Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Florida Law and EthicsEasy
A Florida 2-20 General Lines Agent is explaining the purpose of the Florida Automobile Joint Underwriting Association (FAJUA) to a new client who has been declined coverage by several standard carriers due to a poor driving record. The agent accurately describes FAJUA as an entity created to provide which of the following?
- AAuto insurance for individuals who are uninsurable in the voluntary market.
- BA state-funded program to subsidize auto insurance premiums for low-income drivers.
- CA mechanism for resolving disputes between auto insurers and policyholders.
- DReimbursement to insurers for catastrophic automobile accident losses.
Show answer & explanationAnswer & explanation
Correct answer: A. Auto insurance for individuals who are uninsurable in the voluntary market.
The Florida Automobile Joint Underwriting Association (FAJUA) serves as an 'insurer of last resort' for individuals who are unable to obtain automobile insurance in the voluntary market due to their driving record or other factors. It ensures that all eligible drivers have access to basic auto liability coverage.
Why the other options are wrong
- B. FAJUA is not a subsidy program for low-income drivers.
- C. This describes a dispute resolution mechanism, not FAJUA.
- D. This describes a catastrophe fund, not FAJUA.
Florida Automobile Joint Underwriting Association (FAJUA)
An 'insurer of last resort' providing auto insurance to eligible applicants who cannot obtain coverage in the voluntary market.
- Ensures availability of auto insurance
- For high-risk drivers
- All licensed auto insurers in Florida participate
Memory trick: FAJUA Fixes Auto Jeopardy for Uninsurables.