State Farm Insurance License Exam Questions
and ANSWERs () (Verified
ANSWERs)
Abandonment Condition - 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 - ANSWER-A loss that occurs at a specific time and place
Actual Cash Value (ACV) - ANSWER-Today's replacement cost minus depreciation. Depreciation
from wear and tear, or obsolescence.
admitted insurer; authorized insurer - ANSWER-Company that meets a state insurance
department's standards and is allowed to do business in that state.
Adverse Selection - ANSWER-the tendency of insureds with a greater than average chance of
loss to purchase insurance
Annual Transit Policy - ANSWER-Nonfiled commercial inland marine transportation form that
insures a property owner's incoming or outgoing shipments of goods during a year
Appraisal Clause - ANSWER-A survey of property to determine the insurable value of the
property or the value of the loss sustained.
, Appraisal Condition - ANSWER-Policy condition that outlines a procedure for when the insured
and insurer disagree on the amount of a loss
Assignment - ANSWER-The legal transfer of one's interest in an insurance policy to another
person.
Aviation Hull Insurance - ANSWER-Provides coverage for physical damage to an aircraft.
Bailee's Customers Policy - 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 - 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 - 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 - ANSWER-A person or organization that has temporary possession of someone else's
personal property.
Basic Perils in Homeowners Policy - 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) - ANSWER-D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
and ANSWERs () (Verified
ANSWERs)
Abandonment Condition - 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 - ANSWER-A loss that occurs at a specific time and place
Actual Cash Value (ACV) - ANSWER-Today's replacement cost minus depreciation. Depreciation
from wear and tear, or obsolescence.
admitted insurer; authorized insurer - ANSWER-Company that meets a state insurance
department's standards and is allowed to do business in that state.
Adverse Selection - ANSWER-the tendency of insureds with a greater than average chance of
loss to purchase insurance
Annual Transit Policy - ANSWER-Nonfiled commercial inland marine transportation form that
insures a property owner's incoming or outgoing shipments of goods during a year
Appraisal Clause - ANSWER-A survey of property to determine the insurable value of the
property or the value of the loss sustained.
, Appraisal Condition - ANSWER-Policy condition that outlines a procedure for when the insured
and insurer disagree on the amount of a loss
Assignment - ANSWER-The legal transfer of one's interest in an insurance policy to another
person.
Aviation Hull Insurance - ANSWER-Provides coverage for physical damage to an aircraft.
Bailee's Customers Policy - 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 - 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 - 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 - ANSWER-A person or organization that has temporary possession of someone else's
personal property.
Basic Perils in Homeowners Policy - 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) - ANSWER-D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
