State Farm Insurance License Exam
Questions and Answers
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.
Questions and Answers
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.
