REVISED STATE FARM INSURANCE LICENSE EXAM

REVISED STATE FARM INSURANCE LICENSE EXAM Abandonment Condition - CORRECT ANSWER -A 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 - CORRECT ANSWER -A loss that occurs at a specific time and place Actual Cash Value (ACV) - CORRECT ANSWER -Today's replacement cost minus depreciation. Depreciation from wear and tear, or obsolescence. admitted insurer; authorized insurer - CORRECT ANSWER -Company that meets a state insurance department's standards and is allowed to do business in that state. Adverse Selection - CORRECT ANSWER -the tendency of insureds with a greater than average chance of loss to purchase insurance Annual Transit Policy - CORRECT ANSWER -Nonfiled commercial inland marine transportation form that insures a property owner's incoming or outgoing shipments of goods during a year Appraisal Clause - CORRECT ANSWER -A survey of property to determine the insurable value of the property or the value of the loss sustained. Appraisal Condition - CORRECT ANSWER -Policy condition that outlines a procedure for when the insured and insurer disagree on the amount of a loss Assignment - CORRECT ANSWER -The legal transfer of one's interest in an insurance policy to another person. Aviation Hull Insurance - CORRECT ANSWER -Provides coverage for physical damage to an aircraft. Bailee's Customers Policy - CORRECT ANSWER -Nonfiled 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 - CORRECT ANSWER -Buildings 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 - CORRECT ANSWER -Condition in insurance policies that specifies that the policy cannot be transferred to another unless the company consents to the transfer in writing. Bailee - CORRECT ANSWER -A person or organization that has temporary possession of someone else's personal property. Basic Perils in Homeowners Policy - CORRECT ANSWER -There 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) - CORRECT ANSWER -D - Declarations I - Insuring agreement C - Conditions E - Exclusions E - Endorsements Blanket Insurance - CORRECT ANSWER -Type 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