State Farm Certification Farm Property And Casualty Questions
and Correct Answers Graded A+ 2025/2026 Update
Duties of the insured - 1. Pay the premium
2. Take all reasonable means to save and protect the property from loss
3. Give the insurance company immediate notice of loss
4. Give the insurance company proof of loss within 60 days of the loss
5. Separate the damaged property from the undamaged property and allow the insurance company
to inspect the undamaged property as well as the insured's books and records
6. The insured cannot sue the insurance company unless all of these requirements have been
satisfied and then he/she must sue within 12 months of the loss
Duties of the insurance company - 1. Must indemnify the insured within 60 days of proof
of loss
2. May either pay the appraised acv of the loss or repair or replace the damaged property
3. If the insured and insurance company disagree as the acv of the loss and the damaged property
cannot be repaired or replaced, they each can select an appraiser. If the appraisers disagree, they
select an umpire appraiser who will make the final determination
The subrogation clause - states that the insurance company can require the insured to assign
(transfer) to it any legal rights which the insured has against third parties to the insurance company
at the time of loss
Assignment clause - 1. Transfer of a policy to another person
2. Assignment clause of property insurance policy says no assignment of the policy is valid unless
signed by an officer of the insurance company
The other insurance clause - states that the insurance company can either prohibit other
insurance or can limit the amount of other insurance by adding an endorsement to the policy
, Pro rata liability clause - 1. Applies when there are concurrent policies. Concurrent
insurance is when 2 or more policies cover the same property. It is sometimes done when insuring
high value property. The policies should be identical in all respects except face amounts
2. Says that no insurance company shall be responsible for any more than its pro rata share of the
loss
Mortgagee rights - -if a mortgagee (lender) is named on the declarations page, it acquires 3
rights in the policy:
1. 10 days notice of cancellation
2. To have the loss paid to the mortgagee
3. To provide proof of loss should the insured fail to
Salvage - -salvage is when an insurance company pays a claim, and then the insurance
company has the right to assume ownership of the damaged property to repair it and sell it to
recover part or all of the loss
-salvage value is the amount for which the insurance is able to sell the damaged property and the
amount of loss the insurance company is able to recover
Abandonment clause - provides that no property can be abandoned to the insurance
company without its consent
Vacancy and unoccupancy clause - 1. Usually found only in policies covering commercial
(business) property
2. If included, it states that coverage is terminated after the insured property has been left vacant
or unoccupied for 60 consecutive days
-vacant: either completely empty or empty to the point where the insured can no longer engage in
the purpose for which the property is insured
-unoccupied: means there are furnishings in the building. But nobody living in it or working in it
The vacancy and unoccupancy permit - an extra endorsement for an extra premium charge.
It extends coverage beyond 60 days of vacancy or unoccupancy
and Correct Answers Graded A+ 2025/2026 Update
Duties of the insured - 1. Pay the premium
2. Take all reasonable means to save and protect the property from loss
3. Give the insurance company immediate notice of loss
4. Give the insurance company proof of loss within 60 days of the loss
5. Separate the damaged property from the undamaged property and allow the insurance company
to inspect the undamaged property as well as the insured's books and records
6. The insured cannot sue the insurance company unless all of these requirements have been
satisfied and then he/she must sue within 12 months of the loss
Duties of the insurance company - 1. Must indemnify the insured within 60 days of proof
of loss
2. May either pay the appraised acv of the loss or repair or replace the damaged property
3. If the insured and insurance company disagree as the acv of the loss and the damaged property
cannot be repaired or replaced, they each can select an appraiser. If the appraisers disagree, they
select an umpire appraiser who will make the final determination
The subrogation clause - states that the insurance company can require the insured to assign
(transfer) to it any legal rights which the insured has against third parties to the insurance company
at the time of loss
Assignment clause - 1. Transfer of a policy to another person
2. Assignment clause of property insurance policy says no assignment of the policy is valid unless
signed by an officer of the insurance company
The other insurance clause - states that the insurance company can either prohibit other
insurance or can limit the amount of other insurance by adding an endorsement to the policy
, Pro rata liability clause - 1. Applies when there are concurrent policies. Concurrent
insurance is when 2 or more policies cover the same property. It is sometimes done when insuring
high value property. The policies should be identical in all respects except face amounts
2. Says that no insurance company shall be responsible for any more than its pro rata share of the
loss
Mortgagee rights - -if a mortgagee (lender) is named on the declarations page, it acquires 3
rights in the policy:
1. 10 days notice of cancellation
2. To have the loss paid to the mortgagee
3. To provide proof of loss should the insured fail to
Salvage - -salvage is when an insurance company pays a claim, and then the insurance
company has the right to assume ownership of the damaged property to repair it and sell it to
recover part or all of the loss
-salvage value is the amount for which the insurance is able to sell the damaged property and the
amount of loss the insurance company is able to recover
Abandonment clause - provides that no property can be abandoned to the insurance
company without its consent
Vacancy and unoccupancy clause - 1. Usually found only in policies covering commercial
(business) property
2. If included, it states that coverage is terminated after the insured property has been left vacant
or unoccupied for 60 consecutive days
-vacant: either completely empty or empty to the point where the insured can no longer engage in
the purpose for which the property is insured
-unoccupied: means there are furnishings in the building. But nobody living in it or working in it
The vacancy and unoccupancy permit - an extra endorsement for an extra premium charge.
It extends coverage beyond 60 days of vacancy or unoccupancy
