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