STATE FARM FIRE INDEPENDENT POLICY EXAM
QUESTIONS AND ANSWERS UPDATED
Select the false statement listed below: In the HO-3
policy, the ALE payments will be made only for:
Select the single best answer:
A. The shortest time necessary to repair or replace the
damaged property, but not to exceed 24 months.
B. If the insured does not rebuild, the time necessary for
the insured to relocate in permanent living quarters, but
not to exceed 24 months.
C. ALE payments can run beyond the expiration of the
policy.
D. ALE payments are limited to incurred costs for the
shortest of three time frames as dictated by the policy.
E. ALE payments will not exceed 20% of Coverage A
limits. - ANSWER ->E. ALE payments will not exceed 20%
of Coverage A limits.
The insured has a HO-3 policy in force. All of the losses
are covered except:
Select the single best answer:
,A. Shed rented to a tenant, to store furniture
B. Detached garage used to operate a lawnmower repair
shop
C. Garage rented to the neighbor to store an antique
automobile
D. Basement used as an office for insured's bookkeeping
business
E. Garage (attached) rented to tenant to store fishing
boat - ANSWER ->B. Detached garage used to operate a
lawnmower repair shop
Jennifer Marco has a HO-3 policy, with a Coverage B limit
of $75,000, a $500 deductible, and no Option AI, ID, FA
or JF. Which of the following statements is true
concerning her personal property?
Select the single best answer:
A. Coverage for personal property applies for perils listed
under Section I - Losses Insured, Coverage B - Personal
Property and Section I - Additional Coverages.
B. Coverage B applies only for items Jennifer owns, while
anywhere in the world.
C. The limit of liability for theft loss to jewelry and furs is
$1000 or 10% of the Coverage B limit, whichever is
greater.
,D. The limit of liability for tornado losses to firearms is
$2,500. - ANSWER ->A. Coverage for personal property
applies for perils listed under Section I - Losses Insured,
Coverage B - Personal Property and Section I - Additional
Coverages.
Under an HO-3 policy, deductibles apply to which of the
following type(s) of losses.
Select the single best answer:
A. Credit Card, Bank Fund Transfer Card, Forgery and
Counterfeit Money
B. Fire Department Service Charges
C. Rekey locks after keys are stolen
D. Debris Removal Charges - ANSWER ->B. Fire
Department Service Charges
In the HO-3 policy, Coverage C consists of three
coverages:
Additional Living Expense
Fair Rental Value
Property Removed
True or False - ANSWER ->False its Additional Living
expense, Fair rental value and prohibited use
, The steps in applying the deductible on a HO-3
homeowners policy are:
1.)The deductible is first applied to the covered loss.
2.)Any coverage or special limits are then applied to the
covered loss.
3.)The amount payable to the insured will be the greater
of the amounts arrived at in steps 1 and 2.
True or False - ANSWER ->True
The definition of an insured includes all of the following
except:
Select the single best answer:
A. Person(s) listed on the Declaration Page
B. Spouse, if a resident of the household
C. Relatives, if residents of the household
D. Any person under the age of 21 in the care of the
named insured, resident spouse, or a resident relative
E. Spouse - ANSWER ->Spouse
Joe Smith has a HO-3 policy. He is a carpenter and has
collected 100 2"X4" studs and 30 2"X6" rafters from
QUESTIONS AND ANSWERS UPDATED
Select the false statement listed below: In the HO-3
policy, the ALE payments will be made only for:
Select the single best answer:
A. The shortest time necessary to repair or replace the
damaged property, but not to exceed 24 months.
B. If the insured does not rebuild, the time necessary for
the insured to relocate in permanent living quarters, but
not to exceed 24 months.
C. ALE payments can run beyond the expiration of the
policy.
D. ALE payments are limited to incurred costs for the
shortest of three time frames as dictated by the policy.
E. ALE payments will not exceed 20% of Coverage A
limits. - ANSWER ->E. ALE payments will not exceed 20%
of Coverage A limits.
The insured has a HO-3 policy in force. All of the losses
are covered except:
Select the single best answer:
,A. Shed rented to a tenant, to store furniture
B. Detached garage used to operate a lawnmower repair
shop
C. Garage rented to the neighbor to store an antique
automobile
D. Basement used as an office for insured's bookkeeping
business
E. Garage (attached) rented to tenant to store fishing
boat - ANSWER ->B. Detached garage used to operate a
lawnmower repair shop
Jennifer Marco has a HO-3 policy, with a Coverage B limit
of $75,000, a $500 deductible, and no Option AI, ID, FA
or JF. Which of the following statements is true
concerning her personal property?
Select the single best answer:
A. Coverage for personal property applies for perils listed
under Section I - Losses Insured, Coverage B - Personal
Property and Section I - Additional Coverages.
B. Coverage B applies only for items Jennifer owns, while
anywhere in the world.
C. The limit of liability for theft loss to jewelry and furs is
$1000 or 10% of the Coverage B limit, whichever is
greater.
,D. The limit of liability for tornado losses to firearms is
$2,500. - ANSWER ->A. Coverage for personal property
applies for perils listed under Section I - Losses Insured,
Coverage B - Personal Property and Section I - Additional
Coverages.
Under an HO-3 policy, deductibles apply to which of the
following type(s) of losses.
Select the single best answer:
A. Credit Card, Bank Fund Transfer Card, Forgery and
Counterfeit Money
B. Fire Department Service Charges
C. Rekey locks after keys are stolen
D. Debris Removal Charges - ANSWER ->B. Fire
Department Service Charges
In the HO-3 policy, Coverage C consists of three
coverages:
Additional Living Expense
Fair Rental Value
Property Removed
True or False - ANSWER ->False its Additional Living
expense, Fair rental value and prohibited use
, The steps in applying the deductible on a HO-3
homeowners policy are:
1.)The deductible is first applied to the covered loss.
2.)Any coverage or special limits are then applied to the
covered loss.
3.)The amount payable to the insured will be the greater
of the amounts arrived at in steps 1 and 2.
True or False - ANSWER ->True
The definition of an insured includes all of the following
except:
Select the single best answer:
A. Person(s) listed on the Declaration Page
B. Spouse, if a resident of the household
C. Relatives, if residents of the household
D. Any person under the age of 21 in the care of the
named insured, resident spouse, or a resident relative
E. Spouse - ANSWER ->Spouse
Joe Smith has a HO-3 policy. He is a carpenter and has
collected 100 2"X4" studs and 30 2"X6" rafters from
