State Farm P/C 5&6 QUESTIONS AND
ANSWERS 100% RATED CORRECT
WITH 100% SURE PASS|GRADED A+
people and property - CORRECT ANSWERS A property which is vacant is described as having
an absence of
Broadens coverage - CORRECT ANSWERS What does the liberalization clause do to a
property policy?
people and property - CORRECT ANSWERS A property which is vacant is described as having
an absence of
replacement cost minus depreciation. - CORRECT ANSWERS The definition of actual cash
value is:
Three - CORRECT ANSWERS When the insurer and the insured cannot agree on the value of
a loss, the matter is submitted to disinterested parties for
resolution. Under a standard appraisal clause, how many parties are involved in determining the value
of the loss?
160,000 - CORRECT ANSWERS An insured owns an office building valued at $200,000. He
carries a deductible of $1,000. The building sustains a loss of $40,000. If the insurance policy carries an
80% coinsurance clause, how much coverage must the insured carry to ensure that the loss is paid in
full?
20,000 - CORRECT ANSWERS When a small restaurant is damaged by a tornado, the owners
are forced to close for 1 month while the property is repaired. The building suffers damages of $20,000.
The owners estimate they will lose $50,000 in business receipts. In order to keep their staff, the owners
, must continue to pay salaries totaling $5,000. Ignoring any deductible, how much of the direct loss will
the business owners policy pay?
Absolute liability - CORRECT ANSWERS Several unsupervised young children wander about
your neighborhood. Although you have fenced your yard and pool, they climb both fences and swim in
your pool. You've called their parents to complain and tell them that you will not be responsible if one of
the children is injured or killed. When a child drowns in the pool, what type of liability would apply to
you?
100,000 - CORRECT ANSWERS Bob has a liability policy in the amount of 300/500/100. How
much coverage does he have per occurrence for property
damage liability?
may take place over time. - CORRECT ANSWERS An occurrence is best described as
something that:
Replacement cost less depreciation - CORRECT ANSWERS Which of the following phrases
best describes actual cash value?
$7,000 - CORRECT ANSWERS The furniture Harold purchased 10 years ago was destroyed in
a fire. The furniture cost $9,000 when new and has depreciated by $5,000. It would cost $12,000 to
replace this furniture today. What is the actual cash value of Harold's destroyed furniture?
Wearing out clothing - CORRECT ANSWERS Which of the following events is NOT considered
an occurrence for insurance purposes?
the duties of the insured and insurance company - CORRECT ANSWERS The conditions
section of an insurance contract sets forth
list the obligations of the insured and the insurance company - CORRECT ANSWERS The
purpose of the conditions section of an insurance policy is to
ANSWERS 100% RATED CORRECT
WITH 100% SURE PASS|GRADED A+
people and property - CORRECT ANSWERS A property which is vacant is described as having
an absence of
Broadens coverage - CORRECT ANSWERS What does the liberalization clause do to a
property policy?
people and property - CORRECT ANSWERS A property which is vacant is described as having
an absence of
replacement cost minus depreciation. - CORRECT ANSWERS The definition of actual cash
value is:
Three - CORRECT ANSWERS When the insurer and the insured cannot agree on the value of
a loss, the matter is submitted to disinterested parties for
resolution. Under a standard appraisal clause, how many parties are involved in determining the value
of the loss?
160,000 - CORRECT ANSWERS An insured owns an office building valued at $200,000. He
carries a deductible of $1,000. The building sustains a loss of $40,000. If the insurance policy carries an
80% coinsurance clause, how much coverage must the insured carry to ensure that the loss is paid in
full?
20,000 - CORRECT ANSWERS When a small restaurant is damaged by a tornado, the owners
are forced to close for 1 month while the property is repaired. The building suffers damages of $20,000.
The owners estimate they will lose $50,000 in business receipts. In order to keep their staff, the owners
, must continue to pay salaries totaling $5,000. Ignoring any deductible, how much of the direct loss will
the business owners policy pay?
Absolute liability - CORRECT ANSWERS Several unsupervised young children wander about
your neighborhood. Although you have fenced your yard and pool, they climb both fences and swim in
your pool. You've called their parents to complain and tell them that you will not be responsible if one of
the children is injured or killed. When a child drowns in the pool, what type of liability would apply to
you?
100,000 - CORRECT ANSWERS Bob has a liability policy in the amount of 300/500/100. How
much coverage does he have per occurrence for property
damage liability?
may take place over time. - CORRECT ANSWERS An occurrence is best described as
something that:
Replacement cost less depreciation - CORRECT ANSWERS Which of the following phrases
best describes actual cash value?
$7,000 - CORRECT ANSWERS The furniture Harold purchased 10 years ago was destroyed in
a fire. The furniture cost $9,000 when new and has depreciated by $5,000. It would cost $12,000 to
replace this furniture today. What is the actual cash value of Harold's destroyed furniture?
Wearing out clothing - CORRECT ANSWERS Which of the following events is NOT considered
an occurrence for insurance purposes?
the duties of the insured and insurance company - CORRECT ANSWERS The conditions
section of an insurance contract sets forth
list the obligations of the insured and the insurance company - CORRECT ANSWERS The
purpose of the conditions section of an insurance policy is to
