalition.
It is a not-for-profit government entity, created to provide insurance to individuals and entities that are unable to find insurance in the private sector.
It is a catastrophe fund that assesses private insurers to cover unfunded liabilities.
It offers discounts to associations for hurricane protection, based upon a questionnaire completed by the manager.
Which of the following is NOT true about Citizens Property Insurance Corporation?
Its legislative purpose is to provide property insurance to persons and entities, including community associations, at a lesser cost than the private insurance market.
It offers commercial residential multiperil policies to existing policyholders.
It offers commercial residential windstorm only policies to new policyholders.
It offers commercial residential policies excluding wind to new policyholders.
Certain insurance policies are required to include a notice regarding law and ordinance coverage. Pursuant to statute, these policies must include specific language in which font?
16-point Arial, bold type
1-point Times Roman, bold type
18-point, bold type
20-point, bold type
F.S. 718 requires condominium members to insure all of the following items in their own units, EXCEPT:
Water heaters and water filters
All floor, wall, and ceiling coverings
Built-in cabinets and countertops unless they were initially installed by the developer
Appliances and electrical fixtures
The Cooperative Act has which of the following insurance requirements for associations?
To obtain flood, windstorm, and liability insurance, based upon an appraisal performed by a licensed appraiser within the past 36 months
To use its best efforts to obtain and maintain adequate insurance to protect the association property
To purchase D&O insurance if required by the documents
To participate in self-insurance pools, without a vote of 2/3rds TVI
F.S. 627.70131(1) provides certain timeframes that an insurer must meet. Upon the receipt of a claim, what do these include?
The insurer must, within 30 days, review and acknowledge receipt of the claim, unless the insurer has already paid the claim, or the insurer cannot pay the claim due to conditions beyond its control.
Within 10 calendar days after an insurer begins investigation, the insurer must provide progress reports.
When conditions beyond its control do not exist, within 90 days of receiving notice of a claim, the insurer must either pay the claim or deny the claim.
Claims which are not paid within 60 days after the insurer receives notice must bear interest at a rate established by the OIR.
Dexter Garcia, President of Misty Rivers Condominium, is angry because the association’s property insurer, Payless Insurers, failed to pay a claim of $250,000 in damages for a broken pipe in Unit 455. Payless has failed to respond to any calls or letters for the past six months. What is Dexter’s best option?
File a lawsuit in the circuit court.
File a claim with the OIR, requesting payment from the Catastrophe & Major Damages Insurance Fund (CMIDF).
Contact the OIR and request that it direct Payless to participate in a mediation claims settlement conference.
Dexter has none. Insurers have up to a year to pay claims for water damage.
Which of the following does F.S. 720 require an HOA to do?
Use its best efforts to obtain and maintain adequate insurance to protect the association property
Nothing. The HOA Act is silent. Case law suggests that HOAs should follow the requirements of the Condominium Act.
Obtain a Directors and Officers policy
Determine the amount of its deductible at a properly noticed and quorumed board meeting
Condominium associations are required to insure all of the following, EXCEPT:
All portions of the condominium property located outside of the units
Condominium property located inside the units, as such property was initially installed, or replacements of like kind and quality, and in accordance with the original plans and specifications, or, if the original plans and specifications are not available, as they existed at the time the unit was initially conveyed
All portions of the condominium property for which the bylaws require coverage by the association
All alterations and additions that have been made to the condominium property pursuant to F.S. 718.113(2)
Hurricane Esther damaged several units in the Everly Hills Estates Condominium. As the manager inspected the property, they observed that a fallen tree planted behind unit 403 had crushed the air conditioner serving unit 401. What should the manager do?
Express sympathy to the member for the misfortune they experienced
File a claim against unit 403’s insurance carrier
Take a picture and ensure that a claim is filed with the association’s insurer
Advise the member to file a claim with their insurer because casualty damage to an exterior A/C component is always the member’s responsibility
A member of a condominium is responsible for the costs of repair or reconstruction of the condominium property if insurance does not cover the costs and the damage was caused by which of the following?
The member's unintentional conduct
Negligence of the association
Failure of the member to comply with the terms of the articles of incorporation
Intentional conduct by the member
Which statement is CORRECT about an individual condominium in a multi-condominium complex that has not consolidated its financial operations?
It must participate in the multi-condominium insurance policy.
It may opt out of the multi-condominium insurance policy and purchase its own policy.
It may opt out of the multi-condominium insurance policy and purchase its own policy, by a vote of a majority TVI.
It may opt out of the multi-condominium insurance policy and purchase its own policy, by a vote of 2/3rds TVI.
According to the Condominium Act, in what period is the association required to provide a certificate of insurance to a member?
15 days
30 days
10 working days
7 working days
A timeshare managing entity must use due diligence to obtain which of the following?
Property insurance that will be charged separately to the timeshare members
Casualty insurance, as a common expense, to protect the timeshare property against all reasonably foreseeable perils
All insurance as may be required by F.S. 718
The managing entity is not required to obtain insurance for the timeshare property
Which statement is CORRECT about the Homeowner Claims Bill of Rights?
It is required to be provided to residential property policyholders by the insurer within 21 days after receiving an initial communication with respect to a claim.
It is a summary of existing Florida laws in simple, non-technical terms, regarding the rights of a personal lines residential property insurance policyholder who files a claim of loss.
It can serve as the basis for a civil cause of action by any individual policyholder against an insurer.
It includes all of a policyholder's rights under Florida law.
Which state agency has primary responsibility for regulation, compliance, and enforcement of insurance related Florida statutes?
Department of Insurance (DOI)
Office of Insurance Regulation (OIR)
Division of Insurance Code Enforcement (DICE)
Bureau of Insurance Compliance (BIC)
A claim for extensive mold mitigation and repairs on a perimeter wall of unit 1121 was recently denied by the condominium’s insurance carrier. The declaration identifies the perimeter walls as association property. The owners, who reside in the unit, were aware of the problem, but did not report it to the association. According to F.S. 718, who is responsible for paying for the repairs?
Since the unit’s perimeter walls belong to the association, the repair costs must be borne by the association.
The owners of unit 1121 reside in their unit and should have reported the mold to the association before it became an extensive problem. Therefore, the owners are responsible for the costs of the repairs.
The association and the owners are both responsible and should split the cost of mitigation and repairs.
The owners should file a claim with their insurer. Any deductible should be split between the owners and the association.
