STATE FARM INSURANCE LICENSE EXAM PREP 2026/2027 |COMPLETE
EXAM QUESTIONS AND CORRECT ANSWERS LATEST VERSION
1. What is an 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.
2. How is an Accident defined in insurance?
ANSWER A loss that occurs at a specific time and place.
3. What is Actual Cash Value (ACV)?
ANSWER Today's replacement cost minus depreciation. Depreciation from
wear and tear, or obsolescence.
4. What is an admitted insurer or authorized insurer?
ANSWER Company that meets a state insurance department's standards and is
allowed to do business in that state.
5. What is Adverse Selection?
ANSWER The tendency of insureds with a greater than average chance of loss
to purchase insurance.
6. What does an Annual Transit Policy cover?
ANSWER Nonfiled commercial inland marine transportation form that insures
a property owner's incoming or outgoing shipments of goods during a year.
7. What is an Appraisal Clause?
ANSWER A survey of property to determine the insurable value of the
property or the value of the loss sustained.
8. What is an Appraisal Condition?
, ANSWER Policy condition that outlines a procedure for when the insured and
insurer disagree on the amount of a loss.
9. What is an Assignment in insurance?
ANSWER The legal transfer of one's interest in an insurance policy to another
person.
10.What is Aviation Hull Insurance?
ANSWER Provides coverage for physical damage to an aircraft.
11.What is a 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.
12.What are 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.
13.What is an 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.
14.What is a Bailee?
ANSWER A person or organization that has temporary possession of someone
else's personal property.
15.What are the 14 Basic Perils in a Homeowners Policy?
ANSWER Fire, lightning, riot, explosion, vehicles, volcanic eruption, civil
commotion, smoke, hail, aircraft, windstorm, vandalism, malicious mischief,
and theft.
16.What is the Basic Property Policy Structure known as DICEE?
ANSWER D - Declarations, I - Insuring agreement, C - Conditions, E -
Exclusions, E - Endorsements.
17.What is Blanket Insurance?
EXAM QUESTIONS AND CORRECT ANSWERS LATEST VERSION
1. What is an 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.
2. How is an Accident defined in insurance?
ANSWER A loss that occurs at a specific time and place.
3. What is Actual Cash Value (ACV)?
ANSWER Today's replacement cost minus depreciation. Depreciation from
wear and tear, or obsolescence.
4. What is an admitted insurer or authorized insurer?
ANSWER Company that meets a state insurance department's standards and is
allowed to do business in that state.
5. What is Adverse Selection?
ANSWER The tendency of insureds with a greater than average chance of loss
to purchase insurance.
6. What does an Annual Transit Policy cover?
ANSWER Nonfiled commercial inland marine transportation form that insures
a property owner's incoming or outgoing shipments of goods during a year.
7. What is an Appraisal Clause?
ANSWER A survey of property to determine the insurable value of the
property or the value of the loss sustained.
8. What is an Appraisal Condition?
, ANSWER Policy condition that outlines a procedure for when the insured and
insurer disagree on the amount of a loss.
9. What is an Assignment in insurance?
ANSWER The legal transfer of one's interest in an insurance policy to another
person.
10.What is Aviation Hull Insurance?
ANSWER Provides coverage for physical damage to an aircraft.
11.What is a 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.
12.What are 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.
13.What is an 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.
14.What is a Bailee?
ANSWER A person or organization that has temporary possession of someone
else's personal property.
15.What are the 14 Basic Perils in a Homeowners Policy?
ANSWER Fire, lightning, riot, explosion, vehicles, volcanic eruption, civil
commotion, smoke, hail, aircraft, windstorm, vandalism, malicious mischief,
and theft.
16.What is the Basic Property Policy Structure known as DICEE?
ANSWER D - Declarations, I - Insuring agreement, C - Conditions, E -
Exclusions, E - Endorsements.
17.What is Blanket Insurance?
