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STATE FARM INSURANCE LICENSE
EXAM 2026 QUESTIONS AND
ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
Abandonment Condition - ANSWER-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 - ANSWER-A loss that occurs at a specific time and
place
Actual Cash Value (ACV) - ANSWER-Today's replacement cost
minus depreciation. Depreciation from wear and tear, or
obsolescence.
admitted insurer; authorized insurer - ANSWER-Company that
meets a state insurance department's standards and is allowed
to do business in that state.
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Adverse Selection - ANSWER-the tendency of insureds with a
greater than average chance of loss to purchase insurance
Annual Transit Policy - ANSWER-Nonfiled commercial inland
marine transportation form that insures a property owner's
incoming or outgoing shipments of goods during a year
Appraisal Clause - ANSWER-A survey of property to determine
the insurable value of the property or the value of the loss
sustained.
Appraisal Condition - ANSWER-Policy condition that outlines a
procedure for when the insured and insurer disagree on the
amount of a loss
Assignment - ANSWER-The legal transfer of one's interest in
an insurance policy to another person.
Aviation Hull Insurance - ANSWER-Provides coverage for
physical damage to an aircraft.
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Bailee's Customers Policy - ANSWER-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 - ANSWER-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 - ANSWER-Condition in insurance
policies that specifies that the policy cannot be transferred to
another unless the company consents to the transfer in writing.
Bailee - ANSWER-A person or organization that has temporary
possession of someone else's personal property.
Basic Perils in Homeowners Policy - ANSWER-There are 14
perils. Fire, lightening, riot, explosion, vehicles, volcanic
eruption, civil commotion, smoke, hail, aircraft, windstorm,
vandalism, malicious mischief, theft.
STATE FARM INSURANCE LICENSE
EXAM 2026 QUESTIONS AND
ANSWERS | A+ GRADED | WITH
EXPERT SOLUTIONS
Abandonment Condition - ANSWER-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 - ANSWER-A loss that occurs at a specific time and
place
Actual Cash Value (ACV) - ANSWER-Today's replacement cost
minus depreciation. Depreciation from wear and tear, or
obsolescence.
admitted insurer; authorized insurer - ANSWER-Company that
meets a state insurance department's standards and is allowed
to do business in that state.
, Page | 2
Adverse Selection - ANSWER-the tendency of insureds with a
greater than average chance of loss to purchase insurance
Annual Transit Policy - ANSWER-Nonfiled commercial inland
marine transportation form that insures a property owner's
incoming or outgoing shipments of goods during a year
Appraisal Clause - ANSWER-A survey of property to determine
the insurable value of the property or the value of the loss
sustained.
Appraisal Condition - ANSWER-Policy condition that outlines a
procedure for when the insured and insurer disagree on the
amount of a loss
Assignment - ANSWER-The legal transfer of one's interest in
an insurance policy to another person.
Aviation Hull Insurance - ANSWER-Provides coverage for
physical damage to an aircraft.
, Page | 3
Bailee's Customers Policy - ANSWER-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 - ANSWER-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 - ANSWER-Condition in insurance
policies that specifies that the policy cannot be transferred to
another unless the company consents to the transfer in writing.
Bailee - ANSWER-A person or organization that has temporary
possession of someone else's personal property.
Basic Perils in Homeowners Policy - ANSWER-There are 14
perils. Fire, lightening, riot, explosion, vehicles, volcanic
eruption, civil commotion, smoke, hail, aircraft, windstorm,
vandalism, malicious mischief, theft.
