State Farm Property

STATE FARM PROPERTY EXAM 2024 WITH 100% CORRECT ANSWERS In property insurance actual cash value is defined as which of the following - correct answer Replacement cost at the time of the loss, less depreciation Peril is most easily defined as - correct answer the cause of loss insured against What is a leading factor in the determination of actual cash value - correct answer replacement cost Replacement cost is defined as - correct answer full replacement of property at its current cost, new and without reduction for depreciation Property insurance that provides 100k coverage for a building and 50k coverage for personal property at a single location is called - correct answer Specific coverage Which of the following is used in the formula for calculating the actual cash value of a property - correct answer replacement cost What is the purpose of the coinsurance clause found in property insurance policies? - correct answer Encourage the insured to insure the property closer to its full value An insured has a liability policy that sets the amount at 50k for all claims that arise from a single incident. which type of limit of liability does this insured's policy have? - correct answer per occurrence When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as - correct answer stated amount What is stated amount coverage - correct answer In stated amt coverage the value of the insured property is determined at the time the policy is written. in the event of a loss, that amount is paid without regard to any coinsurance provision. However, if the loss is less than the total, the insurer has salvage rights with the insured having first right of refusal of the salvage. What type of liability would a person who owns a swimming pool have? - correct answer Absolute What is absolute liability - correct answer Any conduct that is inherently dangerous imposes absolute liability. the claimant does not have to prove anything Insurable interest in the property covered in a policy must be proven - correct answer at the time of loss Which of the following is NOT an element of negligence breach, unbroken chain, libel, duty - correct answer libel what is libel - correct answer a type of intentional tort With respect to the business of insurance, a hazard is - correct answer any condition or exposure that increases the possibility of loss What are the four essential elements of all legal contracts - correct answer offer and acceptance, consideration, competent parties, and legal purpose In forming an insurance contract, when does acceptance usually occur? - correct answer when an insurer's underwriter approves coverage Who is responsible for filling out a notice of claim form - correct answer insured what is a notice of claim - correct answer a form or statement from an insured to an insurer, informing the insurer that events leading to a possible claim have occurred If a property is covered by comp a for 20k and comp b covers the same property for 40k, how much will comp a pay on a 24k loss? - correct answer 8000 pro rata liability applies each policy pays a percentage of the loss based on the percentage of coverage that policy provides. comp a carries 1/3 of the total coverage (20k + 40k = 60k) Therefore 1/3 of the 24k loss is 8,000 In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within - correct answer a specified time What are considered parts of the policy structure - correct answer conditions, exclusions, insuring clause A homeowner sells his house to a friend. the friend wants to keep the homeowners current policy in effect. under the assignment provision which of the following is most likely? - correct answer the homeowner will need to get written consent from the insurer before the policy can be reassigned What is consideration? - correct answer something of value that is transferred between the two parties to form a legal contract What are endorsements - correct answer change the policy's original terms, conditions, or coverages. endorsements can add or delete coverage or merely correct items such as the insured's name and address etc Termination of an inforce insurance policy prior to the expiration date shown in the policy is known as - correct answer cancellation When