1 | P a g e | © copyright 2024/2025 | Grade A+
ACA State farm Questions & 100% Correct
Answers
All of the following describe insurable interest EXCEPT:
A.Insurable Interest must exist at the time of the loss.
B.Insurance Interest must exist for insurance to respond
C.Show a similarity between insurance and wagering.
D.The insured would suffer an economic loss.
✓ ~~> Show a similarity between insurance and wagering.
An Insurance Policy is a contract with all of the following characteristics,
EXCEPT
A. It is a personal contract.
B. Parties are of unequal power with ambiguities or unclear wording resolved
in favor of the insured because it is a contract of adhesion
C. There are conditions imposed upon both the insurer and insured.
D. Indemnity is not part of an insurance contract.
✓ ~~> D. Indemnity is not part of an insurance contract.
Master01 | September, 2024/2025 | Latest update
, 2 | P a g e | © copyright 2024/2025 | Grade A+
An insurance contract may contain a "gray area" or an ambiguity, that is
generally resolved in favor of the insured because insurance policies are
contracts of:
A.Indemnity
B.Cohesion
C.Adhesion
D.Conditions
✓ ~~> C.Adhesion
If an insured sells his car to another person, the buyer may be prohibited from
also receiving the insured's policy. This is because the insurance contract is a
contract of:
A.Personal nature
B.Indemnity
C.Adhesion
D.Actual cash value
✓ ~~> A.Personal nature
Strict or absolute liability:
A.applies to school systems.
Master01 | September, 2024/2025 | Latest update
, 3 | P a g e | © copyright 2024/2025 | Grade A+
B.must have failure to use "due care."
C.considers the actions of a prudent person.
D.is assigned by law or statute.
✓ ~~> D.is assigned by law or statute.
Jack and Connie - both 50 years old and of sound mind - agree to have Jack
burn down Connie's house for $10,000. What element of a valid contract is
missing?
A.Legal purpose
B.Competent parties
C.Consideration
D.Agreement of the parties
✓ ~~> A.Legal purpose
Risks that are insurable are:
A.Speculative risk
B.Pure risk
C.Both A & B
D.None of the above
Master01 | September, 2024/2025 | Latest update
, 4 | P a g e | © copyright 2024/2025 | Grade A+
✓ ~~> B.Pure risk
Insurance that covers the responsibility for loss arising out of policy holder's
negligence - that results in payment to a party other than the insured is:
A.Not available in Florida insurance policies
B.Fourth party claims
C.Standard property insurance
D.Liability
✓ ~~> D.Liability
The goal of insurance is to restore the insured to the same economic position
as before the covered loss occurred, this is the principle of:
A.dhesion
B.Actual Cash Value
C.Indemnity
D.Severability
✓ ~~> C.Indemnity
Liability limits may be expressed as a:
A.Aggregate Limit
Master01 | September, 2024/2025 | Latest update
ACA State farm Questions & 100% Correct
Answers
All of the following describe insurable interest EXCEPT:
A.Insurable Interest must exist at the time of the loss.
B.Insurance Interest must exist for insurance to respond
C.Show a similarity between insurance and wagering.
D.The insured would suffer an economic loss.
✓ ~~> Show a similarity between insurance and wagering.
An Insurance Policy is a contract with all of the following characteristics,
EXCEPT
A. It is a personal contract.
B. Parties are of unequal power with ambiguities or unclear wording resolved
in favor of the insured because it is a contract of adhesion
C. There are conditions imposed upon both the insurer and insured.
D. Indemnity is not part of an insurance contract.
✓ ~~> D. Indemnity is not part of an insurance contract.
Master01 | September, 2024/2025 | Latest update
, 2 | P a g e | © copyright 2024/2025 | Grade A+
An insurance contract may contain a "gray area" or an ambiguity, that is
generally resolved in favor of the insured because insurance policies are
contracts of:
A.Indemnity
B.Cohesion
C.Adhesion
D.Conditions
✓ ~~> C.Adhesion
If an insured sells his car to another person, the buyer may be prohibited from
also receiving the insured's policy. This is because the insurance contract is a
contract of:
A.Personal nature
B.Indemnity
C.Adhesion
D.Actual cash value
✓ ~~> A.Personal nature
Strict or absolute liability:
A.applies to school systems.
Master01 | September, 2024/2025 | Latest update
, 3 | P a g e | © copyright 2024/2025 | Grade A+
B.must have failure to use "due care."
C.considers the actions of a prudent person.
D.is assigned by law or statute.
✓ ~~> D.is assigned by law or statute.
Jack and Connie - both 50 years old and of sound mind - agree to have Jack
burn down Connie's house for $10,000. What element of a valid contract is
missing?
A.Legal purpose
B.Competent parties
C.Consideration
D.Agreement of the parties
✓ ~~> A.Legal purpose
Risks that are insurable are:
A.Speculative risk
B.Pure risk
C.Both A & B
D.None of the above
Master01 | September, 2024/2025 | Latest update
, 4 | P a g e | © copyright 2024/2025 | Grade A+
✓ ~~> B.Pure risk
Insurance that covers the responsibility for loss arising out of policy holder's
negligence - that results in payment to a party other than the insured is:
A.Not available in Florida insurance policies
B.Fourth party claims
C.Standard property insurance
D.Liability
✓ ~~> D.Liability
The goal of insurance is to restore the insured to the same economic position
as before the covered loss occurred, this is the principle of:
A.dhesion
B.Actual Cash Value
C.Indemnity
D.Severability
✓ ~~> C.Indemnity
Liability limits may be expressed as a:
A.Aggregate Limit
Master01 | September, 2024/2025 | Latest update
