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STATE FARM PROPERTY EXAM
WITH 100% CORRECT ANSWER S
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Question : What is actual cash value defined as in
property insurance?
CORRECT ANSWER : Replacement cost at the time of
the loss, less depreciation
Question : Peril is most easily defined as:
CORRECT ANSWER : The cause of loss insured against
Question : What is a leading factor in the determination of
actual cash value?
CORRECT ANSWER : Replacement cost
Question : What is replacement cost defined as?
CORRECT ANSWER : Full replacement of property at
its current cost, new and without reduction for depreciation
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Question : Property insurance that provides 100k
coverage for a building and 50k coverage for personal
property at a single location is called:
CORRECT ANSWER : Specific coverage
Question : Which of the following is used in the formula
for calculating the actual cash value of a property?
CORRECT ANSWER : Replacement cost
Question : What is the purpose of the coinsurance clause
found in property insurance policies?
CORRECT ANSWER : Encourage the insured to insure
the property closer to its full value
Question : An insured has a liability policy that sets the
amount at 50k for all claims that arise from a single incident. What type of limit of liability does this insured's policy have?
CORRECT ANSWER : Per occurrence
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Question : When the amount of insurance written in a
property policy is not subject to any coinsurance provision and that amount is paid in the event of a
covered loss, the coverage is said to be written as:
CORRECT ANSWER : Stated amount
Question : What is stated amount coverage?
CORRECT ANSWER : In stated amt coverage the value
of the insured property is determined at the time the policy is written. In the event of a loss, that amount is paid without regard to any coinsurance provision.However, if the loss is less than the total, the insurer has salvage rights with the insured having first right of refusal of the salvage.
Question : What type of liability would a person who
owns a swimming pool have?
CORRECT ANSWER : Absolute
Question : What is absolute liability?
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CORRECT ANSWER : Any conduct that is inherently
dangerous imposes absolute liability. The claimant does not have to prove anything
Question : Insurable interest in the property covered in a
policy must be proven:
CORRECT ANSWER : At the time of loss
Question : Which of the following is NOT an element of
negligence?
CORRECT ANSWER : Libel
Question : What is libel?
CORRECT ANSWER : A type of intentional tort
Question : With respect to the business of insurance, a
hazard is:
CORRECT ANSWER : Any condition or exposure that
increases the possibility of loss