STATE FARM ESTIMATICS EXAM QUESTIONS AND
ANSWERS (2025/2026) (VERIFIED ANSWERS)
which of the following refers to being restored to the financial condition you
were in before a loss? - ANS >>>indemnification
mark incurred 8000$ damage to his car in an accident. he received 8000$
from his insurance company and 4000$ from the other driver. by receiving
a profit from the loss, Mark is in violation of. - ANS >>>principle of
indemnity
the transfer of risk from one party to another is called - ANS >>>insurance
the principle of indemnity is designed to prevent - ANS >>>keeps the
insured from making a profit from an insured loss.
the fee paid by the insured in exchange for an insurance policy is
called a - ANS >>>premium
insurance - ANS >>>transfers risk of financial losses from one party to another
insured - ANS >>>individual or organization that pays premiums in
exchange for protection
insurer - ANS >>>company group or government agency offering financial
protection
insurance policy - ANS >>>a legally binding contract in which the insurer
agrees to take on specified risks in exchange for the insured's premiums
principle of indemnity - ANS >>>restoration to previous financial condition;
no more, no less.
what are the four qualifications of a contract - ANS >>>agreement,
consideration, competent parties, and legal purpose. must be 18 years of age
what is not a requirement for a legally binding contract - ANS >>>notarization
,when an insurer issues an insurance policy, the actual item, person or
organization that is being insured is called the - ANS >>>the risk
what is a reserve, in insurance terms - ANS >>>a pool of collected premiums
that the insurer sets aside to pay claims
,aleatory - ANS >>>of or pertaining to accidental causes; of luck or chance;
unpredictable
unilateral - ANS >>>one-sided
utmost good faith - ANS >>>both parties must act honestly and openly in
order for the contract to be valid
adhesion - ANS >>>one party sets the terms of the contract; the other may
simply agree or not agree
unilateral - ANS >>>only the insurer makes a promise to act; the insured
can void contract at any time
personal - ANS >>>the insured person is protected from losses, not the
covered property.
conditional - ANS >>>the insurer must only honor the contract if the insured
meets certain conditions.
aleatory - ANS >>>the execution of the contract depends on an unknown
future event.
an insurance applicant revealing his convictions for drunk driving to an
insurer is an example of - ANS >>>utmost good faith.
tom purchases a new car from his local car dealer. he also decides to get
insurance coverage that will pay to repair the car if he were to get into an
accident. this is because tom wants to protect - ANS >>>his own financial
interest in the car.
tom decides to purchase an insurance policy to protect his home. according
to the definition of a personal contract, which of the following most
accurately describes what tomes insurance actually protects - ANS >>>toms’
financial interest in the home
what is not true about an aleatory contract - ANS >>>in an aleatory
contract, the amount of benefit to the insured and insurer is equal.
what does D.I.C.E stand for? - ANS >>>declarations page (and definitions),
insuring agreement, conditions and exclusions (and endorsements)
'We will provide the insurance described in this policy in return for the
premium and compliance with all applicable provisions of this policy.' in which
, section of the insurance policy might this statement be found? - ANS
>>>insuring agreement
ANSWERS (2025/2026) (VERIFIED ANSWERS)
which of the following refers to being restored to the financial condition you
were in before a loss? - ANS >>>indemnification
mark incurred 8000$ damage to his car in an accident. he received 8000$
from his insurance company and 4000$ from the other driver. by receiving
a profit from the loss, Mark is in violation of. - ANS >>>principle of
indemnity
the transfer of risk from one party to another is called - ANS >>>insurance
the principle of indemnity is designed to prevent - ANS >>>keeps the
insured from making a profit from an insured loss.
the fee paid by the insured in exchange for an insurance policy is
called a - ANS >>>premium
insurance - ANS >>>transfers risk of financial losses from one party to another
insured - ANS >>>individual or organization that pays premiums in
exchange for protection
insurer - ANS >>>company group or government agency offering financial
protection
insurance policy - ANS >>>a legally binding contract in which the insurer
agrees to take on specified risks in exchange for the insured's premiums
principle of indemnity - ANS >>>restoration to previous financial condition;
no more, no less.
what are the four qualifications of a contract - ANS >>>agreement,
consideration, competent parties, and legal purpose. must be 18 years of age
what is not a requirement for a legally binding contract - ANS >>>notarization
,when an insurer issues an insurance policy, the actual item, person or
organization that is being insured is called the - ANS >>>the risk
what is a reserve, in insurance terms - ANS >>>a pool of collected premiums
that the insurer sets aside to pay claims
,aleatory - ANS >>>of or pertaining to accidental causes; of luck or chance;
unpredictable
unilateral - ANS >>>one-sided
utmost good faith - ANS >>>both parties must act honestly and openly in
order for the contract to be valid
adhesion - ANS >>>one party sets the terms of the contract; the other may
simply agree or not agree
unilateral - ANS >>>only the insurer makes a promise to act; the insured
can void contract at any time
personal - ANS >>>the insured person is protected from losses, not the
covered property.
conditional - ANS >>>the insurer must only honor the contract if the insured
meets certain conditions.
aleatory - ANS >>>the execution of the contract depends on an unknown
future event.
an insurance applicant revealing his convictions for drunk driving to an
insurer is an example of - ANS >>>utmost good faith.
tom purchases a new car from his local car dealer. he also decides to get
insurance coverage that will pay to repair the car if he were to get into an
accident. this is because tom wants to protect - ANS >>>his own financial
interest in the car.
tom decides to purchase an insurance policy to protect his home. according
to the definition of a personal contract, which of the following most
accurately describes what tomes insurance actually protects - ANS >>>toms’
financial interest in the home
what is not true about an aleatory contract - ANS >>>in an aleatory
contract, the amount of benefit to the insured and insurer is equal.
what does D.I.C.E stand for? - ANS >>>declarations page (and definitions),
insuring agreement, conditions and exclusions (and endorsements)
'We will provide the insurance described in this policy in return for the
premium and compliance with all applicable provisions of this policy.' in which
, section of the insurance policy might this statement be found? - ANS
>>>insuring agreement
