State Farm Fire Independent Policy Exam
An HO-3 homeowners policy with a $250 deductible is in force and the policy limits
(Coverage A and Coverage B) are adequate to cover this damage. During a severe
windstorm, rain blows through open windows and causes the following damage:
Hardwood floor in the dining room $1,700
Water stains on the drywall $ 220
Water stains on the area rug $125
Antique vase (broken by force of wind) $375
How much should you pay on this loss? All repairs have been made.
Select the single best answer:
A. $ 0
B. $1,920
C. $2,420
D. $2,170
E. $2,045 - ANS 2170
An HO-3 policy is in force with Coverage A limits of $75,000, Coverage B limits of
$56,250 and a deductible of $500.
During a severe thunderstorm, a window is broken by hail and wind blows rain water
through the window. Rainwater damages the hardwood floor, wall paper, vertical blinds,
and an area rug. The insured presents the following claim:
Sand and finish floor $650
Remove and replace wall paper $320
Remove and replace vertical blinds $175
Replace area rug $35
All repairs are complete. How much do you owe the insured?
Select the single best answer:
A. $325
B. $645
C. $470
D. $680
E. $ 0 - ANS 680
,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 - ANS 78750
An HO-3 policy is in force. A severe windstorm blows down a large oak tree in the
insured's front yard. A portion of the tree falls upon and damages the roof of the insured
dwelling. Which of the following expenses would not be covered?
Select the single best answer:
A. $150.00 to remove the limb from the roof.
B. $500.00 to replace the tree.
C. $400.00 cut the tree up and haul it to the municipal landfill.
D. $500.00 repair roof.
E. All the above items would be covered. - ANS B. $500.00 to replace the tree.
Assume an HO-3 is in force. The insured's home is damaged by a severe windstorm
and the family is forced to move into a motel for 2 weeks. The insured provided the
following receipts. The water, electricity and telephone remained in service following the
loss.
Amount Paid Amount Normally Spent
Mortgage Payment $985 $985
Hotel Bills $1,075 $0
Water $25 $35
Electricity $125 $95
Telephone $10 $38
Cable TV $0 $29
Meals in Restaurants $505 $150
Food prepared at home $0 $210
Automobile $35 $20
, Laundry $60 $10
Dry cleaning $15 $15
How much do you owe for ALE. Do not consider a deductible.
Select the single best answer:
A. $ 253
B. $ 320
C. $1,520
D. $1,305
E. $1,248 - ANS 1248
Assume you have a HO-3 policy in force and do not have any endorsements added to
the policy. Which of the following types of loss will be covered?
Select the single best answer:
A. The home sustains structural damage due to an earthquake.
B. A landslide carries a large tree into the side of the insured home causing structural
damage.
C. The home is located in a non flood area, but following heavy rains the home sustains
structural damage from 13 inches of flood water standing in the house for three days.
D. The home is located on the western shore of Lake Michigan. The house is
condemned because the yard is subsiding and falling into the lake.
E. None of the situations are covered by the HO-3. - ANS None of the situations are
covered by the HO-3.
Bill and Mary Johnson have a HO-3 policy on their home with Coverage A limits of
$400,000 and Coverage B limits of $300,000 with a $1,000 deductible. Very high
straight-line winds struck their home, blowing down six large trees on the residence
premises. One tree fell on the split-rail fence of the rear yard, damaging 24 LF of the
fence. Another fell on a portable picnic table, destroying it. The remaining four trees
were simply blown down in the yard.
Bill and Mary submitted the following receipts for payment:
Remove tree from fence in order to repair fence (two cuts with chainsaw) $ 50
Repair 24 LF of split-rail fence ($15 per foot) $360
Remove tree debris (tree that fell on fence) from residence premises $300
Remove tree from picnic table (three cuts with chainsaw) $75
Replace picnic table (Lowe's - treated pine - assembled) $120
An HO-3 homeowners policy with a $250 deductible is in force and the policy limits
(Coverage A and Coverage B) are adequate to cover this damage. During a severe
windstorm, rain blows through open windows and causes the following damage:
Hardwood floor in the dining room $1,700
Water stains on the drywall $ 220
Water stains on the area rug $125
Antique vase (broken by force of wind) $375
How much should you pay on this loss? All repairs have been made.
Select the single best answer:
A. $ 0
B. $1,920
C. $2,420
D. $2,170
E. $2,045 - ANS 2170
An HO-3 policy is in force with Coverage A limits of $75,000, Coverage B limits of
$56,250 and a deductible of $500.
During a severe thunderstorm, a window is broken by hail and wind blows rain water
through the window. Rainwater damages the hardwood floor, wall paper, vertical blinds,
and an area rug. The insured presents the following claim:
Sand and finish floor $650
Remove and replace wall paper $320
Remove and replace vertical blinds $175
Replace area rug $35
All repairs are complete. How much do you owe the insured?
Select the single best answer:
A. $325
B. $645
C. $470
D. $680
E. $ 0 - ANS 680
,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 - ANS 78750
An HO-3 policy is in force. A severe windstorm blows down a large oak tree in the
insured's front yard. A portion of the tree falls upon and damages the roof of the insured
dwelling. Which of the following expenses would not be covered?
Select the single best answer:
A. $150.00 to remove the limb from the roof.
B. $500.00 to replace the tree.
C. $400.00 cut the tree up and haul it to the municipal landfill.
D. $500.00 repair roof.
E. All the above items would be covered. - ANS B. $500.00 to replace the tree.
Assume an HO-3 is in force. The insured's home is damaged by a severe windstorm
and the family is forced to move into a motel for 2 weeks. The insured provided the
following receipts. The water, electricity and telephone remained in service following the
loss.
Amount Paid Amount Normally Spent
Mortgage Payment $985 $985
Hotel Bills $1,075 $0
Water $25 $35
Electricity $125 $95
Telephone $10 $38
Cable TV $0 $29
Meals in Restaurants $505 $150
Food prepared at home $0 $210
Automobile $35 $20
, Laundry $60 $10
Dry cleaning $15 $15
How much do you owe for ALE. Do not consider a deductible.
Select the single best answer:
A. $ 253
B. $ 320
C. $1,520
D. $1,305
E. $1,248 - ANS 1248
Assume you have a HO-3 policy in force and do not have any endorsements added to
the policy. Which of the following types of loss will be covered?
Select the single best answer:
A. The home sustains structural damage due to an earthquake.
B. A landslide carries a large tree into the side of the insured home causing structural
damage.
C. The home is located in a non flood area, but following heavy rains the home sustains
structural damage from 13 inches of flood water standing in the house for three days.
D. The home is located on the western shore of Lake Michigan. The house is
condemned because the yard is subsiding and falling into the lake.
E. None of the situations are covered by the HO-3. - ANS None of the situations are
covered by the HO-3.
Bill and Mary Johnson have a HO-3 policy on their home with Coverage A limits of
$400,000 and Coverage B limits of $300,000 with a $1,000 deductible. Very high
straight-line winds struck their home, blowing down six large trees on the residence
premises. One tree fell on the split-rail fence of the rear yard, damaging 24 LF of the
fence. Another fell on a portable picnic table, destroying it. The remaining four trees
were simply blown down in the yard.
Bill and Mary submitted the following receipts for payment:
Remove tree from fence in order to repair fence (two cuts with chainsaw) $ 50
Repair 24 LF of split-rail fence ($15 per foot) $360
Remove tree debris (tree that fell on fence) from residence premises $300
Remove tree from picnic table (three cuts with chainsaw) $75
Replace picnic table (Lowe's - treated pine - assembled) $120
