State Farm P/C 5&6 Exam with verified detailed answers
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A property which is vacant is described as having an absence of - ✔✔people and property
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What does the liberalization clause do to a property policy? - ✔✔Broadens coverage
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A property which is vacant is described as having an absence of - ✔✔people and property
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The definition of actual cash value is: - ✔✔replacement cost minus depreciation.
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When the insurer and the insured cannot agree on the value of a loss, the matter is
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submitted to disinterested parties for || || || ||
resolution. Under a standard appraisal clause, how many parties are involved in
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determining the value of the loss? - ✔✔Three || || || || || || ||
An insured owns an office building valued at $200,000. He carries a deductible of $1,000.
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The building sustains a loss of $40,000. If the insurance policy carries an 80% coinsurance
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clause, how much coverage must the insured carry to ensure that the loss is paid in full? -
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✔✔160,000
When a small restaurant is damaged by a tornado, the owners are forced to close for 1
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month while the property is repaired. The building suffers damages of $20,000. The owners
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estimate they will lose $50,000 in business receipts. In order to keep their staff, the owners
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must continue to pay salaries totaling $5,000. Ignoring any deductible, how much of the
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direct loss will the business owners policy pay? - ✔✔20,000
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Several unsupervised young children wander about your neighborhood. Although you have
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fenced your yard and pool, they climb both fences and swim in your pool. You've called
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, their parents to complain and tell them that you will not be responsible if one of the
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children is injured or killed. When a child drowns in the pool, what type of liability would
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apply to you? - ✔✔Absolute liability
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Bob has a liability policy in the amount of 300/500/100. How much coverage does he have
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per occurrence for property
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damage liability? - ✔✔100,000 || || ||
An occurrence is best described as something that: - ✔✔may take place over time.
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Which of the following phrases best describes actual cash value? - ✔✔Replacement cost less
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depreciation
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The furniture Harold purchased 10 years ago was destroyed in a fire. The furniture cost
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$9,000 when new and has depreciated by $5,000. It would cost $12,000 to replace this
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furniture today. What is the actual cash value of Harold's destroyed furniture? - ✔✔$7,000
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Which of the following events is NOT considered an occurrence for insurance purposes? -
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✔✔Wearing out clothing || ||
The conditions section of an insurance contract sets forth - ✔✔the duties of the insured and
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insurance company
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The purpose of the conditions section of an insurance policy is to - ✔✔list the obligations of
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the insured and the insurance company
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Which of the following terms describes a building in which no one is present but to which
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the occupants intend to return? - ✔✔Unoccupied
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A property which is vacant is described as having an absence of - ✔✔people and property
|| || || || || || || || || || || || || || ||
What does the liberalization clause do to a property policy? - ✔✔Broadens coverage
|| || || || || || || || || || || ||
A property which is vacant is described as having an absence of - ✔✔people and property
|| || || || || || || || || || || || || || ||
The definition of actual cash value is: - ✔✔replacement cost minus depreciation.
|| || || || || || || || || || ||
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? - ✔✔Three || || || || || || ||
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? -
|| || || || || || || || || || || || || || || || || ||
✔✔160,000
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? - ✔✔20,000
|| || || || || || || || ||
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? - ✔✔Absolute liability
|| || || || ||
Bob has a liability policy in the amount of 300/500/100. How much coverage does he have
|| || || || || || || || || || || || || || || ||
per occurrence for property
|| || ||
damage liability? - ✔✔100,000 || || ||
An occurrence is best described as something that: - ✔✔may take place over time.
|| || || || || || || || || || || || ||
Which of the following phrases best describes actual cash value? - ✔✔Replacement cost less
|| || || || || || || || || || || || ||
depreciation
||
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? - ✔✔$7,000
|| || || || || || || || || || || || ||
Which of the following events is NOT considered an occurrence for insurance purposes? -
|| || || || || || || || || || || || || ||
✔✔Wearing out clothing || ||
The conditions section of an insurance contract sets forth - ✔✔the duties of the insured and
|| || || || || || || || || || || || || || ||
insurance company
|| ||
The purpose of the conditions section of an insurance policy is to - ✔✔list the obligations of
|| || || || || || || || || || || || || || || ||
the insured and the insurance company
|| || || || || ||
Which of the following terms describes a building in which no one is present but to which
|| || || || || || || || || || || || || || || || ||
the occupants intend to return? - ✔✔Unoccupied
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