State Farm Fire Independent Policy Exam

State Farm Fire Independent Policy Exam

2023-2024 Questions & Answers (Solved)

1. Select the false statement listed below: In the HO-3 policy,

the ALE pay- ments 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 shortest of

three time frames as dictated by the policy.

• 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:

• 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

Answer: B. Detached garage used to operate a lawnmower repair

shop

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• 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:

• 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 for theft loss to jewelry and furs is $1000

or 10% of the Coverage B limit, whichever is greater.

• 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:

• Credit Card, Bank Fund Transfer Card, Forgery and Counterfeit

Money

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

Answer: B. Fire Department Service Charges

5. In the HO-3 policy, Coverage C consists of three coverages:

Additional Living Expense 2 / 3

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:

• Person(s) listed on the Declaration Page
• Spouse, if a resident of the household
• Relatives, if residents of the household
• Any person under the age of 21 in the care of the named

insured, resident spouse, or a resident relative

• 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

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