STATE FARM FIRE INDEPENDENT POLICY
EXAM 2024-2025
Choose the false statement stated below: In the HO-3 policy, ALE payments will
only be made for:
Choose the single best answer.
A. The shortest time required to restore or replace the damaged property, but not
more than 24 months.
B. If the insured does not rebuild, the time required for the insured to relocate to
permanent dwelling quarters shall not exceed 24 months.
C. ALE payments can continue after the policy's expiration date.
D. ALE payouts are limited to expenditures incurred within the shortest of three
time windows specified by the policy.
E. ALE payments will not exceed 20% of the Coverage A limit. - ANSWER E.
ALE payments will not exceed 20% of the Coverage A limit.
The insured has a HO-3 insurance in force. All losses are compensated, except:
Choose the single best answer.
A. Shed rented to a tenant for furniture storage.
B. Detached garage used to operate a lawn mower repair shop.
C. The neighbor rented a garage for storing an antique automobile.
D. The basement used as an office for the insured's bookkeeping firm.
,E. ANSWER B: Detached garage used to operate a lawnmower repair shop.
Jennifer Marco's insurance is HO-3, with a $75,000 Coverage B limit, a $500
deductible, and no Option AI, ID, FA, or JF. Which of the following assertions is
correct about her personal property?
Choose the single best answer.
A. Personal property coverage relates to the dangers stated in Section I - Losses
Insured, Coverage B - Personal Property, and Section I - Additional Coverages.
B. Coverage B only applies to Jennifer's personal belongings while she is traveling
anywhere in the world.
C. The limit of responsibility for theft loss of jewelry and furs is $1,000 or 10% of
the Coverage B maximum, whichever is larger.
D. The liability limit for tornado-related firearm losses is $2,500. - ANSWER A.
Personal property coverage applies to the dangers stated in Section I - Losses
Insured, Coverage B - Personal Property, and Section I - Additional Coverages.
In a HO-3 insurance, deductibles apply to which of the following types of losses?
Choose the single best answer.
A. Credit cards, bank transfer cards, forgery, and counterfeit money
B. Fire Department Service Charges
C. Rekey locks when the keys are stolen.
D. Debris Removal Charges: ANSWER B. Fire Department Service Charges
Coverage C of the HO-3 policy has three coverages:
, Additional Living Expense
Fair rental value.
Property Removed
True or False - ANSWER False: Additional living expenses, fair rental value, and
forbidden use.
The processes to apply the deductible on a HO-3 homeowners policy are:
1.) The deductible is applied first to the insured loss.
2.) Any coverage or specific limits are then applied to the insured loss.
3.) The amount payable to the insured will be the greater of the amounts
determined in stages 1 and 2.
True or False: ANSWER True
The definition of an insured covers anything except:
Choose the single best answer.
A. Individual(s) named on the Declaration Page
B. Spouse, if residing in the household.
EXAM 2024-2025
Choose the false statement stated below: In the HO-3 policy, ALE payments will
only be made for:
Choose the single best answer.
A. The shortest time required to restore or replace the damaged property, but not
more than 24 months.
B. If the insured does not rebuild, the time required for the insured to relocate to
permanent dwelling quarters shall not exceed 24 months.
C. ALE payments can continue after the policy's expiration date.
D. ALE payouts are limited to expenditures incurred within the shortest of three
time windows specified by the policy.
E. ALE payments will not exceed 20% of the Coverage A limit. - ANSWER E.
ALE payments will not exceed 20% of the Coverage A limit.
The insured has a HO-3 insurance in force. All losses are compensated, except:
Choose the single best answer.
A. Shed rented to a tenant for furniture storage.
B. Detached garage used to operate a lawn mower repair shop.
C. The neighbor rented a garage for storing an antique automobile.
D. The basement used as an office for the insured's bookkeeping firm.
,E. ANSWER B: Detached garage used to operate a lawnmower repair shop.
Jennifer Marco's insurance is HO-3, with a $75,000 Coverage B limit, a $500
deductible, and no Option AI, ID, FA, or JF. Which of the following assertions is
correct about her personal property?
Choose the single best answer.
A. Personal property coverage relates to the dangers stated in Section I - Losses
Insured, Coverage B - Personal Property, and Section I - Additional Coverages.
B. Coverage B only applies to Jennifer's personal belongings while she is traveling
anywhere in the world.
C. The limit of responsibility for theft loss of jewelry and furs is $1,000 or 10% of
the Coverage B maximum, whichever is larger.
D. The liability limit for tornado-related firearm losses is $2,500. - ANSWER A.
Personal property coverage applies to the dangers stated in Section I - Losses
Insured, Coverage B - Personal Property, and Section I - Additional Coverages.
In a HO-3 insurance, deductibles apply to which of the following types of losses?
Choose the single best answer.
A. Credit cards, bank transfer cards, forgery, and counterfeit money
B. Fire Department Service Charges
C. Rekey locks when the keys are stolen.
D. Debris Removal Charges: ANSWER B. Fire Department Service Charges
Coverage C of the HO-3 policy has three coverages:
, Additional Living Expense
Fair rental value.
Property Removed
True or False - ANSWER False: Additional living expenses, fair rental value, and
forbidden use.
The processes to apply the deductible on a HO-3 homeowners policy are:
1.) The deductible is applied first to the insured loss.
2.) Any coverage or specific limits are then applied to the insured loss.
3.) The amount payable to the insured will be the greater of the amounts
determined in stages 1 and 2.
True or False: ANSWER True
The definition of an insured covers anything except:
Choose the single best answer.
A. Individual(s) named on the Declaration Page
B. Spouse, if residing in the household.
