STATE FARM LICENSE EXAM SCRIPT FINAL
PAPER 2026 SOLVED QUESTIONS AND
ANSWERS
◉ Causes of Loss Form
Answer: Separate form used with the commercial property coverage
part of the commercial package policy that lists covered perils and
exclusions. Several different versions provide increasingly broader
coverage from basic to broad to special.
◉ Condominium Association Coverage Form
Answer: Commercial Property coverage form that covers the
buildings in a condominium complex. Does not cover condominium
owner's personal property.
◉ Coverage D on a HO Policy - Loss of Use
Answer: If property loss makes the residence premises
uninhabitable, the additional living expenses are covered; or if a
covered loss to the insured's property makes a part of the residence
premises uninhabitable that is rented to others or held for rental by
the insured, this coverage will pay the fair rental value.
◉ coverages excluded on dwelling policy
,Answer: Theft, vandalism, and malicious mischief excluded on basic
policy. Liability excluded on all policies.
◉ Coverage B of homeowners policy
Answer: Other structures; covers building and structures on the
premises other than the dwelling set apart by a clear space from the
dwelling; 10% of Coverage A.
◉ Coverage D on a dwelling policy
Answer: Fair rental value is covered on a dwelling policy.
◉ Coverage limit on money in HO
Answer: $200 limit on personal property with special limits
◉ Coinsurance Clause on Property
Answer: Insurance carried/Insurance required X amount of loss
◉ Coverage F on homeowners policy
Answer: Medical payments to others; pays all necessary medical
expenses for up to three years after an accident.
◉ Deductible
, Answer: The amount of expenses that must be paid out of pocket
before an insurer will pay any expenses from a covered loss.
◉ Direct Loss
Answer: Financial loss resulting directly from a loss to property
◉ Equipment Breakdown Coverage; boiler and machinery coverage
Answer: Part of the commercial package policy that covers a loss due
to breakdown of business equipment due to direct or indirect loss.
◉ Excess Insurance
Answer: When two or more policies or coverage apply to the same
loss, the one that applies only after the limits of the primary
coverage have been exhausted.
◉ Difference in Conditions Insurance (DIC)
Answer: Type of commercial property policy that covers most
insurable perils but excludes basic fire and extended coverage perils.
◉ Eligible for Dwelling Policy
Answer: Provides coverage for the following:
-Up to five boarders
-Up to four apartments
PAPER 2026 SOLVED QUESTIONS AND
ANSWERS
◉ Causes of Loss Form
Answer: Separate form used with the commercial property coverage
part of the commercial package policy that lists covered perils and
exclusions. Several different versions provide increasingly broader
coverage from basic to broad to special.
◉ Condominium Association Coverage Form
Answer: Commercial Property coverage form that covers the
buildings in a condominium complex. Does not cover condominium
owner's personal property.
◉ Coverage D on a HO Policy - Loss of Use
Answer: If property loss makes the residence premises
uninhabitable, the additional living expenses are covered; or if a
covered loss to the insured's property makes a part of the residence
premises uninhabitable that is rented to others or held for rental by
the insured, this coverage will pay the fair rental value.
◉ coverages excluded on dwelling policy
,Answer: Theft, vandalism, and malicious mischief excluded on basic
policy. Liability excluded on all policies.
◉ Coverage B of homeowners policy
Answer: Other structures; covers building and structures on the
premises other than the dwelling set apart by a clear space from the
dwelling; 10% of Coverage A.
◉ Coverage D on a dwelling policy
Answer: Fair rental value is covered on a dwelling policy.
◉ Coverage limit on money in HO
Answer: $200 limit on personal property with special limits
◉ Coinsurance Clause on Property
Answer: Insurance carried/Insurance required X amount of loss
◉ Coverage F on homeowners policy
Answer: Medical payments to others; pays all necessary medical
expenses for up to three years after an accident.
◉ Deductible
, Answer: The amount of expenses that must be paid out of pocket
before an insurer will pay any expenses from a covered loss.
◉ Direct Loss
Answer: Financial loss resulting directly from a loss to property
◉ Equipment Breakdown Coverage; boiler and machinery coverage
Answer: Part of the commercial package policy that covers a loss due
to breakdown of business equipment due to direct or indirect loss.
◉ Excess Insurance
Answer: When two or more policies or coverage apply to the same
loss, the one that applies only after the limits of the primary
coverage have been exhausted.
◉ Difference in Conditions Insurance (DIC)
Answer: Type of commercial property policy that covers most
insurable perils but excludes basic fire and extended coverage perils.
◉ Eligible for Dwelling Policy
Answer: Provides coverage for the following:
-Up to five boarders
-Up to four apartments
