STATE FARM FIRE INDEPENDENT POLICY EXAM
2026 FINAL PAPER EXAM Q&A STUDY GUIDE
WITH VERIFIED SOLUTIONS
◉ Mike and Jennifer Reed have an HO -3 policy in force with $250
deductible. Lightning struck the insured's house, damaging the
house and the contents. Mike is a policeman and operates a engine
repair shop in a shed on the insured premises. Jennifer is a sales
representative and often has samples and merchandise at the house.
The following items where listed on the personal property inventory
forms submitted after the loss.
Cash in Mike's billfold $35.00
Cash in Jennifer's purse $160.00
Change in piggy bank $25.00
Hand tools used in Mike's business $780.00
Jennifer's sales samples $320.00
Mike's police uniform $375.00
4 hunting rifles $1,820.00
3 shotguns $870.00
Use the information listed above to answer the following question.
How much would you pay for the hunting rifles and shotguns listed
,in this loss? Do not consider the deductible in calculating this
answer.
Select the single best answer:
A. $2,000
B. $2,940
C. Answer: 2690
◉ Mike and Jennifer Reed have an HO -3 policy in force with $250
deductible. Lightning struck the insured's house, damaging the
house and the contents. Mike is a policeman and operates a engine
repair shop in a shed on the insured premises. Jennifer is a sales
representative and often has samples and merchandise at the house.
The following items where listed on the personal property inventory
forms submitted after the loss.
Cash in Mike's billfold $35.00
Cash in Jennifer's purse $160.00
Change in piggy bank $25.00
Hand tools used in Mike's business $780.00
Jennifer's sales samples $320.00
Mike's police uniform $375.00
4 hunting rifles $1,820.00
3 shotguns $870.00
, Use the information listed above to answer the following question.
How much of the deductible, if any, would be absorbed in this loss?
Select the single best answer:
A. $ 0
B. $100
C. $475
D. $250
E. $120. Answer: 250
◉ Lightning hits a power transformer two streets away from the risk
and knocks out the power to the entire area. The temperature is in
the 20's and our insured's home is heated by an electric furnace. The
insured has a HO-3 policy in force. ALE will be payable on this loss.
True or False. Answer: False
◉ In the HO-3 policy, resulting ALE and Fair Rental Value can be paid
for up to two weeks if use of the premises is prohibited by civil
authorities because of direct covered damage to a neighboring
premises caused by a loss insured.
True or False. Answer: True
2026 FINAL PAPER EXAM Q&A STUDY GUIDE
WITH VERIFIED SOLUTIONS
◉ Mike and Jennifer Reed have an HO -3 policy in force with $250
deductible. Lightning struck the insured's house, damaging the
house and the contents. Mike is a policeman and operates a engine
repair shop in a shed on the insured premises. Jennifer is a sales
representative and often has samples and merchandise at the house.
The following items where listed on the personal property inventory
forms submitted after the loss.
Cash in Mike's billfold $35.00
Cash in Jennifer's purse $160.00
Change in piggy bank $25.00
Hand tools used in Mike's business $780.00
Jennifer's sales samples $320.00
Mike's police uniform $375.00
4 hunting rifles $1,820.00
3 shotguns $870.00
Use the information listed above to answer the following question.
How much would you pay for the hunting rifles and shotguns listed
,in this loss? Do not consider the deductible in calculating this
answer.
Select the single best answer:
A. $2,000
B. $2,940
C. Answer: 2690
◉ Mike and Jennifer Reed have an HO -3 policy in force with $250
deductible. Lightning struck the insured's house, damaging the
house and the contents. Mike is a policeman and operates a engine
repair shop in a shed on the insured premises. Jennifer is a sales
representative and often has samples and merchandise at the house.
The following items where listed on the personal property inventory
forms submitted after the loss.
Cash in Mike's billfold $35.00
Cash in Jennifer's purse $160.00
Change in piggy bank $25.00
Hand tools used in Mike's business $780.00
Jennifer's sales samples $320.00
Mike's police uniform $375.00
4 hunting rifles $1,820.00
3 shotguns $870.00
, Use the information listed above to answer the following question.
How much of the deductible, if any, would be absorbed in this loss?
Select the single best answer:
A. $ 0
B. $100
C. $475
D. $250
E. $120. Answer: 250
◉ Lightning hits a power transformer two streets away from the risk
and knocks out the power to the entire area. The temperature is in
the 20's and our insured's home is heated by an electric furnace. The
insured has a HO-3 policy in force. ALE will be payable on this loss.
True or False. Answer: False
◉ In the HO-3 policy, resulting ALE and Fair Rental Value can be paid
for up to two weeks if use of the premises is prohibited by civil
authorities because of direct covered damage to a neighboring
premises caused by a loss insured.
True or False. Answer: True
