State Farm Property Test | 100%
Correct Answers | Graded A+
• duties of the insurance company -✓✓1. must indemnify the insured
within 60 days of proof of loss
2. may either pay the appraised ACV of the loss or repair or replace the
damaged property
3. if the insured and insurance company disagree as the ACV of the loss
and the damaged property cannot be repaired or replaced, they each can
select an appraiser. if the appraisers disagree, they select an umpire
appraiser who will make the final determination
• the subrogation clause -✓✓states that the insurance company can
require the insured to assign (transfer) to it any legal rights which the
insured has against third parties to the insurance company at the time of
loss
• assignment clause -✓✓1. transfer of a policy to another person
2. assignment clause of property insurance policy says no assignment of
the policy is valid unless signed by an officer of the insurance company
• the other insurance clause -✓✓states that the insurance company can
either prohibit other insurance or can limit the amount of other insurance
by adding an endorsement to the policy
, • pro rata liability clause -✓✓1. applies when there are concurrent
policies. concurrent insurance is when 2 or more policies cover the same
property. it is sometimes done when insuring high value property. the
policies should be identical in all respects except face amounts
2. says that no insurance company shall be responsible for any more than
its pro rata share of the loss
• mortgagee rights -✓✓-if a mortgagee (lender) is named on the
declarations page, it acquires 3 rights in the policy:
1. 10 days notice of cancellation
2. to have the loss paid to the mortgagee
3. to provide proof of loss should the insured fail to
• salvage -✓✓-salvage is when an insurance company pays a claim, and
then the insurance company has the right to assume ownership of the
damaged property to repair it and sell it to recover part or all of the loss
-salvage value is the amount for which the insurance is able to sell the
damaged property and the amount of loss the insurance company is able
to recover
• abandonment clause -✓✓provides that no property can be abandoned
to the insurance company without its consent
• vacancy and unoccupancy clause -✓✓1. usually found only in policies
covering commercial (business) property
Correct Answers | Graded A+
• duties of the insurance company -✓✓1. must indemnify the insured
within 60 days of proof of loss
2. may either pay the appraised ACV of the loss or repair or replace the
damaged property
3. if the insured and insurance company disagree as the ACV of the loss
and the damaged property cannot be repaired or replaced, they each can
select an appraiser. if the appraisers disagree, they select an umpire
appraiser who will make the final determination
• the subrogation clause -✓✓states that the insurance company can
require the insured to assign (transfer) to it any legal rights which the
insured has against third parties to the insurance company at the time of
loss
• assignment clause -✓✓1. transfer of a policy to another person
2. assignment clause of property insurance policy says no assignment of
the policy is valid unless signed by an officer of the insurance company
• the other insurance clause -✓✓states that the insurance company can
either prohibit other insurance or can limit the amount of other insurance
by adding an endorsement to the policy
, • pro rata liability clause -✓✓1. applies when there are concurrent
policies. concurrent insurance is when 2 or more policies cover the same
property. it is sometimes done when insuring high value property. the
policies should be identical in all respects except face amounts
2. says that no insurance company shall be responsible for any more than
its pro rata share of the loss
• mortgagee rights -✓✓-if a mortgagee (lender) is named on the
declarations page, it acquires 3 rights in the policy:
1. 10 days notice of cancellation
2. to have the loss paid to the mortgagee
3. to provide proof of loss should the insured fail to
• salvage -✓✓-salvage is when an insurance company pays a claim, and
then the insurance company has the right to assume ownership of the
damaged property to repair it and sell it to recover part or all of the loss
-salvage value is the amount for which the insurance is able to sell the
damaged property and the amount of loss the insurance company is able
to recover
• abandonment clause -✓✓provides that no property can be abandoned
to the insurance company without its consent
• vacancy and unoccupancy clause -✓✓1. usually found only in policies
covering commercial (business) property
