State Farm Fire Insurance Policy Exam: Study Guide & Practice Test 2024

Page 1 of 40


State Farm Fire Independent Policy Exam |Latest

2025

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 shorte

,Page 2 of 40


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

,Page 3 of 40


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.

, Page 4 of 40


C. The limit of liability

.....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: