Florida Insurance Licensing Practice Exam 2026 - Free Insurance Licensing Practice Questions and Study Guide

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.