State Farm Insurance License Exam
Abandonment Condition - ANSA condition often contained in property insurance policies that
states that the insured cannot abandon damaged property to the insurer and demand to be
reimbursed for its full value.
Accident - ANSA loss that occurs at a specific time and place
Actual Cash Value (ACV) - ANSToday's replacement cost minus depreciation. Depreciation from
wear and tear, or obsolescence.
admitted insurer; authorized insurer - ANSCompany that meets a state insurance department's
standards and is allowed to do business in that state.
Adverse Selection - ANSthe tendency of insureds with a greater than average chance of loss to
purchase insurance
Annual Transit Policy - ANSNonfiled commercial inland marine transportation form that insures
a property owner's incoming or outgoing shipments of goods during a year
Appraisal Clause - ANSA survey of property to determine the insurable value of the property or
the value of the loss sustained.
Appraisal Condition - ANSPolicy condition that outlines a procedure for when the insured and
insurer disagree on the amount of a loss
Assignment - ANSThe legal transfer of one's interest in an insurance policy to another person.
Aviation Hull Insurance - ANSProvides coverage for physical damage to an aircraft.
Bailee's Customers Policy - ANSNonfiled commercial inland marine form obtained by a bailee to
cover loss or damage to customers' property in the bailee's custody without regard to liability.
Appurtenant Structures - ANSBuildings of lesser value that are on the same premises as the
main building insured under a property policy; they are usually covered by the policy.
Assignment Condition - ANSCondition in insurance policies that specifies that the policy cannot
be transferred to another unless the company consents to the transfer in writing.
Bailee - ANSA person or organization that has temporary possession of someone else's
personal property.
, Basic Perils in Homeowners Policy - ANSThere are 14 perils. Fire, lightening, riot, explosion,
vehicles, volcanic eruption, civil commotion, smoke, hail, aircraft, windstorm, vandalism,
malicious mischief, theft.
Basic Property Policy Structure (DICEE) - ANSD - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
Blanket Insurance - ANSType of insurance policy that covers more than one item of property at
a single location or one or more items of property at multiple locations
Builders Risk Coverage Form - ANSCommercial property coverage forms that covers
commercial, residential, or farm buildings that are under construction or during remodeling.
Cargo Insurance - ANSType of ocean marine insurance that covers goods while they are in
transit over water.
Binder - ANSOral or written statement that provides immediate insurance protection for a
specified period; designed to provide temporary coverage until a policy is issued or denied.
BOP - ANSPackage policy designed to provide broad property and liability coverage for small
businesses; eligibility requirements are stricter than the CPP.
Business Income Policy - ANSPays for loss of income that the insured sustains due to a direct
physical loss from a covered peril that forces the insured to suspend operations until the
property can be repaired, rebuilt, or replaced with reasonable speed; available with or without
extra expense coverage.
Causes of Loss Form - ANSSeparate 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 - ANSCommercial 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 - ANSIf 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.
Abandonment Condition - ANSA condition often contained in property insurance policies that
states that the insured cannot abandon damaged property to the insurer and demand to be
reimbursed for its full value.
Accident - ANSA loss that occurs at a specific time and place
Actual Cash Value (ACV) - ANSToday's replacement cost minus depreciation. Depreciation from
wear and tear, or obsolescence.
admitted insurer; authorized insurer - ANSCompany that meets a state insurance department's
standards and is allowed to do business in that state.
Adverse Selection - ANSthe tendency of insureds with a greater than average chance of loss to
purchase insurance
Annual Transit Policy - ANSNonfiled commercial inland marine transportation form that insures
a property owner's incoming or outgoing shipments of goods during a year
Appraisal Clause - ANSA survey of property to determine the insurable value of the property or
the value of the loss sustained.
Appraisal Condition - ANSPolicy condition that outlines a procedure for when the insured and
insurer disagree on the amount of a loss
Assignment - ANSThe legal transfer of one's interest in an insurance policy to another person.
Aviation Hull Insurance - ANSProvides coverage for physical damage to an aircraft.
Bailee's Customers Policy - ANSNonfiled commercial inland marine form obtained by a bailee to
cover loss or damage to customers' property in the bailee's custody without regard to liability.
Appurtenant Structures - ANSBuildings of lesser value that are on the same premises as the
main building insured under a property policy; they are usually covered by the policy.
Assignment Condition - ANSCondition in insurance policies that specifies that the policy cannot
be transferred to another unless the company consents to the transfer in writing.
Bailee - ANSA person or organization that has temporary possession of someone else's
personal property.
, Basic Perils in Homeowners Policy - ANSThere are 14 perils. Fire, lightening, riot, explosion,
vehicles, volcanic eruption, civil commotion, smoke, hail, aircraft, windstorm, vandalism,
malicious mischief, theft.
Basic Property Policy Structure (DICEE) - ANSD - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
Blanket Insurance - ANSType of insurance policy that covers more than one item of property at
a single location or one or more items of property at multiple locations
Builders Risk Coverage Form - ANSCommercial property coverage forms that covers
commercial, residential, or farm buildings that are under construction or during remodeling.
Cargo Insurance - ANSType of ocean marine insurance that covers goods while they are in
transit over water.
Binder - ANSOral or written statement that provides immediate insurance protection for a
specified period; designed to provide temporary coverage until a policy is issued or denied.
BOP - ANSPackage policy designed to provide broad property and liability coverage for small
businesses; eligibility requirements are stricter than the CPP.
Business Income Policy - ANSPays for loss of income that the insured sustains due to a direct
physical loss from a covered peril that forces the insured to suspend operations until the
property can be repaired, rebuilt, or replaced with reasonable speed; available with or without
extra expense coverage.
Causes of Loss Form - ANSSeparate 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 - ANSCommercial 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 - ANSIf 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.
