State Farm Property Test | 100%
Correct Answers (2026) | Guaranteed
Success
• Peril is most easily defined as -✓✓the cause of loss insured against
• What is a leading factor in the determination of actual cash value -
✓✓replacement cost
• Replacement cost is defined as -✓✓full replacement of property at its
current cost, new and without reduction for depreciation
• Property insurance that provides 100k coverage for a building and 50k
coverage for personal property at a single location is called -✓✓Specific
coverage
• Which of the following is used in the formula for calculating the actual
cash value of a property -✓✓replacement cost
• What is the purpose of the coinsurance clause found in property
insurance policies? -✓✓Encourage the insured to insure the property
closer to its full value
• An insured has a liability policy that sets the amount at 50k for all
claims that arise from a single incident. which type of limit of liability
does this insured's policy have? -✓✓per occurrence
• When the amount of insurance written in a property policy is not
subject to any coinsurance provision and that amount is paid in the event
of a covered loss, the coverage is said to be written as -✓✓stated amount
, • What is stated amount coverage -✓✓In stated amt coverage the value
of the insured property is determined at the time the policy is written.
in the event of a loss, that amount is paid without regard to any
coinsurance provision.
However, if the loss is less than the total, the insurer has salvage rights
with the insured having first right of refusal of the salvage.
• What type of liability would a person who owns a swimming pool
have? -✓✓Absolute
• What is absolute liability -✓✓Any conduct that is inherently dangerous
imposes absolute liability. the claimant does not have to prove anything
• Insurable interest in the property covered in a policy must be proven -
✓✓at the time of loss
• Which of the following is NOT an element of negligence
breach, unbroken chain, libel, duty -✓✓libel
• what is libel -✓✓a type of intentional tort
• With respect to the business of insurance, a hazard is -✓✓any
condition or exposure that increases the possibility of loss
• What are the four essential elements of all legal contracts -✓✓offer and
acceptance, consideration, competent parties, and legal purpose
• In forming an insurance contract, when does acceptance usually occur?
-✓✓when an insurer's underwriter approves coverage
Correct Answers (2026) | Guaranteed
Success
• Peril is most easily defined as -✓✓the cause of loss insured against
• What is a leading factor in the determination of actual cash value -
✓✓replacement cost
• Replacement cost is defined as -✓✓full replacement of property at its
current cost, new and without reduction for depreciation
• Property insurance that provides 100k coverage for a building and 50k
coverage for personal property at a single location is called -✓✓Specific
coverage
• Which of the following is used in the formula for calculating the actual
cash value of a property -✓✓replacement cost
• What is the purpose of the coinsurance clause found in property
insurance policies? -✓✓Encourage the insured to insure the property
closer to its full value
• An insured has a liability policy that sets the amount at 50k for all
claims that arise from a single incident. which type of limit of liability
does this insured's policy have? -✓✓per occurrence
• When the amount of insurance written in a property policy is not
subject to any coinsurance provision and that amount is paid in the event
of a covered loss, the coverage is said to be written as -✓✓stated amount
, • What is stated amount coverage -✓✓In stated amt coverage the value
of the insured property is determined at the time the policy is written.
in the event of a loss, that amount is paid without regard to any
coinsurance provision.
However, if the loss is less than the total, the insurer has salvage rights
with the insured having first right of refusal of the salvage.
• What type of liability would a person who owns a swimming pool
have? -✓✓Absolute
• What is absolute liability -✓✓Any conduct that is inherently dangerous
imposes absolute liability. the claimant does not have to prove anything
• Insurable interest in the property covered in a policy must be proven -
✓✓at the time of loss
• Which of the following is NOT an element of negligence
breach, unbroken chain, libel, duty -✓✓libel
• what is libel -✓✓a type of intentional tort
• With respect to the business of insurance, a hazard is -✓✓any
condition or exposure that increases the possibility of loss
• What are the four essential elements of all legal contracts -✓✓offer and
acceptance, consideration, competent parties, and legal purpose
• In forming an insurance contract, when does acceptance usually occur?
-✓✓when an insurer's underwriter approves coverage
