State Farm Prep Exam Results #1
Questions and Answers
Naples Pizza is a successful 10,000 square foot restaurant that generates close to $8
million in gross sales annually. Is this business eligible for a businessowners policy
(BOP), and why or why not?
No, because its gross sales are too high.
No, because restaurants are generally ineligible for a BOP.
Yes, because it is a successful business.
Yes, because it is less than 35,000 square feet in area. - Answers -No, because its
gross sales are too high.
While restaurants are generally eligible for a BOP and this one is within the 35,000-
square-foot limit, eligibility is restricted to businesses that generate no more than $6
million in annual gross sales.
Mrs. Lombardi's dwelling policy denied her claim for the collapse of her deck. On what
form is her dwelling policy written?
DP-1 Basic Form
DP-2 Broad Form
DP-3 Special Form
DP-4 Comprehensive Form - Answers -DP-1 Basic Form
The only dwelling forms that include coverage for collapse are the DP-2 and DP-3. The
Dwelling program does not include a DP-4 form.
All the following statements regarding the commercial inland marine policy commercial
articles floater are correct, EXCEPT:
, Theft is covered under a commercial articles floater.
The commercial articles floater is designed specifically to insure camera equipment and
musical instruments.
The commercial articles floater insures equipment used commercially or by nonprofit
organizations.
Open perils coverage applies only if the insured property is stored at the insured's
premises. - Answers -Open perils coverage applies only if the insured property is stored
at the insured's premises.
A commercial articles floater is designed to insure either camera equipment or musical
instruments used commercially or by nonprofit organizations. Open perils coverage,
which includes theft, applies wherever the property is located; there are no limitations
on the coverage territory.
The property section of a businessowners policy (BOP) provides how much coverage
for the cost of replacing or restoring electronic data that has been destroyed or
corrupted by a covered cause of loss?
up to $10,000
up to $50,000
up to $100,000
up to $500,000 - Answers -up to $10,000
The BOP provides an annual aggregate of up to $10,000 for the cost of replacing or
restoring electronic data that has been destroyed or corrupted by a covered cause of
loss.
Which of the following correctly describes "residence premises" under a homeowners
policy?
It is where the insured lives full-time and must be a single-unit dwelling.
It is where the insured lives full-time and may be either a single-unit dwelling or a multi-
unit building.
Questions and Answers
Naples Pizza is a successful 10,000 square foot restaurant that generates close to $8
million in gross sales annually. Is this business eligible for a businessowners policy
(BOP), and why or why not?
No, because its gross sales are too high.
No, because restaurants are generally ineligible for a BOP.
Yes, because it is a successful business.
Yes, because it is less than 35,000 square feet in area. - Answers -No, because its
gross sales are too high.
While restaurants are generally eligible for a BOP and this one is within the 35,000-
square-foot limit, eligibility is restricted to businesses that generate no more than $6
million in annual gross sales.
Mrs. Lombardi's dwelling policy denied her claim for the collapse of her deck. On what
form is her dwelling policy written?
DP-1 Basic Form
DP-2 Broad Form
DP-3 Special Form
DP-4 Comprehensive Form - Answers -DP-1 Basic Form
The only dwelling forms that include coverage for collapse are the DP-2 and DP-3. The
Dwelling program does not include a DP-4 form.
All the following statements regarding the commercial inland marine policy commercial
articles floater are correct, EXCEPT:
, Theft is covered under a commercial articles floater.
The commercial articles floater is designed specifically to insure camera equipment and
musical instruments.
The commercial articles floater insures equipment used commercially or by nonprofit
organizations.
Open perils coverage applies only if the insured property is stored at the insured's
premises. - Answers -Open perils coverage applies only if the insured property is stored
at the insured's premises.
A commercial articles floater is designed to insure either camera equipment or musical
instruments used commercially or by nonprofit organizations. Open perils coverage,
which includes theft, applies wherever the property is located; there are no limitations
on the coverage territory.
The property section of a businessowners policy (BOP) provides how much coverage
for the cost of replacing or restoring electronic data that has been destroyed or
corrupted by a covered cause of loss?
up to $10,000
up to $50,000
up to $100,000
up to $500,000 - Answers -up to $10,000
The BOP provides an annual aggregate of up to $10,000 for the cost of replacing or
restoring electronic data that has been destroyed or corrupted by a covered cause of
loss.
Which of the following correctly describes "residence premises" under a homeowners
policy?
It is where the insured lives full-time and must be a single-unit dwelling.
It is where the insured lives full-time and may be either a single-unit dwelling or a multi-
unit building.
