state farm | Questions with 100% Verified Answers | Latest
Update 2026/2027
Question: which of the following refers to being restored to the financial
condition you were in before a loss?
Answer: indemnification
Question: mark incurred 8000$ damage to his car in an accident. he
received 8000$ from his insurance company and 4000$ from
the other driver. by receiving a profit from the loss, Mark is in
violation of..
Answer: principle of indemnity
Question: the transfer of risk from one party to another is called
Answer: insurance
Question: the principle of indemnity is designed to prevent
Answer: keeps the insured from making a profit from an insured loss.
Question: the fee paid by the insured in exchange for an insurance
policy is called a
Answer: premium
Question: insurance
Answer: transfers risk of financial losses from one party to another
Question: insured
Answer: individual or organization that pays premiums in exchange for protection
Question: insurer
Answer: company group or government agency offering financial protection
Question: insurance policy
Answer: a legally binding contract in which the insurer agrees to take on specified risks in
exchange for the insured's premiums
Question: principle of indemnity
Answer: restoration to previous financial condition; no more, no less.
Question: what are the four qualifications of a contract
Answer: agreement, consideration, competent parties, and legal purpose. must be 18 years of
age
,Question: what is not a requirement for a legally binding contract
Answer: notarization
Question: when an insurer issues an insurance policy, the actual item,
person or organization that is being insured is called the
Answer: the risk
Question: what is a reserve, in insurance terms
Answer: a pool of collected premiums that the insurer sets aside to pay claims
Question: aleatory
Answer: of or pertaining to accidental causes; of luck or chance; unpredictable
Question: unilateral
Answer: one-sided
Question: utmost good faith
Answer: both parties must act honestly and openly in order for the contract to be valid
Question: adhesion
Answer: one party sets the terms of the contract; the other may simply agree or not agree
Question: unilateral
Answer: only the insurer makes a promise to act; the insured can void contract at any time
Question: personal
Answer: the insured person is protected from losses, not the covered property.
Question: conditional
Answer: the insurer must only honor the contract if the insured meets certain conditions.
Question: aleatory
Answer: the exectution of the contract depends on an unknown future event.
Question: an insurance applicat revealing his convictions for drunk
driving to an insurer is an example of
Answer: utmost good faith.
Question: tom purchases a new car from his local car dealer. he also
decides to get insurance coverage that will pay to repair the
car if he were to get into an accident. this is because tom
wants to protect
Answer: his own financial interest in the car.
, Question: tom decides to purchase an insurance policy to protect his
home. according to the definition of a personal contract,
which of the following most accurately describes what tomes
insurance actually protects
Answer: toms financial interest in thee home
Question: what is not true about an aleatory contract
Answer: in an aleatory contract, the amount of benefit to the insured and insurer is equal.
Question: what does D.I.C.E stand for?
Answer: declarations page (and definitions), insuring agreement, conditions and exclusions
(and
endorsements)
Question: 'we will provide the insurance described in this policy in return
for the premium and compliance with all applicable provisions
of this policy.' in which section of the insurance policy might
this statement be found?
Answer: insuring agreement
Question: in which section of the policy might you find the following
statement ? 'damage to insured property must be reported
within 15 days of the damaging occurrence.'
Answer: conditions
Question: which of these causes of loss is least likely to be covered by a
typical insurance policy?
Answer: nuclear hazard
Question: edna loses some of her property in a hailstorm. when an
adjuster comes to investigate the loss, he gives an estimate
that edna thinks is far too lowl. as negotiations continue,
neither edna nor the adjuster will budge. where in Ednas
policy would you find the procedure to follow in this
situation?
Answer: conditions
Question: conditions
Answer: lists requirements that the insured must meet for coverage to apply
Question: declarations
Answer: information that makes the policy unique to a specific insured.
Question: exclusions
Answer: causes of loss or items of property that are not covered by the policy
Update 2026/2027
Question: which of the following refers to being restored to the financial
condition you were in before a loss?
Answer: indemnification
Question: mark incurred 8000$ damage to his car in an accident. he
received 8000$ from his insurance company and 4000$ from
the other driver. by receiving a profit from the loss, Mark is in
violation of..
Answer: principle of indemnity
Question: the transfer of risk from one party to another is called
Answer: insurance
Question: the principle of indemnity is designed to prevent
Answer: keeps the insured from making a profit from an insured loss.
Question: the fee paid by the insured in exchange for an insurance
policy is called a
Answer: premium
Question: insurance
Answer: transfers risk of financial losses from one party to another
Question: insured
Answer: individual or organization that pays premiums in exchange for protection
Question: insurer
Answer: company group or government agency offering financial protection
Question: insurance policy
Answer: a legally binding contract in which the insurer agrees to take on specified risks in
exchange for the insured's premiums
Question: principle of indemnity
Answer: restoration to previous financial condition; no more, no less.
Question: what are the four qualifications of a contract
Answer: agreement, consideration, competent parties, and legal purpose. must be 18 years of
age
,Question: what is not a requirement for a legally binding contract
Answer: notarization
Question: when an insurer issues an insurance policy, the actual item,
person or organization that is being insured is called the
Answer: the risk
Question: what is a reserve, in insurance terms
Answer: a pool of collected premiums that the insurer sets aside to pay claims
Question: aleatory
Answer: of or pertaining to accidental causes; of luck or chance; unpredictable
Question: unilateral
Answer: one-sided
Question: utmost good faith
Answer: both parties must act honestly and openly in order for the contract to be valid
Question: adhesion
Answer: one party sets the terms of the contract; the other may simply agree or not agree
Question: unilateral
Answer: only the insurer makes a promise to act; the insured can void contract at any time
Question: personal
Answer: the insured person is protected from losses, not the covered property.
Question: conditional
Answer: the insurer must only honor the contract if the insured meets certain conditions.
Question: aleatory
Answer: the exectution of the contract depends on an unknown future event.
Question: an insurance applicat revealing his convictions for drunk
driving to an insurer is an example of
Answer: utmost good faith.
Question: tom purchases a new car from his local car dealer. he also
decides to get insurance coverage that will pay to repair the
car if he were to get into an accident. this is because tom
wants to protect
Answer: his own financial interest in the car.
, Question: tom decides to purchase an insurance policy to protect his
home. according to the definition of a personal contract,
which of the following most accurately describes what tomes
insurance actually protects
Answer: toms financial interest in thee home
Question: what is not true about an aleatory contract
Answer: in an aleatory contract, the amount of benefit to the insured and insurer is equal.
Question: what does D.I.C.E stand for?
Answer: declarations page (and definitions), insuring agreement, conditions and exclusions
(and
endorsements)
Question: 'we will provide the insurance described in this policy in return
for the premium and compliance with all applicable provisions
of this policy.' in which section of the insurance policy might
this statement be found?
Answer: insuring agreement
Question: in which section of the policy might you find the following
statement ? 'damage to insured property must be reported
within 15 days of the damaging occurrence.'
Answer: conditions
Question: which of these causes of loss is least likely to be covered by a
typical insurance policy?
Answer: nuclear hazard
Question: edna loses some of her property in a hailstorm. when an
adjuster comes to investigate the loss, he gives an estimate
that edna thinks is far too lowl. as negotiations continue,
neither edna nor the adjuster will budge. where in Ednas
policy would you find the procedure to follow in this
situation?
Answer: conditions
Question: conditions
Answer: lists requirements that the insured must meet for coverage to apply
Question: declarations
Answer: information that makes the policy unique to a specific insured.
Question: exclusions
Answer: causes of loss or items of property that are not covered by the policy
