STATE FARM FIRE INDEPENDENT

• | Page

STATE FARM FIRE INDEPENDENT

POLICY EXAM QUESTION S AND

ANSWERS WITH COMPLETE

SOLUTIONS 100% CORRECT

ANSWERS

Question : Select the false statement listed below: In the

HO-3 policy, the ALE payments will be made only for:

Select the single best answer:

• The shortest time necessary to repair or replace the

damaged property, but not to exceed 24 months.

• If the insured does not rebuild, the time necessary for

the insured to relocate in permanent living quarters, but not to exceed 24 months.

• ALE payments can run beyond the expiration of the

policy.

• ALE payments are limited to incurred costs for the

shorte

• ALE payments will not exceed 20% of Coverage A

limits.

• | Page

CORRECT ANSWER : E. ALE payments will not

exceed 20% of Coverage A limits.

Question : The insured has a HO-3 policy in force. All of

the losses are covered except:

Select the single best answer:

• Shed rented to a tenant, to store furniture
• Detached garage used to operate a lawnmower repair

shop

• Garage rented to the neighbor to store an antique

automobile

• Basement used as an office for insured's bookkeeping

business

• Garage (attached) rented to tenant to store fishing boat

CORRECT ANSWER : B. Detached garage used to

operate a lawnmower repair shop

Question : Jennifer Marco has a HO-3 policy, with a

Coverage B limit of $75,000, a $500 deductible, and no

• | Page

Option AI, ID, FA or JF. Which of the following statements is true concerning her personal property?

Select the single best answer:

• Coverage for personal property applies for perils listed

under Section I - Losses Insured, Coverage B - Personal Property and Section I - Additional Coverages.

• Coverage B applies only for items Jennifer owns,

while anywhere in the world.

• The limit of liability

CORRECT ANSWER : A. Coverage for personal

property applies for perils listed under Section I - Losses Insured, Coverage B - Personal Property and Section I - Additional Coverages.

Question : Under an HO-3 policy, deductibles apply to

which of the following type(s) of losses.

Select the single best answer:

• Credit Card, Bank Fund Transfer Card, Forgery and

Counterfeit Money

• | Page

• Fire Department Service Charges
• Rekey locks after keys are stolen
• Debris Removal Charges

CORRECT ANSWER : B. Fire Department Service

Charges

Question : In the HO-3 policy, Coverage C consists of

three coverages:

Additional Living Expense Fair Rental Value Property Removed True or False

CORRECT ANSWER : False its Additional Living

expense, Fair rental value and prohibited use

Question : The steps in applying the deductible on a HO-3

homeowners policy are: