STATE FARM PROPERTY CERTIFICATION
TEST 2026 VERIFIED QUESTIONS AND
ANSWERS COMPLETE STUDY GUIDE
GRADED A+
⩥ the transfer of risk from one party to another is called.
Answer: insurance
⩥ the principle of indemnity is designed to prevent.
Answer: keeps the insured from making a profit from an insured loss.
⩥ the fee paid by the insured in exchange for an insurance policy is
called a.
Answer: premium
⩥ insurance.
Answer: transfers risk of financial losses from one party to another
⩥ insured.
Answer: individual or organization that pays premiums in exchange for
protection
,⩥ insurer.
Answer: company group or government agency offering financial
protection
⩥ insurance policy.
Answer: a legally binding contract in which the insurer agrees to take on
specified risks in exchange for the insured's premiums
⩥ principle of indemnity.
Answer: restoration to previous financial condition; no more, no less.
⩥ what are the four qualifications of a contract.
Answer: agreement, consideration, competent parties, and legal purpose.
must be 18 years of age
⩥ what is not a requirement for a legally binding contract.
Answer: notarization
⩥ when an insurer issues an insurance policy, the actual item, person or
organization that is being insured is called the.
Answer: the risk
⩥ what is a reserve, in insurance terms.
,Answer: a pool of collected premiums that the insurer sets aside to pay
claims
⩥ aleatory.
Answer: of or pertaining to accidental causes; of luck or chance;
unpredictable
⩥ unilateral.
Answer: one-sided
⩥ utmost good faith.
Answer: both parties must act honestly and openly in order for the
contract to be valid
⩥ adhesion.
Answer: one party sets the terms of the contract; the other may simply
agree or not agree
⩥ unilateral.
Answer: only the insurer makes a promise to act; the insured can void
contract at any time
⩥ personal.
, Answer: the insured person is protected from losses, not the covered
property.
⩥ conditional.
Answer: the insurer must only honor the contract if the insured meets
certain conditions.
⩥ aleatory.
Answer: the exectution of the contract depends on an unknown future
event.
⩥ an insurance applicat revealing his convictions for drunk driving to an
insurer is an example of.
Answer: utmost good faith.
⩥ tom purchases a new car from his local car dealer. he also decides to
get insurance coverage that will pay to repair the car if he were to get
into an accident. this is because tom wants to protect.
Answer: his own financial interest in the car.
⩥ tom decides to purchase an insurance policy to protect his home.
according to the definition of a personal contract, which of the following
most accurately describes what tomes insurance actually protects.
Answer: toms financial interest in thee home
TEST 2026 VERIFIED QUESTIONS AND
ANSWERS COMPLETE STUDY GUIDE
GRADED A+
⩥ the transfer of risk from one party to another is called.
Answer: insurance
⩥ the principle of indemnity is designed to prevent.
Answer: keeps the insured from making a profit from an insured loss.
⩥ the fee paid by the insured in exchange for an insurance policy is
called a.
Answer: premium
⩥ insurance.
Answer: transfers risk of financial losses from one party to another
⩥ insured.
Answer: individual or organization that pays premiums in exchange for
protection
,⩥ insurer.
Answer: company group or government agency offering financial
protection
⩥ insurance policy.
Answer: a legally binding contract in which the insurer agrees to take on
specified risks in exchange for the insured's premiums
⩥ principle of indemnity.
Answer: restoration to previous financial condition; no more, no less.
⩥ what are the four qualifications of a contract.
Answer: agreement, consideration, competent parties, and legal purpose.
must be 18 years of age
⩥ what is not a requirement for a legally binding contract.
Answer: notarization
⩥ when an insurer issues an insurance policy, the actual item, person or
organization that is being insured is called the.
Answer: the risk
⩥ what is a reserve, in insurance terms.
,Answer: a pool of collected premiums that the insurer sets aside to pay
claims
⩥ aleatory.
Answer: of or pertaining to accidental causes; of luck or chance;
unpredictable
⩥ unilateral.
Answer: one-sided
⩥ utmost good faith.
Answer: both parties must act honestly and openly in order for the
contract to be valid
⩥ adhesion.
Answer: one party sets the terms of the contract; the other may simply
agree or not agree
⩥ unilateral.
Answer: only the insurer makes a promise to act; the insured can void
contract at any time
⩥ personal.
, Answer: the insured person is protected from losses, not the covered
property.
⩥ conditional.
Answer: the insurer must only honor the contract if the insured meets
certain conditions.
⩥ aleatory.
Answer: the exectution of the contract depends on an unknown future
event.
⩥ an insurance applicat revealing his convictions for drunk driving to an
insurer is an example of.
Answer: utmost good faith.
⩥ tom purchases a new car from his local car dealer. he also decides to
get insurance coverage that will pay to repair the car if he were to get
into an accident. this is because tom wants to protect.
Answer: his own financial interest in the car.
⩥ tom decides to purchase an insurance policy to protect his home.
according to the definition of a personal contract, which of the following
most accurately describes what tomes insurance actually protects.
Answer: toms financial interest in thee home
