STATE FARM INSURANCE LICENSE EXAM 2026
QUESTIONS WITH ANSWERS GRADED A+
◉ Accident. Answer: A loss that occurs at a specific time and place
◉ Actual Cash Value (ACV). Answer: Today's replacement cost minus
depreciation. Depreciation from wear and tear, or obsolescence.
◉ admitted insurer; authorized insurer. Answer: Company that
meets a state insurance department's standards and is allowed to do
business in that state.
◉ Adverse Selection. Answer: the tendency of insureds with a
greater than average chance of loss to purchase insurance
◉ Annual Transit Policy. Answer: Nonfiled commercial inland
marine transportation form that insures a property owner's
incoming or outgoing shipments of goods during a year
◉ Appraisal Clause. Answer: A survey of property to determine the
insurable value of the property or the value of the loss sustained.
,◉ Appraisal Condition. Answer: Policy condition that outlines a
procedure for when the insured and insurer disagree on the amount
of a loss
◉ Assignment. Answer: The legal transfer of one's interest in an
insurance policy to another person.
◉ Aviation Hull Insurance. Answer: Provides coverage for physical
damage to an aircraft.
◉ Bailee's Customers Policy. Answer: Nonfiled commercial inland
marine form obtained by a bailee to cover loss or damage to
customers' property in the bailee's custody without regard to
liability.
◉ Appurtenant Structures. Answer: Buildings of lesser value that are
on the same premises as the main building insured under a property
policy; they are usually covered by the policy.
◉ Assignment Condition. Answer: Condition in insurance policies
that specifies that the policy cannot be transferred to another unless
the company consents to the transfer in writing.
◉ Bailee. Answer: A person or organization that has temporary
possession of someone else's personal property.
, ◉ Basic Perils in Homeowners Policy. Answer: There are 14 perils.
Fire, lightening, riot, explosion, vehicles, volcanic eruption, civil
commotion, smoke, hail, aircraft, windstorm, vandalism, malicious
mischief, theft.
◉ Basic Property Policy Structure (DICEE). Answer: D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
◉ Blanket Insurance. Answer: Type of insurance policy that covers
more than one item of property at a single location or one or more
items of property at multiple locations
◉ Builders Risk Coverage Form. Answer: Commercial property
coverage forms that covers commercial, residential, or farm
buildings that are under construction or during remodeling.
◉ Cargo Insurance. Answer: Type of ocean marine insurance that
covers goods while they are in transit over water.
QUESTIONS WITH ANSWERS GRADED A+
◉ Accident. Answer: A loss that occurs at a specific time and place
◉ Actual Cash Value (ACV). Answer: Today's replacement cost minus
depreciation. Depreciation from wear and tear, or obsolescence.
◉ admitted insurer; authorized insurer. Answer: Company that
meets a state insurance department's standards and is allowed to do
business in that state.
◉ Adverse Selection. Answer: the tendency of insureds with a
greater than average chance of loss to purchase insurance
◉ Annual Transit Policy. Answer: Nonfiled commercial inland
marine transportation form that insures a property owner's
incoming or outgoing shipments of goods during a year
◉ Appraisal Clause. Answer: A survey of property to determine the
insurable value of the property or the value of the loss sustained.
,◉ Appraisal Condition. Answer: Policy condition that outlines a
procedure for when the insured and insurer disagree on the amount
of a loss
◉ Assignment. Answer: The legal transfer of one's interest in an
insurance policy to another person.
◉ Aviation Hull Insurance. Answer: Provides coverage for physical
damage to an aircraft.
◉ Bailee's Customers Policy. Answer: Nonfiled commercial inland
marine form obtained by a bailee to cover loss or damage to
customers' property in the bailee's custody without regard to
liability.
◉ Appurtenant Structures. Answer: Buildings of lesser value that are
on the same premises as the main building insured under a property
policy; they are usually covered by the policy.
◉ Assignment Condition. Answer: Condition in insurance policies
that specifies that the policy cannot be transferred to another unless
the company consents to the transfer in writing.
◉ Bailee. Answer: A person or organization that has temporary
possession of someone else's personal property.
, ◉ Basic Perils in Homeowners Policy. Answer: There are 14 perils.
Fire, lightening, riot, explosion, vehicles, volcanic eruption, civil
commotion, smoke, hail, aircraft, windstorm, vandalism, malicious
mischief, theft.
◉ Basic Property Policy Structure (DICEE). Answer: D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
◉ Blanket Insurance. Answer: Type of insurance policy that covers
more than one item of property at a single location or one or more
items of property at multiple locations
◉ Builders Risk Coverage Form. Answer: Commercial property
coverage forms that covers commercial, residential, or farm
buildings that are under construction or during remodeling.
◉ Cargo Insurance. Answer: Type of ocean marine insurance that
covers goods while they are in transit over water.
