State Farm Fire Independent Policy Exam Test
Questions And Answers Verified 100% Correct
An HO-3 policy is in force with coverage A limits of $75,000. The policy has a $1,000
deductible. The house is totally destroyed by a tornado and the cost to replace the
house is $75,550 plus debris removal of $4,225 for a total claim of $79,775. All repairs
have been completed. What is the amount of your final settlement? Consider the
deductible in your calculations.
Select the single best answer:
A. $79,775
B. $78,750
C. $78,775
D. $77,750
E. $74,000 - answer 78750
Our insured has a HO-3 policy in force. The insured premises is located on the Gulf
Coast. The National Weather Bureau issued a hurricane warning affecting the insured
premises on July 18th. The insured removed antique furniture and stored it in a
warehouse 50 miles inland. The furniture was damaged by flood waters August 22nd.
We will pay for the damage to the furniture.
True or False - answer False
The insured has an HO-3 policy with a Coverage A limit of $250,000 and Option ID of
$50,000. The in-ground swimming pool, located 20 feet away from the home, is totally
destroyed by a loss insured. What is the maximum amount you can pay for pool debris
removal and replacement of the pool?
Select the single best answer:
A. $25,000
B. $31,500
C. $30,000
D. $26,250
E. $50,000 - answer 26250
In an HO-3 policy, Option AI (Additional Insured) provides coverage for:
Select the single best answer:
,A. Coverage C
B. Coverage B
C. Coverage A
D. Coverage A and Coverage B
E. Coverage A and Coverage C - answer C. Coverage A
Under an HO-3 policy with Option JF, which if the following statements is true
concerning a jewelry loss?
Select the single best answer:
A. Coverage applies only for the sixteen Section I-Losses Insured, Coverage BPersonal
Property named perils.
B. The limit of liability for theft jewelry and furs is $1,000.
C. Coverage only applies for the items listed on the schedule in the Declarations.
D. Coverage is for accidental direct physical loss or damage unless otherwise stated. -
answer D. Coverage is for accidental direct physical loss or damage unless
otherwise stated.
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
Questions And Answers Verified 100% Correct
An HO-3 policy is in force with coverage A limits of $75,000. The policy has a $1,000
deductible. The house is totally destroyed by a tornado and the cost to replace the
house is $75,550 plus debris removal of $4,225 for a total claim of $79,775. All repairs
have been completed. What is the amount of your final settlement? Consider the
deductible in your calculations.
Select the single best answer:
A. $79,775
B. $78,750
C. $78,775
D. $77,750
E. $74,000 - answer 78750
Our insured has a HO-3 policy in force. The insured premises is located on the Gulf
Coast. The National Weather Bureau issued a hurricane warning affecting the insured
premises on July 18th. The insured removed antique furniture and stored it in a
warehouse 50 miles inland. The furniture was damaged by flood waters August 22nd.
We will pay for the damage to the furniture.
True or False - answer False
The insured has an HO-3 policy with a Coverage A limit of $250,000 and Option ID of
$50,000. The in-ground swimming pool, located 20 feet away from the home, is totally
destroyed by a loss insured. What is the maximum amount you can pay for pool debris
removal and replacement of the pool?
Select the single best answer:
A. $25,000
B. $31,500
C. $30,000
D. $26,250
E. $50,000 - answer 26250
In an HO-3 policy, Option AI (Additional Insured) provides coverage for:
Select the single best answer:
,A. Coverage C
B. Coverage B
C. Coverage A
D. Coverage A and Coverage B
E. Coverage A and Coverage C - answer C. Coverage A
Under an HO-3 policy with Option JF, which if the following statements is true
concerning a jewelry loss?
Select the single best answer:
A. Coverage applies only for the sixteen Section I-Losses Insured, Coverage BPersonal
Property named perils.
B. The limit of liability for theft jewelry and furs is $1,000.
C. Coverage only applies for the items listed on the schedule in the Declarations.
D. Coverage is for accidental direct physical loss or damage unless otherwise stated. -
answer D. Coverage is for accidental direct physical loss or damage unless
otherwise stated.
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
