State Farm Insurance License Exam with precise detailed
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answers
Abandonment Condition - ✔✔A condition often contained in property insurance policies
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that states that the insured cannot abandon damaged property to the insurer and demand to
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be reimbursed for its full value.
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Accident - ✔✔A loss that occurs at a specific time and place
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Actual Cash Value (ACV) - ✔✔Today's replacement cost minus depreciation. Depreciation
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from wear and tear, or obsolescence.
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admitted insurer; authorized insurer - ✔✔Company that meets a state insurance
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department's standards and is allowed to do business in that state. || || || || || || || || || ||
Adverse Selection - ✔✔the tendency of insureds with a greater than average chance of loss
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to purchase insurance
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Annual Transit Policy - ✔✔Nonfiled commercial inland marine transportation form that
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insures a property owner's incoming or outgoing shipments of goods during a year
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Appraisal Clause - ✔✔A survey of property to determine the insurable value of the property
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or the value of the loss sustained.
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Appraisal Condition - ✔✔Policy condition that outlines a procedure for when the insured
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and insurer disagree on the amount of a loss
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,Assignment - ✔✔The legal transfer of one's interest in an insurance policy to another
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person.
Aviation Hull Insurance - ✔✔Provides coverage for physical damage to an aircraft.
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Bailee's Customers Policy - ✔✔Nonfiled commercial inland marine form obtained by a
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bailee to cover loss or damage to customers' property in the bailee's custody without regard
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to liability. ||
Appurtenant Structures - ✔✔Buildings of lesser value that are on the same premises as the
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main building insured under a property policy; they are usually covered by the policy.
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Assignment Condition - ✔✔Condition in insurance policies that specifies that the policy
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cannot be transferred to another unless the company consents to the transfer in writing.
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Bailee - ✔✔A person or organization that has temporary possession of someone else's
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personal property. ||
Basic Perils in Homeowners Policy - ✔✔There are 14 perils. Fire, lightening, riot, explosion,
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vehicles, volcanic eruption, civil commotion, smoke, hail, aircraft, windstorm, vandalism,
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malicious mischief, theft. || ||
Basic Property Policy Structure (DICEE) - ✔✔D - Declarations
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I - Insuring agreement
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C - Conditions
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E - Exclusions
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E - Endorsements
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, Blanket Insurance - ✔✔Type of insurance policy that covers more than one item of property
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at a single location or one or more items of property at multiple locations
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Builders Risk Coverage Form - ✔✔Commercial property coverage forms that covers
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commercial, residential, or farm buildings that are under construction or during || || || || || || || || || || ||
remodeling.
Cargo Insurance - ✔✔Type of ocean marine insurance that covers goods while they are in
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transit over water. || ||
Binder - ✔✔Oral or written statement that provides immediate insurance protection for a
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specified period; designed to provide temporary coverage until a policy is issued or denied.
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BOP - ✔✔Package policy designed to provide broad property and liability coverage for small
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businesses; eligibility requirements are stricter than the CPP.
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Business Income Policy - ✔✔Pays for loss of income that the insured sustains due to a
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direct physical loss from a covered peril that forces the insured to suspend operations until
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the property can be repaired, rebuilt, or replaced with reasonable speed; available with or
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without extra expense coverage. || || ||
Causes of Loss Form - ✔✔Separate form used with the commercial property coverage part
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of the commercial package policy that lists covered perils and exclusions. Several different
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versions provide increasingly broader coverage from basic to broad to special.
|| || || || || || || || || ||
Condominium Association Coverage Form - ✔✔Commercial Property coverage form that || || || || || || || || || ||
covers the buildings in a condominium complex. Does not cover condominium owner's
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personal property. ||
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answers
Abandonment Condition - ✔✔A condition often contained in property insurance policies
|| || || || || || || || || || ||
that states that the insured cannot abandon damaged property to the insurer and demand to
|| || || || || || || || || || || || || ||
be reimbursed for its full value.
|| || || || || ||
Accident - ✔✔A loss that occurs at a specific time and place
|| || || || || || || || || || ||
Actual Cash Value (ACV) - ✔✔Today's replacement cost minus depreciation. Depreciation
|| || || || || || || || || || ||
from wear and tear, or obsolescence.
|| || || || ||
admitted insurer; authorized insurer - ✔✔Company that meets a state insurance
|| || || || || || || || || || ||
department's standards and is allowed to do business in that state. || || || || || || || || || ||
Adverse Selection - ✔✔the tendency of insureds with a greater than average chance of loss
|| || || || || || || || || || || || || || ||
to purchase insurance
|| ||
Annual Transit Policy - ✔✔Nonfiled commercial inland marine transportation form that
|| || || || || || || || || || ||
insures a property owner's incoming or outgoing shipments of goods during a year
|| || || || || || || || || || || ||
Appraisal Clause - ✔✔A survey of property to determine the insurable value of the property
|| || || || || || || || || || || || || ||
or the value of the loss sustained.
|| || || || || || ||
Appraisal Condition - ✔✔Policy condition that outlines a procedure for when the insured
|| || || || || || || || || || || || ||
and insurer disagree on the amount of a loss
|| || || || || || || ||
,Assignment - ✔✔The legal transfer of one's interest in an insurance policy to another
|| || || || || || || || || || || || || ||
person.
Aviation Hull Insurance - ✔✔Provides coverage for physical damage to an aircraft.
|| || || || || || || || || || ||
Bailee's Customers Policy - ✔✔Nonfiled commercial inland marine form obtained by a
|| || || || || || || || || || || ||
bailee to cover loss or damage to customers' property in the bailee's custody without regard
|| || || || || || || || || || || || || || ||
to liability. ||
Appurtenant Structures - ✔✔Buildings of lesser value that are on the same premises as the
|| || || || || || || || || || || || || || ||
main building insured under a property policy; they are usually covered by the policy.
|| || || || || || || || || || || || ||
Assignment Condition - ✔✔Condition in insurance policies that specifies that the policy
|| || || || || || || || || || || ||
cannot be transferred to another unless the company consents to the transfer in writing.
|| || || || || || || || || || || || ||
Bailee - ✔✔A person or organization that has temporary possession of someone else's
|| || || || || || || || || || || || ||
personal property. ||
Basic Perils in Homeowners Policy - ✔✔There are 14 perils. Fire, lightening, riot, explosion,
|| || || || || || || || || || || || ||
vehicles, volcanic eruption, civil commotion, smoke, hail, aircraft, windstorm, vandalism,
|| || || || || || || || || || ||
malicious mischief, theft. || ||
Basic Property Policy Structure (DICEE) - ✔✔D - Declarations
|| || || || || || || ||
I - Insuring agreement
|| || ||
C - Conditions
|| ||
E - Exclusions
|| ||
E - Endorsements
|| ||
, Blanket Insurance - ✔✔Type of insurance policy that covers more than one item of property
|| || || || || || || || || || || || || ||
at a single location or one or more items of property at multiple locations
|| || || || || || || || || || || || || ||
Builders Risk Coverage Form - ✔✔Commercial property coverage forms that covers
|| || || || || || || || || || ||
commercial, residential, or farm buildings that are under construction or during || || || || || || || || || || ||
remodeling.
Cargo Insurance - ✔✔Type of ocean marine insurance that covers goods while they are in
|| || || || || || || || || || || || || || ||
transit over water. || ||
Binder - ✔✔Oral or written statement that provides immediate insurance protection for a
|| || || || || || || || || || || || ||
specified period; designed to provide temporary coverage until a policy is issued or denied.
|| || || || || || || || || || || || ||
BOP - ✔✔Package policy designed to provide broad property and liability coverage for small
|| || || || || || || || || || || || ||
businesses; eligibility requirements are stricter than the CPP.
|| || || || || || || ||
Business Income Policy - ✔✔Pays for loss of income that the insured sustains due to a
|| || || || || || || || || || || || || || || ||
direct physical loss from a covered peril that forces the insured to suspend operations until
|| || || || || || || || || || || || || || ||
the property can be repaired, rebuilt, or replaced with reasonable speed; available with or
|| || || || || || || || || || || || || ||
without extra expense coverage. || || ||
Causes of Loss Form - ✔✔Separate form used with the commercial property coverage part
|| || || || || || || || || || || || || ||
of the commercial package policy that lists covered perils and exclusions. Several different
|| || || || || || || || || || || || ||
versions provide increasingly broader coverage from basic to broad to special.
|| || || || || || || || || ||
Condominium Association Coverage Form - ✔✔Commercial Property coverage form that || || || || || || || || || ||
covers the buildings in a condominium complex. Does not cover condominium owner's
|| || || || || || || || || || || ||
personal property. ||
