Bundle
Bundle of STATE FARM exam (Graded A) Updated 2023
6 Items
State Farm State Test (Answered)
Insurance producer - ANSWER An individual or an entity authorized in writing by a lawfully qualified insurance compnay to transact, negotiate or effect con... [Show More] tracts of insurance of behalf of that insurance company. Resident Producer - ANSWER Any person that lives in kansas and is licensed to transact insurance business for at least one insurer. A Non-resident producer - ANSWER A producer that lives in some other state;they are licensed in their owen home stae and has written permission from the kansas insurance commisioner to sell in our state. Commissioner - ANSWER The insurance induster is regulated by the kansas insurance commissioner, who is elected by the people to a 4 year term in kansas Purpose of the commissioner - ANSWER The insurance commissioner administers or regulates the laws that have been passed by the legislature. The commissioner does not make or change insurance laws, but instead has the power to make reasonable rules and regulations to ensure that the laws are beng followed. Redlining - ANSWER the practice of not seeling insurance to those who live in the low-income, high-crime areas of town and is considered to be a form of unfair discrimination. Unfair Trade Practices Act - ANSWER a state law that details illegal actions performed by producers. if a producer is found guilty of any of the following actions, penalties could include licensure suspension or revocation, fines, cease and desist orders and redress of injury. Fair Credit Reporting Act - ANSWER The kansas property and casualty guarantee association provide payment for covered claims under certain insurance plicies in the event of insolvency of the insurer. All insurance companies holding certificates of authority to conduct business in kansas must be members and participate in this program through assessments. Each member is assessed a pro-rata share based on net written premiums from the previous year. the maximum assessment is 2% of net written premiums. Peril - ANSWER a specific "cause of loss" Direct loss - ANSWER The cost to repair the damaged property. The physical loss to the property, auto, etc. cause by the peril itself. The direct loss is visible physical loss. Indirect/consequential loss - ANSWER the financial loss suffered because of the "loss of use" of the covered property. the loss incurred because of the "loss of use" of the covered property. such as hotel expenses or rental care expenses. Exposure - ANSWER The amount of money the insured or compnay could conceivable incur Catastrophic - ANSWER damage, flood loss and nuclear damage are not covered by standard insurance policies because of the hgh exposure to loss if the loss were to occur Binder - ANSWER Provides immediate, temporary evidence of coverage until the policy is issured Producer responsibility - ANSWER Producers may be obligated to reimburse their company for their actions. Law of large numbers - ANSWER The larger the number, the more accurate the statistic. The data collected is separated into homogenous exposure units to get the most accurate prediction possible. Deductible - ANSWER represents the out of pocket exposure to the insured in the event of a claim. Helps to reduce claims frequency and thereby reduces the cost of the insurance policy Acual cash value (ACV) - ANSWER The replacement cost value of property less depreciation, obsolescence and deterioration. Replacement cost value (RCV) - ANSWER Calculation of loss by figuring the cost to repair or replace at todays labor and material costs. Market value - ANSWER the amount to buy or sell property stated value - ANSWER pays the cost of repair up to the stated value, whichever is less, at the time that a claim is filed. Salvage Value - ANSWER Amount retained by the resell of damaged property. helps to reduce the insurers companys cost Domestic insurers - ANSWER Are strucured under the laws of this state Foreign insurers - ANSWER Are structured under the laws of another state Admitted compnaies licensed - ANSWER Authorized to do business in this state. offer mainstream coverages:such as, homeowners, auto, and crop. Non-admitted companies not licensed - ANSWER Not authorized to do business in this state. offer coverage that is unusual or rare. Such as race care coverage, insurance for a body part. You must be licensed as an excess lines broker to have the authority to conduct business with compnies in this class. Replace Value - ANSWER The actual cost to repair or replace at todays labor and material cost without allownaces for deterioration, obsolescence and depreciation. When a new homeowners or personal auto policy is issued, what is the usual length of time that a company can cancel a policy for any reason? - ANSWER 60 days Who can cancel a binder? - ANSWER The insurer When does the policy period begin? - ANSWER When the agent binds the coverage Twisting - ANSWER Replacing an existing policy to the detriment of the insured When can an agent use statistics in advertising during a sales presentation? - ANSWER when approved by their company if you are denied insurance because of your driving record, what law requires the insurance company to notify you of the reasons for denial? - ANSWER The unfair trade practices act. When an isurer whats to advertise in this state, what must they submit to the kansas insurance department? - ANSWER Copies of advertisements. What information must be included in agents' advertisements? - ANSWER The agents full name and number What is the maximum fine for an unintentional violation after an agent has been found guilty by the insurance commissioner, and placed under a cease and desist order? - ANSWER $1000 Reimbursement contract - ANSWER An insurance contract that indemnifies the insured to the actual amount of loss, or for a state amount [Show Less]
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State Farm Auto Exam 2023 Questions and Answers
Competitive Bids - ANSWER-The competitive bid process requires that two or more repairers submit competitive estimates or "bids" for a specific repair job... [Show More] . The amount of the low, complete bid is generally considered to be the "competitive" price and is used as the basis for settlement. In all cases, the vehicle owner selects the facility that will perform repairs. PCPs - ANSWER-State Farm uses a continuous survey that gives repairers the opportunity to provide information online. The repairer information is used to determine labor rates and material pricing levels that reflect prevailing prices in that area. PCPs are determined by analyzing information provided by repairers that meet the Equipment/Capabilities Criteria listed on the Repair Facility Survey form Select Service Program - ANSWER-In some market areas, repairers have been selected to participate in State Farm's Select Service Program. The program is designed to enhance claim service, increase efficiency, and afford customers an opportunity to select qualified repairers to inspect and estimate vehicle damage Paintless Dent repair - ANSWER-Paintless Dent Repair (PDR) is an industry recognized repair process that involves the removal of hail dents or other types of damage from metal exterior surface panels without disturbing the vehicle's finish. In most cases, this procedure involves the use of specialized tools to apply pressure to the backside of the panel to remove surface imperfections. Other techniques may be used to repair damage from the topside of the panel, depending on the size and location of the damage. By using either of these techniques, the technician is able to restore panel appearance which eliminates the need for refinishing the panel's surface area. The PDR process is often used to repair hail damage or other similar dents that occur when an outer panel strikes (or is struck by) an object that has not compromised the finish of the panel. Since the outer finish of the panel has not been disturbed, it eliminates the refinishing process and may allow for repairs to be completed in a more timely and cost effective manner. ICAR - ANSWER-Inter Industry Conference on Auto Collision Repair. Determining Repair Costs - ANSWER-The prices we pay for most repair operations will be determined from printed or electronic collision estimating guides and repair facility survey results. However, it is not possible to determine the cost of every repair operation from these sources. For example, when estimating a sheet metal or other repair operation, the labor estimate is based on judgment time. When estimating judgment time, it should follow what is competitive in the local market to repair the vehicle in a quality manner. Estimats are based on - ANSWER-Estimates written or approved by State Farm are based on labor rates and repair costs not to exceed what is charged by a majority of the repair market in a given area. Contracts with repairers - ANSWER-We do not enter into contracts with repairers on individual repair jobs on a fixed or "contract" repair job basis. We pay for the estimated cost of repair based on physical damage caused as a result of the loss. Freight Charges - ANSWER-Similarly, if freight charges are submitted to State Farm for payment, payment should normally be resisted. Freight charges are not considered as part of actual repair costs and are generally aligned with an expense a repairer or dealership may incur as a result of operating the repair facility business. If a circumstance arises that may warrant additional consideration, local management should contact their assigned Estimatics consultant. Minimum Cost - ANSWER-Establishing minimum costs or authority levels can provide a realistic measure of repair costs for items such as the number of hours allowed for a complete refinish job, material costs, or similar items. Publication of survey information - ANSWER-We will not knowingly violate that confidentiality by publicizing individual survey data to persons outside our organization Claims Summary - ANSWER-State Farm will pay claims based upon reasonable, competitive prices for repairs necessary to repair the vehicle in a quality manner. The policy contract and law of dam ages will assist us in determining whether certain operations are payable Non original equipment and recycled parts - ANSWER-State Farm promises satisfaction to the vehicle owner when new non - original equipment and/or recycled parts are specified on an estimate that is written or approved by State Farm or a Select Service repair facility. The State Farm promise of satisfaction relative to non -original equipment or recycled parts does not replace any quality or warranty provisions we require from repairers, non-original equipment, or recycled part suppliers. The State Farm promise of satisfaction for non- original equipment and recycled parts extends to fit, corrosion resistance, and performance qualities OEM - ANSWER-Original Equipment Manufacturer Non-OEM - ANSWER-Non-Original Equipment Manufacturer OEM Quality - ANSWER-Used, rebuilt, or reconditioned parts must be of sufficient quality relative to the part being replaced Certified Crash Related Non-OEM Parts - ANSWER-such parts are subject to certification standards developed by an organization approved by State Farm*: •Bumper components •Lighting components •Radiator supports/tie bars and associated mounting components •Outer sheet metal and plastic/composite parts The vehicle owner may request a new non-OEM crash part that is not certified. In this situation, we should pay the claim based on the part being utilized Non-OEM Delay - ANSWER-No unusual delay must occur as a result of considering non-original equipment and/or recycled parts for use in repairs If Non-OEM and Recycled parts are used in estimates - ANSWER-The vehicle owner should be notified when the prices of non-original equipment and/or recycled parts are included in the estimate as outlined in CPG 2700-275 If The non-OEM part is included on the list of suspended parts and not requested by the vehicle owner - ANSWER-The estimate should not include such part (Part Does not have to be certified) (page 22) If the Vehicle owner requests a non-OEM part that is currently under suspension - ANSWER-the estimate may include such part pursuant to certification requirements if the part is within one of the four categories requiring certification and CAPA or NSF has developed a certification standard.(In the absence of a certified part being available, a non-certified part may be used if requested by the vehicle owner.) If there are other non suspended non-OEM parts available - ANSWER-the estimate may include such part pursuant to certification requirements if the part is within one of the four categories requiring certification and CAPA or NSF has developed a certification standard.(In the absence of a certified part being available, a non-certified part may be used if requested by the vehicle owner.) [Show Less]
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State Farm Exam 2023 Questions and Answers
Who owns thier renewals - ANSWER-Independents Events that may NOT be recovered by insurance are - ANSWER-Gambling, investing, market value of home Wh... [Show More] at underlying coverages typically are required for an umbrella - ANSWER-Auto and Personal Conditions that prohibit assignments of the policy - ANSWER-Transfer of rights and duties Expectant interest are - ANSWER-Not insured Flood, power failure and earth movement are - ANSWER-Excluded on DP & HO What are the 3 principle rating factors for personal auto - ANSWER-1) safe driving record 2) annual miles driving 3) years of driving experience Fail Plan doesn't not encourage - ANSWER-Competition Loss exposures that results in a claim for monetary damage due to injury to another or damage to another's property? - ANSWER-Liability Loss Exposure The persons whose property is being insured is the - ANSWER-Insured The person seeking for damage is the - ANSWER-Claimant When the insurer cancels, the premium is refunded - ANSWER-Pro-Rata Representation can qualify as an - ANSWER-Implied Warranty Fire Dep. service charge, reason repairs and debris removal are considered what on an HO? - ANSWER-Additional Charges In an HO coverage for fair rental is included in - ANSWER-Coverage D How is combined ratio computed? - ANSWER-Adding Loss + Expense Ratio Not purchasing collision coverage for your car is an example of risk - ANSWER-Retention Not purchasing a motorboat is an example of - ANSWER-Avoidance/ elimination Installing sprinkler system in your home is an example of risk - ANSWER-Reduction Purchasing homeowners policy is an expanse of risk - ANSWER-Transfer Source of investment funds, payments for losses, reduction in financial uncertainty are considered - ANSWER-Benefits of Insurance Unintentional or intentional concealment allows the insured or insurer to - ANSWER-Rescind Personal auto policy medical pay,nets limiters are - ANSWER-Per person Personal auto liability and insured motorist limits are - ANSWER-Per occurrence Perils for inland marine are - ANSWER-Open Perils Ho medical pay,eggs coverage F does not apply to _____ or _______ acts - ANSWER-Jet Ski / intentional The intent to do or not to do something that materially affects the risk is a - ANSWER-Warranty Landslide, mine subsidence and earth tremors caused by a volcanic eruption are considered - ANSWER-Earth Movement This perilous not covered by personal lines and is also NOt considered earth movement - ANSWER-Sinkhole collapse Managing General Agents can do anything an insurer can do except - ANSWER-Settle claims In addition to common declarations and at least 2 coverage parts a commercial modular package policy must also include common - ANSWER-Conditions The mandatory coverages of a business owners policy include business income coverage, extra expense coverage, property coverage and professional liability coverage. True or False - ANSWER-False; professional liability not covered An unendorsed commercial property coverage for with no optional coverage will settle buildings - ANSWER-Actual Cash Value Business Owners Policy allow the insured to have full control of which coverages are included, is designed for large business, and covers only business property of the insured. True or False - ANSWER-False; all false A Business owners' policy differs from a CPP in that it settles ________ without any requirements for __________. - ANSWER-Replacement/ coinsurance A characteristic of a surety bond is that the obliged is liable to the surety for losses paid by the surety. True or False - ANSWER-False; the opposite Surety bonds differ from an insurance policy is that the coverage is indefinite, there are 3 parties to the contract at the surety should not sustain any loss. True or False - ANSWER-True The type of claims coverage that would pay losses which occur during the policy period and the sound up to one year after the policy termination would be - ANSWER-Loss Sustained And insured underground storage tank leaks causes environmental damage to the adjacent property, what type of commercial coverage would be needed to pay for the cleanup cost and damage? - ANSWER-Pollution Liability The terms "you" and "your" in Commercial policies refers to - ANSWER-The named insured The terms "you" and "your" in Personal lines policies refers to ______ and _______. - ANSWER-Named insureds/ resident spouse Major advantages of a commercial lines package program over purchasing the coverage on a monoline basis is - ANSWER-Convenience Commercial package policy's have a fewer exclusions and broader coverage than writing coverage as mono line. True or False - ANSWER-False; same When a state program is a companies only option available for purchasing of Worker's Compensation insurance the fun is called a - ANSWER-Monopolistic Fund Losses covered under the business income coverage form are covered if they occur at any location owned or leased to the insured. True or False - ANSWER-False; describes location or 100 feet. The insurance business automobile policy specifies that the liability coverage applies to covered automobiles with the symbol seven which means - ANSWER-Specifically Described A party to surety bond his performance bond guarantees is the - ANSWER-Surety Commercial property is typically available either as monoline coverage or in a modular program. True or False - ANSWER-True The insured would need an inland marine policy if they ship their own stock on their own trucks because stock is only covered within - ANSWER-100 feet A business owners policy would ensure a sports bar, credit union or a vacant building. True or False - ANSWER-False; none of the above The vacancy permit endorsement waves the vacancy condition for ______ during the ______. - ANSWER-Designated Perils/ Permit Period Good faith communications in insurance contracts according to the code, including these parties to the contract ______, _______ and _______ - ANSWER-Insured, insurer, and agent Punitive damage punish the _______, meant to deter others from committing ________ ________ and are ________ from coverages undEr insurance policies. - ANSWER-Wrong doer/ similar acts/ excluded The contractual phrase for assignment is - ANSWER-Transfer of rights and duties Boat owner medical payments cover - ANSWER-Permissive Occupants (passengers), insured and family Property removed under the dish and no coverage covers for what perils - ANSWER-All perils Medical doctor needs what professional liability? - ANSWER-Malpratice Section II of an HO covers host liquor. True or False - ANSWER-True Audience and law exclusion it may cause a gap in coverage when a home must be rebuilt to meet - ANSWER-Enforcement of building codes Replacement cost replaces the damage property without deduction for depreciation. True or False - ANSWER-True Intentional relinquishment of a known right is a - ANSWER-Waiver Personal injury endorsement covers malicious prosecution. True or False - ANSWER-True A person who assert a right of recovery is called the - ANSWER-Claimant According to the code all insurance contracts must be - ANSWER-In writing Power failure, ordinance or law and government action are considered what under Coverage C of a HO policy? - ANSWER-Exclusions When the insured cannot obtain insurance through the normal market due to location, they become eligible for the - ANSWER-Fairl Plan Volcanic irruption,p is a covered peril under Coverage C of an HO policy. True or False - ANSWER-True If the insurer paid 25,000, 45,000, and it 15,000 in a fraudulent claim the final would be - ANSWER-$85,000x2= $170,000 Insured for since the policy and has not been exposed to loss, the insured would receive a refund equal to the - ANSWER-Premium paid Under personal auto policy the towing and labor endorsements limit of liability is - ANSWER-Per schedule Primary difference between H03 and HO5 is - ANSWER-Coverage C perils CAARO must offer - ANSWER-Liability, medical payments and uninsured motorist Home damage by earthquake, causing fire and explosion. What, if anything, will be paid? - ANSWER-Damage by the fire and explosion only [Show Less]
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State farm Exam Questions and Answers (Graded A)
which of the following refers to being restored to the financial condition you were in before a loss? - ANSWER-indemnification mark incurred 8000$ damag... [Show More] e to his car in an accident. he received 8000$ from his insurance company and 4000$ from the other driver. by receiving a profit from the loss, Mark is in violation of.. - ANSWER-principle of indemnity the transfer of risk from one party to another is called - ANSWER-insurance the principle of indemnity is designed to prevent - ANSWER-keeps the insured from making a profit from an insured loss. the fee paid by the insured in exchange for an insurance policy is called a - ANSWER-premium insurance - ANSWER-transfers risk of financial losses from one party to another insured - ANSWER-individual or organization that pays premiums in exchange for protection insurer - ANSWER-company group or government agency offering financial protection insurance policy - ANSWER-a legally binding contract in which the insurer agrees to take on specified risks in exchange for the insured's premiums principle of indemnity - ANSWER-restoration to previous financial condition; no more, no less. what are the four qualifications of a contract - ANSWER-agreement, consideration, competent parties, and legal purpose. must be 18 years of age what is not a requirement for a legally binding contract - ANSWER-notarization when an insurer issues an insurance policy, the actual item, person or organization that is being insured is called the - ANSWER-the risk what is a reserve, in insurance terms - ANSWER-a pool of collected premiums that the insurer sets aside to pay claims aleatory - ANSWER-of or pertaining to accidental causes; of luck or chance; unpredictable unilateral - ANSWER-one-sided utmost good faith - ANSWER-both parties must act honestly and openly in order for the contract to be valid adhesion - ANSWER-one party sets the terms of the contract; the other may simply agree or not agree unilateral - ANSWER-only the insurer makes a promise to act; the insured can void contract at any time personal - ANSWER-the insured person is protected from losses, not the covered property. conditional - ANSWER-the insurer must only honor the contract if the insured meets certain conditions. aleatory - ANSWER-the exectution of the contract depends on an unknown future event. an insurance applicat revealing his convictions for drunk driving to an insurer is an example of - ANSWER-utmost good faith. tom purchases a new car from his local car dealer. he also decides to get insurance coverage that will pay to repair the car if he were to get into an accident. this is because tom wants to protect - ANSWER-his own financial interest in the car. tom decides to purchase an insurance policy to protect his home. according to the definition of a personal contract, which of the following most accurately describes what tomes insurance actually protects - ANSWER-toms financial interest in thee home what is not true about an aleatory contract - ANSWER-in an aleatory contract, the amount of benefit to the insured and insurer is equal. what does D.I.C.E stand for? - ANSWER-declarations page (and definitions), insuring agreement, conditions and exclusions (and endorsements) 'we will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy.' in which section of the insurance policy might this statement be found? - ANSWER-insuring agreement in which section of the policy might you find the following statement ? 'damage to insured property must be reported within 15 days of the damaging occurrence.' - ANSWER-conditions which of these causes of loss is least likely to be covered by a typical insurance policy? - ANSWER-nuclear hazard edna loses some of her property in a hailstorm. when an adjuster comes to investigate the loss, he gives an estimate that edna thinks is far too lowl. as negotiations continue, neither edna nor the adjuster will budge. where in Ednas policy would you find the procedure to follow in this situation? - ANSWER-conditions conditions - ANSWER-lists requirements that the insured must meet for coverage to apply declarations - ANSWER-information that makes the policy unique to a specific insured. exclusions - ANSWER-causes of loss or items of property that are not covered by the policy endorsements - ANSWER-add, reduce, or change the coverage of the policy in some way definitions - ANSWER-explains exactly what specific words mean in the context of the policy insuring agreement - ANSWER-the essence of the contract. often only a single sentence Xavier owns a small insurance company. recently the company won a bid to insure a new housing development in Omaha, NE. his company can hangle any claims that arise, but if a series of tornados were to tear through the area, destroying the entire development, Xaviers company would be hit extremely hard financially. which type of insurer could help Xaviers company protect itself the most from this potential loss? - ANSWER-a re-insurer what type of insurance provider operates on a for-profit basis? - ANSWER-mutual insurance companies what type of insurer sells shares to the public and is owned by its shareholders - ANSWER-a stock insurance company publicly traded acme insurance is listed on the new York stock exchange, and would therefore be considered - ANSWER-a non-participating insurance company. stock insurance companies - ANSWER-always for profit, publicly traded, 'non-participating' insurers: no dividends go to policy holders mutual insurance company - ANSWER-owned by policy holders (no shareholders), elect board directors, participate in dividends re-insurer - ANSWER-an insurer that provides insurance for other insurers reciprocal insurer - ANSWER-a group of ppl or organizations that insure each other. always non- profit. government insurer vs private - ANSWER-government: mandatory, run by government, suited to needs of general public private: offer insurance products based on customer preferences commercial insurer vs non-commercial - ANSWER-commercial: runs for profit non-commericial: non-profit; pass gains on to policyholders stock insurer vs mutual - ANSWER-stock: publicly traded; stockholders participate in dividends (non-participating) mutual: no stockholders; policyholders participate in dividends (participating) reciprocal insurere - ANSWER-group of people or organizations that insure each other re-insurer - ANSWER-insurance for insurers fraternal benefit society - ANSWER-non-profit, mutual aid organization that will usually offer insurance benefits to members and their families risk retention group - ANSWER-a form of insurer in which the members use their own capital to write insurance policies risk purchasing group - ANSWER-people or organizations that band together to buy insurance as a group an insurer that adheres to the laws of a state but is located outside of that state is called... - ANSWER-an foreign insurer a _______ insurance company allows its policyholders to enjoy dividends in the form of reduced premiums and expanded benefits - ANSWER-private non- commercial abc oil and gas drilling needs to purchase liability insurance to protect itself from the risks of the oil and gas drilling business. assuming that ABC O&G wants to use its own money to insure itself, effectively becoming both the insurer and the insured, through whom can ABC oil and gas dirlling purchase an insurance policy - ANSWER-a risk retention group an insurer that obeys the laws of a country other than the U.S. is called - ANSWER-an alien insurer what insurance providers uses investors money as capital against an insurance policy - ANSWER-risk retention groups two meaning of risk - ANSWER-potential loss, the insured item speculative risk - ANSWER-any risk in which gain is possible. not insurable pure risk - ANSWER-any risk in which no gain is possible. insurable exposure - ANSWER-the possibility or likelihood of damage or loss hazard - ANSWER-anything that increases exposure. ie high crime neighborhoods, smoking peril - ANSWER-the cause of damage or loss. ie lightning, hail, fire, vandals ect loss - ANSWER-reduction in value, expenses caused by a covered peril, the amount an insurer pays to settle a claim which of the following activities is a speculative risk? -parking the company truck in a dry riverbed -building a house on the beach -driving into a hail storm -betting on a horse race - ANSWER-betting on a horse race which of the following best describes a 'risk' according to the insurance definition - ANSWER-the potential for a financial loss which of the following statements applies to a speculative risk - ANSWER-a speculative risk involves a conscious choice. to an insurance company, which of the following is not an example of a risk - ANSWER-a high crime neighborhood from the point of view of an insurer, which of the following would be considered a risk - ANSWER-an automobile during a violent summer storm, a bolt of lightning hits Mr. Jones house damaging a large portion of the roof. in this case, the insurer would call the lightning bolt a - ANSWER-peril the law of large numbers - ANSWER-States that with high probability, the insurance company's average policyholder claim will be close to the true mortality risk of the entire population. ie if you flip a coin 10 times the ratio of heads to tails will most likely not be 50/50 but if you flip the coin 1000 times the ratio will get much closer to 50/50 the more times you flip. which of the following is not an insurable risk? a small town an airplane a collection of jewelry a forklift - ANSWER-a small town a hazard is defined as - ANSWER-something that increases the chance of a loss when an insurer issues an insurance policy, the actual item, person, or organization that is being insured is called - ANSWER-the risk four risk management techniques - ANSWER-risk avoidance, risk reduction, risk transference, risk retention risk avoidance - ANSWER-eliminates risk by refusing to grant policy because of poor credit or high chance of loss risk reduction - ANSWER-reduces or mitigates risk. by making a policy holder pay higher premiums or provide less coverage risk transference - ANSWER-is re-insurance: sharing risk risk retention - ANSWER-assumes or accepts risk insurer - ANSWER-the company or organization offering financial protection insured - ANSWER-the person or organization that pays premiums for financial protection. person or organization purchasing the policy first named insured - ANSWER-the first person or organization listed on the declarations page policy period - ANSWER-the dates during which the policy is in effect. period between inception and termination dates. binder - ANSWER-temporary coverage for an insurance applicant until the policy is issued warranty - ANSWER-promise or guarantee that certain conditions will be met. found on the conditions page. if a policyholder breaks a warranty, the insurer can deny coverage concealment - ANSWER-deliberately withholding relevant i [Show Less]
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State Farm Fire Independent Policy Exam 2023 with complete solutions
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 t... [Show More] ime 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 various job sites. Joe has no specific plans to use the lumber. The lumber is covered under Coverage A. True or False - ANSWER-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 - ANSWER-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 - ANSWER-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 - ANSWER-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 - ANSWER-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 - ANSWER-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 - ANSWER-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. 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. $2,500 D. $2,250 E. $2,690 - 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 An HO-3 policy is in force with coverage A limits of $75,000. The policy has a $1,000 deductible. The house is totally destroyed by a tornado and the cost to replace the house is $75,550 plus debris removal of $4,225 for a total claim of $79,775. All repairs have been completed. What is the amount of your final settlement? Consider the deductible in your calculations. Select the single best answer: A. $79,775 B. $78,750 C. $78,775 D. $77,750 E. $74,000 - ANSWER-78750 Our insured has a HO-3 policy in force. The insured premises is located on the Gulf Coast. The National Weather Bureau issued a hurricane warning affecting the insured premises on July 18th. The insured removed antique furniture and stored it in a warehouse 50 miles inland. The furniture was damaged by flood waters August 22nd. We will pay for the damage to the furniture. True or False - ANSWER-False The insured has an HO-3 policy with a Coverage A limit of $250,000 and Option ID of $50,000. The in-ground swimming pool, located 20 feet away from the home, is totally destroyed by a loss insured. What is the maximum amount you can pay for pool debris removal and replacement of the pool? Select the single best answer: A. $25,000 B. $31,500 C. $30,000 D. $26,250 E. $50,000 - ANSWER-26250 In an HO-3 policy, Option AI (Additional Insured) provides coverage for: Select the single best answer: A. Coverage C B. Coverage B C. Coverage A D. Coverage A and Coverage B E. Coverage A and Coverage C - ANSWER-C. Coverage A Under an HO-3 policy with Option JF, which if the following statements is true concerning a jewelry loss? Select the single best answer: A. Coverage applies only for the sixteen Section I-Losses Insured, Coverage B-Personal Property named perils. B. The limit of liability for theft jewelry and furs is $1,000. C. Coverage only applies for the items listed on the schedule in the Declarations. D. Coverage is for accidental direct physical loss or damage unless otherwise stated. - ANSWER-D. Coverage is for accidental direct physical loss or damage unless otherwise stated. We insure Steve Smith with a HO-3 policy. Steve works at the Acme Vacuum Co. On weekends and in the evenings he repairs vacuum cleaners in a detached building structure on the insured premises. The building is damaged by a severe windstorm. Since Steve owns his business and only works part time t [Show Less]
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State Farm Casualty Exam with correct Answers.
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