Florida Insurance Claims Adjuster License Practice Exam

What limits the geographical coverage of an insurance policy?

1. Policy territory

2. Binder clause

3. Subrogation rights

4. Appraisal documents

The correct answer is: Policy territory

A is the correct answer because the policy territory refers to the specific geographic area where the insurance policy is valid and will provide coverage. This means that any incidents or claims outside of the designated policy territory will not be covered by the insurance. Option B, binder clause, refers to a temporary written or oral agreement that provides coverage until a formal insurance policy is issued. Option C, subrogation rights, refers to the insurance company's right to pursue reimbursement from a third party for any losses paid out to the insured. Option D, appraisal documents, refers to the process of determining the value or extent of damage or loss in order to settle an insurance claim. None of these options directly limit the geographical coverage of an insurance policy, making A the correct answer.