2
State Farm Property
STATE FARM PROPERTY TEST EXAM
QUESTIONS WITH VERIFIED SOLUTION |
LATEST UPDATED 2026.
In property insurance actual cash value is defined as which of the following -
CORRECT ANS Replacement cost at the time of the loss, less depreciation
Peril is most easily defined as -CORRECT ANS the cause of loss insured against
What is a leading factor in the determination of actual cash value -CORRECT ANS
replacement cost
Replacement cost is defined as -CORRECT ANS full replacement of property at its
current cost, new and without reduction for depreciation
Property insurance that provides 100k coverage for a building and 50k coverage for
personal property at a single location is called -CORRECT ANS Specific coverage
Which of the following is used in the formula for calculating the actual cash value of
a property -CORRECT ANS replacement cost
What is the purpose of the coinsurance clause found in property insurance policies?
-CORRECT ANS Encourage the insured to insure the property closer to its full
value
An insured has a liability policy that sets the amount at 50k for all claims that arise
from a single incident. which type of limit of liability does this insured's policy have?
-CORRECT ANS per occurrence
When the amount of insurance written in a property policy is not subject to any
coinsurance provision and that amount is paid in the event of a covered loss, the
coverage is said to be written as -CORRECT ANS stated amount
A+ GRADED 1
, 2
State Farm Property
What is stated amount coverage -CORRECT ANS In stated amt coverage the
value of the insured property is determined at the time the policy is written.
in the event of a loss, that amount is paid without regard to any coinsurance
provision.
However, if the loss is less than the total, the insurer has salvage rights with the
insured having first right of refusal of the salvage.
What type of liability would a person who owns a swimming pool have? -CORRECT
ANS Absolute
What is absolute liability -CORRECT ANS Any conduct that is inherently
dangerous imposes absolute liability. the claimant does not have to prove anything
Insurable interest in the property covered in a policy must be proven -CORRECT
ANS at the time of loss
Which of the following is NOT an element of negligence
breach, unbroken chain, libel, duty -CORRECT ANS libel
what is libel -CORRECT ANS a type of intentional tort
With respect to the business of insurance, a hazard is -CORRECT ANS any
condition or exposure that increases the possibility of loss
What are the four essential elements of all legal contracts -CORRECT ANS offer
and acceptance, consideration, competent parties, and legal purpose
In forming an insurance contract, when does acceptance usually occur? -CORRECT
ANS when an insurer's underwriter approves coverage
Who is responsible for filling out a notice of claim form -CORRECT ANS insured
A+ GRADED 2
State Farm Property
STATE FARM PROPERTY TEST EXAM
QUESTIONS WITH VERIFIED SOLUTION |
LATEST UPDATED 2026.
In property insurance actual cash value is defined as which of the following -
CORRECT ANS Replacement cost at the time of the loss, less depreciation
Peril is most easily defined as -CORRECT ANS the cause of loss insured against
What is a leading factor in the determination of actual cash value -CORRECT ANS
replacement cost
Replacement cost is defined as -CORRECT ANS full replacement of property at its
current cost, new and without reduction for depreciation
Property insurance that provides 100k coverage for a building and 50k coverage for
personal property at a single location is called -CORRECT ANS Specific coverage
Which of the following is used in the formula for calculating the actual cash value of
a property -CORRECT ANS replacement cost
What is the purpose of the coinsurance clause found in property insurance policies?
-CORRECT ANS Encourage the insured to insure the property closer to its full
value
An insured has a liability policy that sets the amount at 50k for all claims that arise
from a single incident. which type of limit of liability does this insured's policy have?
-CORRECT ANS per occurrence
When the amount of insurance written in a property policy is not subject to any
coinsurance provision and that amount is paid in the event of a covered loss, the
coverage is said to be written as -CORRECT ANS stated amount
A+ GRADED 1
, 2
State Farm Property
What is stated amount coverage -CORRECT ANS In stated amt coverage the
value of the insured property is determined at the time the policy is written.
in the event of a loss, that amount is paid without regard to any coinsurance
provision.
However, if the loss is less than the total, the insurer has salvage rights with the
insured having first right of refusal of the salvage.
What type of liability would a person who owns a swimming pool have? -CORRECT
ANS Absolute
What is absolute liability -CORRECT ANS Any conduct that is inherently
dangerous imposes absolute liability. the claimant does not have to prove anything
Insurable interest in the property covered in a policy must be proven -CORRECT
ANS at the time of loss
Which of the following is NOT an element of negligence
breach, unbroken chain, libel, duty -CORRECT ANS libel
what is libel -CORRECT ANS a type of intentional tort
With respect to the business of insurance, a hazard is -CORRECT ANS any
condition or exposure that increases the possibility of loss
What are the four essential elements of all legal contracts -CORRECT ANS offer
and acceptance, consideration, competent parties, and legal purpose
In forming an insurance contract, when does acceptance usually occur? -CORRECT
ANS when an insurer's underwriter approves coverage
Who is responsible for filling out a notice of claim form -CORRECT ANS insured
A+ GRADED 2
