State Farm Insurance License Exam Test Question and
Answers | Graded A+
Abandonment Condition - ✔️✔️-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.
Absolute Liability - ✔️✔️-Type of liability imposed by law on those participating in
certain activities that are considered especially hazardous; a person involved in such
operations may be held liable for the damages of another even though the individual
was not negligent
Accident - ✔️✔️-A loss that occurs at a specific time and place
Actual Cash Value (ACV) - ✔️✔️-Today's replacement cost minus depreciation.
Depreciation from wear and tear, or obsolescence.
Additional Coverage; Coverage Extensions; Extended Coverages; Other Coverages -
✔️✔️-Supplement insurance coverage that apply only in certain circumstances, have
reduced or separate limits of liability, or require the insured to meet certain requirements
before they are applicable
admitted insurer; authorized insurer - ✔️✔️-Company that meets a state insurance
department's standards and is allowed to do business in that state.
Adverse Selection - ✔️✔️-the tendency of insureds with a greater than average chance
of loss to purchase insurance
,Advertising Injury - ✔️✔️-Coverage in the CGL that covers losses caused by oral or
written material that slanders or libels, violates privacy rights or infringes on copyrights,
titles or slogans.
Aggregate Limit - ✔️✔️-Type of policy limit found in liability policies that limits coverage
to a specified total amount for all losses occurring within the policy period
Annual Transit Policy - ✔️✔️-Nonfiled commercial inland marine transportation form
that insures a property owner's incoming or outgoing shipments of goods during a year
Appraisal Clause - ✔️✔️-A survey of property to determine the insurable value of the
property or the value of the loss sustained.
Appraisal Condition - ✔️✔️-Policy condition that outlines a procedure for when the
insured and insurer disagree on the amount of a loss
Appurtenant Structures - ✔️✔️-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.
Assigned Risk Plan; Automobile Insurance Plan - ✔️✔️-A state-sponsored plan that
provides automobile insurance to those who are uninsurable under standard auto
insurance policies.
Assignment - ✔️✔️-The legal transfer of one's interest in an insurance policy to another
person.
Assignment Condition - ✔️✔️-Condition in insurance policies that specifies that the
policy cannot be transferred to another unless the company consents to the transfer in
writing.
, Assumption Risk - ✔️✔️-Defense against liability based on the common law principle
that a person who knowingly exposes themselves to danger or injury takes on the risk of
loss and cannot hold another person responsible for the loss.
Aviation Hull Insurance - ✔️✔️-Provides coverage for physical damage to an aircraft.
Bailee - ✔️✔️-A person or organization that has temporary possession of someone
else's personal property.
Bailee's Customers Policy - ✔️✔️-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.
Basic Perils in Homeowners Policy - ✔️✔️-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) - ✔️✔️-D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
Bid Bond - ✔️✔️-Type of surety bond that if a contractor's price is accepted, the
contractor will enter into a contract and provide the required performance bond.
Binder - ✔️✔️-Oral or written statement that provides immediate insurance protection
for a specified period; designed to provide temporary coverage until a policy is issued or
denied.
Answers | Graded A+
Abandonment Condition - ✔️✔️-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.
Absolute Liability - ✔️✔️-Type of liability imposed by law on those participating in
certain activities that are considered especially hazardous; a person involved in such
operations may be held liable for the damages of another even though the individual
was not negligent
Accident - ✔️✔️-A loss that occurs at a specific time and place
Actual Cash Value (ACV) - ✔️✔️-Today's replacement cost minus depreciation.
Depreciation from wear and tear, or obsolescence.
Additional Coverage; Coverage Extensions; Extended Coverages; Other Coverages -
✔️✔️-Supplement insurance coverage that apply only in certain circumstances, have
reduced or separate limits of liability, or require the insured to meet certain requirements
before they are applicable
admitted insurer; authorized insurer - ✔️✔️-Company that meets a state insurance
department's standards and is allowed to do business in that state.
Adverse Selection - ✔️✔️-the tendency of insureds with a greater than average chance
of loss to purchase insurance
,Advertising Injury - ✔️✔️-Coverage in the CGL that covers losses caused by oral or
written material that slanders or libels, violates privacy rights or infringes on copyrights,
titles or slogans.
Aggregate Limit - ✔️✔️-Type of policy limit found in liability policies that limits coverage
to a specified total amount for all losses occurring within the policy period
Annual Transit Policy - ✔️✔️-Nonfiled commercial inland marine transportation form
that insures a property owner's incoming or outgoing shipments of goods during a year
Appraisal Clause - ✔️✔️-A survey of property to determine the insurable value of the
property or the value of the loss sustained.
Appraisal Condition - ✔️✔️-Policy condition that outlines a procedure for when the
insured and insurer disagree on the amount of a loss
Appurtenant Structures - ✔️✔️-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.
Assigned Risk Plan; Automobile Insurance Plan - ✔️✔️-A state-sponsored plan that
provides automobile insurance to those who are uninsurable under standard auto
insurance policies.
Assignment - ✔️✔️-The legal transfer of one's interest in an insurance policy to another
person.
Assignment Condition - ✔️✔️-Condition in insurance policies that specifies that the
policy cannot be transferred to another unless the company consents to the transfer in
writing.
, Assumption Risk - ✔️✔️-Defense against liability based on the common law principle
that a person who knowingly exposes themselves to danger or injury takes on the risk of
loss and cannot hold another person responsible for the loss.
Aviation Hull Insurance - ✔️✔️-Provides coverage for physical damage to an aircraft.
Bailee - ✔️✔️-A person or organization that has temporary possession of someone
else's personal property.
Bailee's Customers Policy - ✔️✔️-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.
Basic Perils in Homeowners Policy - ✔️✔️-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) - ✔️✔️-D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
Bid Bond - ✔️✔️-Type of surety bond that if a contractor's price is accepted, the
contractor will enter into a contract and provide the required performance bond.
Binder - ✔️✔️-Oral or written statement that provides immediate insurance protection
for a specified period; designed to provide temporary coverage until a policy is issued or
denied.
