State Farm Exam 1 COMPLETE GUIDE 2023
SCORED 100%
'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? - Ans insuring agreement
`james owns a small masonry business. his fleet of cement trucks are covered by a commercial liability policy with the following aggregate limits: 150,000/500,000$. while at a job site one of the trucks chutes cannot reach the foundation to pour so the operator adds two extra chutes extending its lengt. the chute collapses under the weight of the additional concrete injuring one of the job site worker to the tune of 35000. the loss is covered by the policy and james insurer pays the claim. what will the new limits be for the remainder of the term? - Ans $150,000/$465,000
a ______ is a law set forth by a governing body such as a state or city - Ans statutory law
a _______ insurance company allows its policyholders to enjoy dividends in the form of reduced premiums and expanded benefits - Ans private non- commercial
a building is considered vacant if less than 31% of the available square footage is occupied for ... - Ans 60 consecutive days
a direct loss - Ans physical harm to tangible property
a few weeks ago frank was involved in an accident with another car and was judged at fault. aside from his premiums increasing frank didn't worry too much about it since he had liability insurance. unfortunately yesterday frank received a notice that he is named as the defendant in a lawsuit involving the accident. franks next course of action is to - Ans immediately notify his insurer
a few weeks ago graces garage was destroyed by an out of control motorist named Zach. fortunately Zach had liability insurance with limits great enough to cover the damages but zachs insurer is giving grace the runaround negotiating the claim. grace finally files a complaint forcing the policy holder to...-issue a judgement -pay grace ore than her garage is worth -submit an answer -pay the claim in full - Ans submit an answer
a hazard is defined as - Ans something that increases the chance of a loss
a homeowners policy is called a package policy because - Ans it bundles property and liability insurance into one policy
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a moral hazard - Ans deliberate, reckless behavior because of insurance coverage.behavioral hazard. results from the policyholders conscious decision.
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 - Ans a risk retention group
accumulated depreciation - Ans the items annual depreciation multiplied by its age
actual cash value - Ans a valuation method that takes into account an items depreciation. replacement cost minus accumulated depreciation.
actual cash value - Ans replacement cost minus accumulated
adhesion - Ans one party sets the terms of the contract; the other may simply agree or not agree
after the collapse of tiffanys porch there was new codes added for building a porch.what could help in the cost - Ans ordinance or law coverage
agent - Ans receives the authority to act on behalf of another
aggregate limit - Ans two limits:
-maximum payout per occurrence -maximum payout per policy period
alan owns a landscaping business and does most of his work during the summer months. one day he arrives at work to find an enormous hole in the middle of the yard where he stored most of his lawn mowers. under which cause of loss forms would the mowers, which were consumed by the sinkhole be covered? - Ans basic, broad and special forms
aleatory - Ans of or pertaining to accidental causes; of luck or chance; unpredictable
aleatory - Ans the exectution of the contract depends on an unknown future event.
alex owns a manufacturing business creating toys for young children. some of the toys have small parts which, if used inappropriately, could cause harm to small kids. he has a blah blah - Ans product liability insurance
amy has a valuable collection of furs and jewelry stored in her home. shes concerned about a rash of recent thefts in the area and wants to add more coverage for her valuable items. which endorsement to her ho-3 policy might settle her nerves - Ans increased limits on personal property 2 / 3
an insurance applicat revealing his convictions for drunk driving to an insurer is an example of - Ans utmost good faith.
an insurer that adheres to the laws of a state but is located outside of that state is called... - Ans an foreign insurer
an insurer that obeys the laws of a country other than the U.S. is called - Ans an alien insurer
an out of control motorist smashes thru sally front yard and into her attached garage taking out lmap posts her mailbox and a gazebo. he does not carry insurance. under sallys homeowers policy which items might be covered under coverage b - Ans the lamp posts mailbox and gazebo
andy works for xyz shipping. hes been working 14 hour shifts for three weeks straight, wearing him out physically and reducing his patience with customers. when a customer chastises him for taking too long with his package, andy punches him in the face, breaking the customers nose. which type of insurance would protect xyz shipping from andys actions? - Ans employer liability insurance
annual depreciation - Ans replacement cost divided by the items useful life
answer - Ans policyholders response to a complaint
apparent authority - Ans granted when the insurer does not stop the agent from acting in a certain way, even when those actions do not adhere to the authority granted in the contract
assuming ernie holds a BOP policy with a selected per occurrence limit of 300,000$ what would ernies completed operations and general aggregate limits equal? - Ans
completed operation; 600,000$ general aggregate: 600,000$
auto no-fault laws - Ans keeps people from suing drivers for damages due to motorized vehicles
bill has bought 175,000$ in insurance coverage on his 300,000 home. which of the following statements applies to bill? - Ans bill is underinsured on his home
bill has three unruly kids. while out playing one day his eldest child decides it would be great fun to throw rocks at a neighbors home, and does so, breaking several windows.bill is responsible for the damages because of - Ans vicarious liability
binder - Ans temporary coverage for an insurance applicant until the policy is issued
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