State Farm P/C 5&6 Exam Questions And Correct Answers With
Rationales.
State Farm P/C 5 & 6 Exam – Questions 1–30
Question 1
Which of the following best describes the purpose of Property & Casualty (P/C) insurance?
A. Protect individuals and businesses against financial loss due to property damage or liability
B. Provide health coverage for illnesses
C. Cover only auto loans
D. Only insure life policies
Correct Answer: A
Rationale:
P/C insurance protects policyholders from loss due to damage to property or legal liability, covering
a broad range of personal and commercial exposures.
Question 2
Which of the following is true about homeowners insurance?
A. Provides coverage for dwelling, personal property, liability, and additional living expenses
B. Covers only the dwelling structure
C. Excludes liability entirely
D. Only applies to renters
Correct Answer: A
Rationale:
Homeowners policies offer comprehensive coverage, including personal liability and loss of use, not
just the physical structure.
Question 3
Which of the following best describes a deductible?
A. Amount the insured must pay before insurance coverage applies
B. Premium paid monthly
,C. The insurer’s total payout
D. Optional coverage
Correct Answer: A
Rationale:
A deductible reduces small claims frequency and shifts minor loss responsibility to the insured.
Question 4
Which of the following is true about liability coverage in auto insurance?
A. Pays for bodily injury and property damage caused to others
B. Covers damage to your own vehicle
C. Only pays for medical bills
D. Optional for state compliance
Correct Answer: A
Rationale:
Liability coverage protects policyholders from legal and financial responsibility for damages to
others.
Question 5
Which of the following best describes a named-peril policy?
A. Covers only the perils specifically listed in the policy
B. Covers all perils unless excluded
C. Only applies to commercial property
D. Covers liability only
Correct Answer: A
Rationale:
Named-peril policies limit coverage to explicitly listed risks, unlike open-peril policies that cover all
risks except exclusions.
Question 6
Which of the following is true regarding open-peril (all-risk) coverage?
A. Covers all risks except those specifically excluded
B. Only covers listed perils
C. Excludes liability
D. Optional for renters only
Correct Answer: A
, Rationale:
Open-peril coverage provides broader protection, shifting burden of proof for excluded risks to the
insurer.
Question 7
Which of the following is true about commercial property insurance?
A. Protects business buildings, equipment, and inventory from covered perils
B. Only covers employee injuries
C. Only applies to home offices
D. Optional for small businesses
Correct Answer: A
Rationale:
Commercial property insurance safeguards physical assets of a business from covered losses like
fire, theft, and weather damage.
Question 8
Which of the following is true about a policy limit?
A. Maximum amount an insurer will pay for a covered loss
B. Minimum deductible paid by insured
C. Optional coverage for liability
D. Premium paid annually
Correct Answer: A
Rationale:
Policy limits define the insurer’s maximum liability, ensuring both parties understand coverage
boundaries.
Question 9
Which of the following best describes collision coverage?
A. Pays for damage to your vehicle caused by a collision with another vehicle or object
B. Covers theft only
C. Covers liability to others
D. Optional for home insurance
Correct Answer: A
Rationale:
Collision coverage addresses repair or replacement costs for the insured’s vehicle after accidents.
Rationales.
State Farm P/C 5 & 6 Exam – Questions 1–30
Question 1
Which of the following best describes the purpose of Property & Casualty (P/C) insurance?
A. Protect individuals and businesses against financial loss due to property damage or liability
B. Provide health coverage for illnesses
C. Cover only auto loans
D. Only insure life policies
Correct Answer: A
Rationale:
P/C insurance protects policyholders from loss due to damage to property or legal liability, covering
a broad range of personal and commercial exposures.
Question 2
Which of the following is true about homeowners insurance?
A. Provides coverage for dwelling, personal property, liability, and additional living expenses
B. Covers only the dwelling structure
C. Excludes liability entirely
D. Only applies to renters
Correct Answer: A
Rationale:
Homeowners policies offer comprehensive coverage, including personal liability and loss of use, not
just the physical structure.
Question 3
Which of the following best describes a deductible?
A. Amount the insured must pay before insurance coverage applies
B. Premium paid monthly
,C. The insurer’s total payout
D. Optional coverage
Correct Answer: A
Rationale:
A deductible reduces small claims frequency and shifts minor loss responsibility to the insured.
Question 4
Which of the following is true about liability coverage in auto insurance?
A. Pays for bodily injury and property damage caused to others
B. Covers damage to your own vehicle
C. Only pays for medical bills
D. Optional for state compliance
Correct Answer: A
Rationale:
Liability coverage protects policyholders from legal and financial responsibility for damages to
others.
Question 5
Which of the following best describes a named-peril policy?
A. Covers only the perils specifically listed in the policy
B. Covers all perils unless excluded
C. Only applies to commercial property
D. Covers liability only
Correct Answer: A
Rationale:
Named-peril policies limit coverage to explicitly listed risks, unlike open-peril policies that cover all
risks except exclusions.
Question 6
Which of the following is true regarding open-peril (all-risk) coverage?
A. Covers all risks except those specifically excluded
B. Only covers listed perils
C. Excludes liability
D. Optional for renters only
Correct Answer: A
, Rationale:
Open-peril coverage provides broader protection, shifting burden of proof for excluded risks to the
insurer.
Question 7
Which of the following is true about commercial property insurance?
A. Protects business buildings, equipment, and inventory from covered perils
B. Only covers employee injuries
C. Only applies to home offices
D. Optional for small businesses
Correct Answer: A
Rationale:
Commercial property insurance safeguards physical assets of a business from covered losses like
fire, theft, and weather damage.
Question 8
Which of the following is true about a policy limit?
A. Maximum amount an insurer will pay for a covered loss
B. Minimum deductible paid by insured
C. Optional coverage for liability
D. Premium paid annually
Correct Answer: A
Rationale:
Policy limits define the insurer’s maximum liability, ensuring both parties understand coverage
boundaries.
Question 9
Which of the following best describes collision coverage?
A. Pays for damage to your vehicle caused by a collision with another vehicle or object
B. Covers theft only
C. Covers liability to others
D. Optional for home insurance
Correct Answer: A
Rationale:
Collision coverage addresses repair or replacement costs for the insured’s vehicle after accidents.
