Florida Insurance Licensing Practice Exam

What happens if an insured's incurred liability exceeds their policy limits in another state that required higher limits?

1. Our insured's license will be revoked since he did not comply with the other state's requirements

2. Our insured's policy will respond to the higher limit of the other state

3. Our insured's policy will pay up to its 10/20/10 limits and the insured will be responsible for any balance

4. None of the above

The correct answer is: Our insured's policy will respond to the higher limit of the other state

If the insured's incurred liability exceeds their policy limits in another state that requires higher limits, the insured's policy will respond to the higher limit of that state. Option A is incorrect because revocation of license is not directly related to exceeding policy limits. Option C is incorrect because the insured's policy will not only pay up to its 10/20/10 limits, but also the higher limit required by the other state. Option D is also incorrect because the insured's policy will still respond to the higher limit, even though it may not specifically be mentioned in the options.