1 promax - Stuvia US 2025/2026
State Farm Fire Independent Policy Exam Questions with
Detailed Verified Answers (100% Correct Answers)
/Already Graded A+
Select the false statement listed below: In the HO-3 policy, the ALE
payments will be made only for:
Select the single best answer:
A. The shortest time necessary to repair or replace the damaged property,
but not to exceed 24 months.
B. If the insured does not rebuild, the time necessary for the insured to
Exampromax - Stuvia US
relocate in permanent living quarters, but not to exceed 24 months.
C. ALE payments can run beyond the expiration of the policy.
Approved By:
D. ALE payments are limited to incurred costs for the shorte
Ans: E. ALE payments will not exceed 20% of Coverage A limits.
The insured has a HO-3 policy in force. All of the losses are covered
except:
Select the single best answer:
A. Shed rented to a tenant, to store furniture
B. Detached garage used to operate a lawnmower repair shop
C. Garage rented to the neighbor to store an antique automobile
D. Basement used as an office for insured's bookkeeping business
E. Garage (attached) rented to tenant to store fishing boat
Ans: B. Detached garage used to operate a lawnmower repair shop
, 2 promax - Stuvia US 2025/2026
Jennifer Marco has a HO-3 policy, with a Coverage B limit of $75,000, a
$500 deductible, and no Option AI, ID, FA or JF. Which of the following
statements is true concerning her personal property?
Select the single best answer:
A. Coverage for personal property applies for perils listed under Section I -
Losses Insured, Coverage B - Personal Property and Section I - Additional
Coverages.
B. Coverage B applies only for items Jennifer owns, while anywhere in the
world.
C. The limit of liability
Exampromax - Stuvia US
Ans: A. Coverage for personal property applies for perils listed under
Section I - Losses Insured, Coverage B - Personal Property and Section I -
Approved By:
Additional Coverages.
Under an HO-3 policy, deductibles apply to which of the following type(s)
of losses.
Select the single best answer:
A. Credit Card, Bank Fund Transfer Card, Forgery and Counterfeit Money
B. Fire Department Service Charges
C. Rekey locks after keys are stolen
D. Debris Removal Charges
Ans: B. Fire Department Service Charges
In the HO-3 policy, Coverage C consists of three coverages:
Additional Living Expense
Fair Rental Value
, 3 promax - Stuvia US 2025/2026
Property Removed
True or False
Ans: False its Additional Living expense, Fair rental value and prohibited
use
The steps in applying the deductible on a HO-3 homeowners policy are:
1.)The deductible is first applied to the covered loss.
2.)Any coverage or special limits are then applied to the covered loss.
3.)The amount payable to the insured will be the greater of the amounts
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arrived at in steps 1 and 2.
Approved By:
True or False
Ans: True
The definition of an insured includes all of the following except:
Select the single best answer:
A. Person(s) listed on the Declaration Page
B. Spouse, if a resident of the household
C. Relatives, if residents of the household
D. Any person under the age of 21 in the care of the named insured,
resident spouse, or a resident relative
E. Spouse
Ans: Spouse
Joe Smith has a HO-3 policy. He is a carpenter and has collected 100
2"X4" studs and 30 2"X6" rafters from various job sites. Joe has no specific
plans to use the lumber. The lumber is covered under Coverage A.
State Farm Fire Independent Policy Exam Questions with
Detailed Verified Answers (100% Correct Answers)
/Already Graded A+
Select the false statement listed below: In the HO-3 policy, the ALE
payments will be made only for:
Select the single best answer:
A. The shortest time necessary to repair or replace the damaged property,
but not to exceed 24 months.
B. If the insured does not rebuild, the time necessary for the insured to
Exampromax - Stuvia US
relocate in permanent living quarters, but not to exceed 24 months.
C. ALE payments can run beyond the expiration of the policy.
Approved By:
D. ALE payments are limited to incurred costs for the shorte
Ans: E. ALE payments will not exceed 20% of Coverage A limits.
The insured has a HO-3 policy in force. All of the losses are covered
except:
Select the single best answer:
A. Shed rented to a tenant, to store furniture
B. Detached garage used to operate a lawnmower repair shop
C. Garage rented to the neighbor to store an antique automobile
D. Basement used as an office for insured's bookkeeping business
E. Garage (attached) rented to tenant to store fishing boat
Ans: B. Detached garage used to operate a lawnmower repair shop
, 2 promax - Stuvia US 2025/2026
Jennifer Marco has a HO-3 policy, with a Coverage B limit of $75,000, a
$500 deductible, and no Option AI, ID, FA or JF. Which of the following
statements is true concerning her personal property?
Select the single best answer:
A. Coverage for personal property applies for perils listed under Section I -
Losses Insured, Coverage B - Personal Property and Section I - Additional
Coverages.
B. Coverage B applies only for items Jennifer owns, while anywhere in the
world.
C. The limit of liability
Exampromax - Stuvia US
Ans: A. Coverage for personal property applies for perils listed under
Section I - Losses Insured, Coverage B - Personal Property and Section I -
Approved By:
Additional Coverages.
Under an HO-3 policy, deductibles apply to which of the following type(s)
of losses.
Select the single best answer:
A. Credit Card, Bank Fund Transfer Card, Forgery and Counterfeit Money
B. Fire Department Service Charges
C. Rekey locks after keys are stolen
D. Debris Removal Charges
Ans: B. Fire Department Service Charges
In the HO-3 policy, Coverage C consists of three coverages:
Additional Living Expense
Fair Rental Value
, 3 promax - Stuvia US 2025/2026
Property Removed
True or False
Ans: False its Additional Living expense, Fair rental value and prohibited
use
The steps in applying the deductible on a HO-3 homeowners policy are:
1.)The deductible is first applied to the covered loss.
2.)Any coverage or special limits are then applied to the covered loss.
3.)The amount payable to the insured will be the greater of the amounts
Exampromax - Stuvia US
arrived at in steps 1 and 2.
Approved By:
True or False
Ans: True
The definition of an insured includes all of the following except:
Select the single best answer:
A. Person(s) listed on the Declaration Page
B. Spouse, if a resident of the household
C. Relatives, if residents of the household
D. Any person under the age of 21 in the care of the named insured,
resident spouse, or a resident relative
E. Spouse
Ans: Spouse
Joe Smith has a HO-3 policy. He is a carpenter and has collected 100
2"X4" studs and 30 2"X6" rafters from various job sites. Joe has no specific
plans to use the lumber. The lumber is covered under Coverage A.
