State Farm Fire Independent Policy Exam with accurate detailed solutions

State Farm Fire Independent Policy Exam with accurate
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detailed solutions ||




Select the false statement listed below: In the HO-3 policy, the ALE payments will be made
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only for: ||




Select the single best answer:
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A. The shortest time necessary to repair or replace the damaged property, but not to exceed
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24 months.
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B. If the insured does not rebuild, the time necessary for the insured to relocate in
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permanent living quarters, but not to exceed 24 months. || || || || || || || ||




C. ALE payments can run beyond the expiration of the policy.
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D. ALE payments are limited to incurred costs for the shorte - ✔✔E. ALE payments will not
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exceed 20% of Coverage A limits.
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The insured has a HO-3 policy in force. All of the losses are covered except:
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Select the single best answer:
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A. Shed rented to a tenant, to store furniture
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B. Detached garage used to operate a lawnmower repair shop
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C. Garage rented to the neighbor to store an antique automobile
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D. Basement used as an office for insured's bookkeeping business
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E. Garage (attached) rented to tenant to store fishing boat - ✔✔B. Detached garage used to
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operate a lawnmower repair shop || || || ||

,Jennifer Marco has a HO-3 policy, with a Coverage B limit of $75,000, a $500 deductible,
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and no Option AI, ID, FA or JF. Which of the following statements is true concerning her
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personal property? ||




Select the single best answer:
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A. Coverage for personal property applies for perils listed under Section I - Losses Insured,
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Coverage B - Personal Property and Section I - Additional Coverages.
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B. Coverage B applies only for items Jennifer owns, while anywhere in the world.
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C. The limit of liability - ✔✔A. Coverage for personal property applies for perils listed
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under Section I - Losses Insured, Coverage B - Personal Property and Section I - Additional
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Coverages.



Under an HO-3 policy, deductibles apply to which of the following type(s) of losses.
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Select the single best answer:
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A. Credit Card, Bank Fund Transfer Card, Forgery and Counterfeit Money
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B. Fire Department Service Charges
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C. Rekey locks after keys are stolen
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D. Debris Removal Charges - ✔✔B. Fire Department Service Charges
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In the HO-3 policy, Coverage C consists of three coverages:
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Additional Living Expense || ||




Fair Rental Value
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Property Removed ||

, True or False - ✔✔False its Additional Living expense, Fair rental value and prohibited use
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The steps in applying the deductible on a HO-3 homeowners policy are:
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1.)The deductible is first applied to the covered loss.
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2.)Any coverage or special limits are then applied to the covered loss.
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3.)The amount payable to the insured will be the greater of the amounts arrived at in steps 1
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and 2.
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True or False - ✔✔True || || || ||




The definition of an insured includes all of the following except:
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Select the single best answer: || || || ||




A. Person(s) listed on the Declaration Page
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B. Spouse, if a resident of the household
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C. Relatives, if residents of the household
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D. Any person under the age of 21 in the care of the named insured, resident spouse, or a
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resident relative ||




E. Spouse - ✔✔Spouse
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Joe Smith has a HO-3 policy. He is a carpenter and has collected 100 2"X4" studs and 30
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2"X6" rafters from various job sites. Joe has no specific plans to use the lumber. The lumber
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is covered under Coverage A.
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True or False - ✔✔False || || || ||