STATE FARM INSURANCE LICENSE
EXAM QUESTIONS & ACTUAL
CORRECT ANSWERS PASSED
ALREADY GRADED A+
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
EXAM QUESTIONS & ACTUAL
CORRECT ANSWERS PASSED
ALREADY GRADED A+
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
