State Farm Insurance License Exam
Questions and Answers 2024
Abandonment Condition - (answers)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 - (answers)A loss that occurs at a specific time and place
Actual Cash Value (ACV) - (answers)Today's replacement cost minus
depreciation. Depreciation from wear and tear, or obsolescence.
admitted insurer; authorized insurer - (answers)Company that meets a state
insurance department's standards and is allowed to do business in that state.
Adverse Selection - (answers)the tendency of insureds with a greater than
average chance of loss to purchase insurance
Annual Transit Policy - (answers)Nonfiled commercial inland marine
transportation form that insures a property owner's incoming or outgoing
shipments of goods during a year
Appraisal Clause - (answers)A survey of property to determine the insurable
value of the property or the value of the loss sustained.
Appraisal Condition - (answers)Policy condition that outlines a procedure for
when the insured and insurer disagree on the amount of a loss
Assignment - (answers)The legal transfer of one's interest in an insurance policy
to another person.
,Aviation Hull Insurance - (answers)Provides coverage for physical damage to
an aircraft.
Bailee's Customers Policy - (answers)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 - (answers)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 - (answers)Condition in insurance policies that specifies
that the policy cannot be transferred to another unless the company consents to
the transfer in writing.
Bailee - (answers)A person or organization that has temporary possession of
someone else's personal property.
Basic Perils in Homeowners Policy - (answers)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) - (answers)D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
, Blanket Insurance - (answers)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
Builders Risk Coverage Form - (answers)Commercial property coverage forms
that covers commercial, residential, or farm buildings that are under
construction or during remodeling.
Cargo Insurance - (answers)Type of ocean marine insurance that covers goods
while they are in transit over water.
Binder - (answers)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.
BOP - (answers)Package policy designed to provide broad property and liability
coverage for small businesses; eligibility requirements are stricter than the CPP.
Business Income Policy - (answers)Pays 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 - (answers)Separate 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 - (answers)Commercial Property
coverage form that covers the buildings in a condominium complex. Does not
cover condominium owner's personal property.
Questions and Answers 2024
Abandonment Condition - (answers)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 - (answers)A loss that occurs at a specific time and place
Actual Cash Value (ACV) - (answers)Today's replacement cost minus
depreciation. Depreciation from wear and tear, or obsolescence.
admitted insurer; authorized insurer - (answers)Company that meets a state
insurance department's standards and is allowed to do business in that state.
Adverse Selection - (answers)the tendency of insureds with a greater than
average chance of loss to purchase insurance
Annual Transit Policy - (answers)Nonfiled commercial inland marine
transportation form that insures a property owner's incoming or outgoing
shipments of goods during a year
Appraisal Clause - (answers)A survey of property to determine the insurable
value of the property or the value of the loss sustained.
Appraisal Condition - (answers)Policy condition that outlines a procedure for
when the insured and insurer disagree on the amount of a loss
Assignment - (answers)The legal transfer of one's interest in an insurance policy
to another person.
,Aviation Hull Insurance - (answers)Provides coverage for physical damage to
an aircraft.
Bailee's Customers Policy - (answers)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 - (answers)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 - (answers)Condition in insurance policies that specifies
that the policy cannot be transferred to another unless the company consents to
the transfer in writing.
Bailee - (answers)A person or organization that has temporary possession of
someone else's personal property.
Basic Perils in Homeowners Policy - (answers)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) - (answers)D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
, Blanket Insurance - (answers)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
Builders Risk Coverage Form - (answers)Commercial property coverage forms
that covers commercial, residential, or farm buildings that are under
construction or during remodeling.
Cargo Insurance - (answers)Type of ocean marine insurance that covers goods
while they are in transit over water.
Binder - (answers)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.
BOP - (answers)Package policy designed to provide broad property and liability
coverage for small businesses; eligibility requirements are stricter than the CPP.
Business Income Policy - (answers)Pays 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 - (answers)Separate 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 - (answers)Commercial Property
coverage form that covers the buildings in a condominium complex. Does not
cover condominium owner's personal property.
