STATE FARM PROPERTY TEST BANK 2026
QUESTIONS AND SOLUTIONS ACCURATE
GRADED A+
⩥ duties of the insurance company.
Answer: 1. must indemnify the insured within 60 days of proof of loss
2. may either pay the appraised ACV of the loss or repair or replace the
damaged property
3. if the insured and insurance company disagree as the ACV of the loss
and the damaged property cannot be repaired or replaced, they each can
select an appraiser. if the appraisers disagree, they select an umpire
appraiser who will make the final determination
⩥ the subrogation clause.
Answer: states that the insurance company can require the insured to
assign (transfer) to it any legal rights which the insured has against third
parties to the insurance company at the time of loss
⩥ assignment clause.
Answer: 1. transfer of a policy to another person
2. assignment clause of property insurance policy says no assignment of
the policy is valid unless signed by an officer of the insurance company
, ⩥ the other insurance clause.
Answer: states that the insurance company can either prohibit other
insurance or can limit the amount of other insurance by adding an
endorsement to the policy
⩥ pro rata liability clause.
Answer: 1. applies when there are concurrent policies. concurrent
insurance is when 2 or more policies cover the same property. it is
sometimes done when insuring high value property. the policies should
be identical in all respects except face amounts
2. says that no insurance company shall be responsible for any more than
its pro rata share of the loss
⩥ mortgagee rights.
Answer: -if a mortgagee (lender) is named on the declarations page, it
acquires 3 rights in the policy:
1. 10 days notice of cancellation
2. to have the loss paid to the mortgagee
3. to provide proof of loss should the insured fail to
⩥ salvage.
Answer: -salvage is when an insurance company pays a claim, and then
the insurance company has the right to assume ownership of the
damaged property to repair it and sell it to recover part or all of the loss
QUESTIONS AND SOLUTIONS ACCURATE
GRADED A+
⩥ duties of the insurance company.
Answer: 1. must indemnify the insured within 60 days of proof of loss
2. may either pay the appraised ACV of the loss or repair or replace the
damaged property
3. if the insured and insurance company disagree as the ACV of the loss
and the damaged property cannot be repaired or replaced, they each can
select an appraiser. if the appraisers disagree, they select an umpire
appraiser who will make the final determination
⩥ the subrogation clause.
Answer: states that the insurance company can require the insured to
assign (transfer) to it any legal rights which the insured has against third
parties to the insurance company at the time of loss
⩥ assignment clause.
Answer: 1. transfer of a policy to another person
2. assignment clause of property insurance policy says no assignment of
the policy is valid unless signed by an officer of the insurance company
, ⩥ the other insurance clause.
Answer: states that the insurance company can either prohibit other
insurance or can limit the amount of other insurance by adding an
endorsement to the policy
⩥ pro rata liability clause.
Answer: 1. applies when there are concurrent policies. concurrent
insurance is when 2 or more policies cover the same property. it is
sometimes done when insuring high value property. the policies should
be identical in all respects except face amounts
2. says that no insurance company shall be responsible for any more than
its pro rata share of the loss
⩥ mortgagee rights.
Answer: -if a mortgagee (lender) is named on the declarations page, it
acquires 3 rights in the policy:
1. 10 days notice of cancellation
2. to have the loss paid to the mortgagee
3. to provide proof of loss should the insured fail to
⩥ salvage.
Answer: -salvage is when an insurance company pays a claim, and then
the insurance company has the right to assume ownership of the
damaged property to repair it and sell it to recover part or all of the loss
