State Farm Fire Independent Policy Exam
COMPLETE EXAM QUESTIONS AND
ACCURATE ANSWERS |ALREADY PASSED!!
We insure Steve Smith with a HO-3 policy. Steve works at the Acme Vacuum Co. On weekends
and in the evenings he repairs vacuum cleaners in a detached building structure on the insured
premises. The building is damaged by a severe windstorm. Since Steve owns his business and
only works part time the damage will be paid under the Dwelling Extension coverage of the
policy.
True or False <<<answer>>>False
Judy Howard owns a home at 2500 Mocking Bird Lane. She had a HO-3 policy in force. She sold
the home on June 5, XX and began moving her personal property to a new residence. On June
27 a tornado damaged the personal property at the new location. Judy's policy is still in force.
She did not have a policy in force for the new location.
Select the single best answer:
A. Coverage up to the Coverage B limits applies at the new location
B. Coverage up to the Coverage B limits applies at the original location
C. Judy would have to purchase an endorsement to provide coverage for the personal property
during the moving process.
D. A and B are both correct.
,E. None of the above are correct. <<<answer>>>D. A and B are both correct.
The cooling system for the insured's freezer is damaged due to a power failure and all food in
the unit is spoiled before the insured becomes aware of the loss. You can pay for the food if
there is a HO-3 policy in force.
True or False <<<answer>>>True
Select the choice below that most accurately describes treatment of a deductible under the HO-
3 policy.
Select the single best answer:
A. The deductible may be partially absorbed.
B. The deductible may be completely absorbed.
C. The deductible is not applied to Fire Department Service Charges.
D. The deductible may be absorbed due to covered loss in excess of a coverage limit or a special
limit.
E. All the above are true. <<<answer>>>E. All the above are true.
The insured (HO-3 policy in force) is building a barn on property where he plans to build a new
home and move in the future. The property is not listed on the Declaration Page. During the
construction process he stores construction materials and supplies for the barn in his detached
garage at the insured premises. These building materials and supplies are destroyed. They are
not covered under Coverage A.
True or False <<<answer>>>True
, Chuck Bailey has a HO-3 policy with Loss Settlement Provisions of A1 & B1. After Chuck has
made repairs to Coverage A items and replaced Coverage B items, claim payment (subject to
any limit of liability) will be based upon which of the following amounts?
Select the single best answer:
A. Salvage value
B. Replacement cost
C. Market value
D. \Original purchase price
E. Actual cash value <<<answer>>>Replacement cost
In the HO-3 policy, temporary repairs:
Select the single best answer:
A. Are available for reasonable and necessary costs incurred, caused by a loss insured.
B. Provide an additional amount of insurance for temporary repairs to covered property.
C. Are to protect the property from further immediate damage or loss.
D. A, B and C are correct.
E. A and C are correct <<<answer>>>E. A and C are correct
Option ID under the HO-3 applies to:
Select the single best answer:
A. The dwelling and other building structures
COMPLETE EXAM QUESTIONS AND
ACCURATE ANSWERS |ALREADY PASSED!!
We insure Steve Smith with a HO-3 policy. Steve works at the Acme Vacuum Co. On weekends
and in the evenings he repairs vacuum cleaners in a detached building structure on the insured
premises. The building is damaged by a severe windstorm. Since Steve owns his business and
only works part time the damage will be paid under the Dwelling Extension coverage of the
policy.
True or False <<<answer>>>False
Judy Howard owns a home at 2500 Mocking Bird Lane. She had a HO-3 policy in force. She sold
the home on June 5, XX and began moving her personal property to a new residence. On June
27 a tornado damaged the personal property at the new location. Judy's policy is still in force.
She did not have a policy in force for the new location.
Select the single best answer:
A. Coverage up to the Coverage B limits applies at the new location
B. Coverage up to the Coverage B limits applies at the original location
C. Judy would have to purchase an endorsement to provide coverage for the personal property
during the moving process.
D. A and B are both correct.
,E. None of the above are correct. <<<answer>>>D. A and B are both correct.
The cooling system for the insured's freezer is damaged due to a power failure and all food in
the unit is spoiled before the insured becomes aware of the loss. You can pay for the food if
there is a HO-3 policy in force.
True or False <<<answer>>>True
Select the choice below that most accurately describes treatment of a deductible under the HO-
3 policy.
Select the single best answer:
A. The deductible may be partially absorbed.
B. The deductible may be completely absorbed.
C. The deductible is not applied to Fire Department Service Charges.
D. The deductible may be absorbed due to covered loss in excess of a coverage limit or a special
limit.
E. All the above are true. <<<answer>>>E. All the above are true.
The insured (HO-3 policy in force) is building a barn on property where he plans to build a new
home and move in the future. The property is not listed on the Declaration Page. During the
construction process he stores construction materials and supplies for the barn in his detached
garage at the insured premises. These building materials and supplies are destroyed. They are
not covered under Coverage A.
True or False <<<answer>>>True
, Chuck Bailey has a HO-3 policy with Loss Settlement Provisions of A1 & B1. After Chuck has
made repairs to Coverage A items and replaced Coverage B items, claim payment (subject to
any limit of liability) will be based upon which of the following amounts?
Select the single best answer:
A. Salvage value
B. Replacement cost
C. Market value
D. \Original purchase price
E. Actual cash value <<<answer>>>Replacement cost
In the HO-3 policy, temporary repairs:
Select the single best answer:
A. Are available for reasonable and necessary costs incurred, caused by a loss insured.
B. Provide an additional amount of insurance for temporary repairs to covered property.
C. Are to protect the property from further immediate damage or loss.
D. A, B and C are correct.
E. A and C are correct <<<answer>>>E. A and C are correct
Option ID under the HO-3 applies to:
Select the single best answer:
A. The dwelling and other building structures
