State Farm Fire Independent Policy Exam with complete solution

State Farm Fire Independent Policy Exam with complete solution 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. - 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 - 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. - 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 - 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 - 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 - 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 - 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 various job sites. Joe has no specific plans to use the lumber. The lumber is covered under Coverage A. True or False - False Under an HO-3 policy, which of the following would be a Coverage B item? Select the single best answer: A. Satellite dish bolted to the eave of the house B. Free standing gas range C. Built-in microwave oven D. Automatic garage door opener E. Water softener system - Free Standing gas range Under an HO-3 policy, which of the following would not be a Coverage A item? Select the single best answer: A. Automatic lawn sprinkler system B. Wall to wall carpet attached to the dwelling C. A new (in the box), built-in microwave oven the insured intends to install in his fishing cabin. D. A shed, on a foundation, rented to a neighbor to store the neighbor's boat E. Materials and supplies to build bookshelves in the basement of the residence premises and stored in the garage - E. Materials and supplies to build bookshelves in the basement of the residence premises and stored in the garage 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 - 2170 If a picture falls from a wall and damages an expensive statue, under the HO-3 coverage for the statue would: Select the single best answer: A. Apply under the falling object peril B. Not apply, not an insured peril C. Apply under the collapse peril D. Not apply since it should have been insured under a personal articles policy E. None of the above - not apply, not an insured peril Bill Smith constructed an awning beside his detached garage, under which he stores his small fishing boat. He screwed the framing of the awning to the fascia of the garage and supported the other side with posts set in concrete. Since the awning has no foundation, it is not considered a Coverage A item. True or False - False 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 money listed in this loss? Select the single best answer: A. $200 B. $220 C. $195 D. $185 E. None of the above - E 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.