STATE FARM LICENSE CERTIFICATION
EXAM PREP 2026 COMPLETE STUDY GUIDE
QUESTIONS AND SOLUTIONS
◉ 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
EXAM PREP 2026 COMPLETE STUDY GUIDE
QUESTIONS AND SOLUTIONS
◉ 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
