State Farm Fire Independent Policy
Exam And Correct Answers 2023
Select the false statement listed below: In the HO-3 policy, the ALE payments will be
made only for:
Select the single best answer:
A. The shortest time necessary to repair or replace the damaged property, but not to
exceed 24 months.
B. If the insured does not rebuild, the time necessary for the insured to relocate in
permanent living quarters, but not to exceed 24 months.
C. ALE payments can run beyond the expiration of the policy.
D. ALE payments are limited to incurred costs for the shortest of three time frames as
dictated by the policy.
E. ALE payments will not exceed 20% of Coverage A limits. Correct Answer E. ALE
payments will not exceed 20% of Coverage A limits.
The insured has a HO-3 policy in force. All of the losses are covered except:
Select the single best answer:
A. Shed rented to a tenant, to store furniture
B. Detached garage used to operate a lawnmower repair shop
C. Garage rented to the neighbor to store an antique automobile
D. Basement used as an office for insured's bookkeeping business
E. Garage (attached) rented to tenant to store fishing boat Correct Answer B. Detached
garage used to operate a lawnmower repair shop
Jennifer Marco has a HO-3 policy, with a Coverage B limit of $75,000, a $500
deductible, and no Option AI, ID, FA or JF. Which of the following statements is true
concerning her personal property?
Select the single best answer:
A. Coverage for personal property applies for perils listed under Section I - Losses
Insured, Coverage B - Personal Property and Section I - Additional Coverages.
B. Coverage B applies only for items Jennifer owns, while anywhere in the world.
C. The limit of liability for theft loss to jewelry and furs is $1000 or 10% of the Coverage
B limit, whichever is greater.
D. The limit of liability for tornado losses to firearms is $2,500. Correct Answer A.
Coverage for personal property applies for perils listed under Section I - Losses Insured,
Coverage B - Personal Property and Section I - Additional Coverages.
Under an HO-3 policy, deductibles apply to which of the following type(s) of losses.
,Select the single best answer:
A. Credit Card, Bank Fund Transfer Card, Forgery and Counterfeit Money
B. Fire Department Service Charges
C. Rekey locks after keys are stolen
D. Debris Removal Charges Correct Answer B. Fire Department Service Charges
In the HO-3 policy, Coverage C consists of three coverages:
Additional Living Expense
Fair Rental Value
Property Removed
True or False Correct Answer False its Additional Living expense, Fair rental value and
prohibited use
The steps in applying the deductible on a HO-3 homeowners policy are:
1.)The deductible is first applied to the covered loss.
2.)Any coverage or special limits are then applied to the covered loss.
3.)The amount payable to the insured will be the greater of the amounts arrived at in
steps 1 and 2.
True or False Correct Answer True
The definition of an insured includes all of the following except:
Select the single best answer:
A. Person(s) listed on the Declaration Page
B. Spouse, if a resident of the household
C. Relatives, if residents of the household
D. Any person under the age of 21 in the care of the named insured, resident spouse, or
a resident relative
E. Spouse Correct Answer Spouse
Joe Smith has a HO-3 policy. He is a carpenter and has collected 100 2"X4" studs and
30 2"X6" rafters from various job sites. Joe has no specific plans to use the lumber. The
lumber is covered under Coverage A.
True or False Correct Answer False
Under an HO-3 policy, which of the following would be a Coverage B item?
Select the single best answer:
A. Satellite dish bolted to the eave of the house
, B. Free standing gas range
C. Built-in microwave oven
D. Automatic garage door opener
E. Water softener system Correct Answer Free Standing gas range
Under an HO-3 policy, which of the following would not be a Coverage A item?
Select the single best answer:
A. Automatic lawn sprinkler system
B. Wall to wall carpet attached to the dwelling
C. A new (in the box), built-in microwave oven the insured intends to install in his fishing
cabin.
D. A shed, on a foundation, rented to a neighbor to store the neighbor's boat
E. Materials and supplies to build bookshelves in the basement of the residence
premises and stored in the garage Correct Answer E. Materials and supplies to build
bookshelves in the basement of the residence premises and stored in the garage
An HO-3 homeowners policy with a $250 deductible is in force and the policy limits
(Coverage A and Coverage B) are adequate to cover this damage. During a severe
windstorm, rain blows through open windows and causes the following damage:
Hardwood floor in the dining room $1,700
Water stains on the drywall $ 220
Water stains on the area rug $125
Antique vase (broken by force of wind) $375
How much should you pay on this loss? All repairs have been made.
Select the single best answer:
A. $ 0
B. $1,920
C. $2,420
D. $2,170
E. $2,045 Correct Answer 2170
If a picture falls from a wall and damages an expensive statue, under the HO-3
coverage for the statue would:
Select the single best answer:
A. Apply under the falling object peril
B. Not apply, not an insured peril
C. Apply under the collapse peril
D. Not apply since it should have been insured under a personal articles policy
E. None of the above Correct Answer not apply, not an insured peril
Exam And Correct Answers 2023
Select the false statement listed below: In the HO-3 policy, the ALE payments will be
made only for:
Select the single best answer:
A. The shortest time necessary to repair or replace the damaged property, but not to
exceed 24 months.
B. If the insured does not rebuild, the time necessary for the insured to relocate in
permanent living quarters, but not to exceed 24 months.
C. ALE payments can run beyond the expiration of the policy.
D. ALE payments are limited to incurred costs for the shortest of three time frames as
dictated by the policy.
E. ALE payments will not exceed 20% of Coverage A limits. Correct Answer E. ALE
payments will not exceed 20% of Coverage A limits.
The insured has a HO-3 policy in force. All of the losses are covered except:
Select the single best answer:
A. Shed rented to a tenant, to store furniture
B. Detached garage used to operate a lawnmower repair shop
C. Garage rented to the neighbor to store an antique automobile
D. Basement used as an office for insured's bookkeeping business
E. Garage (attached) rented to tenant to store fishing boat Correct Answer B. Detached
garage used to operate a lawnmower repair shop
Jennifer Marco has a HO-3 policy, with a Coverage B limit of $75,000, a $500
deductible, and no Option AI, ID, FA or JF. Which of the following statements is true
concerning her personal property?
Select the single best answer:
A. Coverage for personal property applies for perils listed under Section I - Losses
Insured, Coverage B - Personal Property and Section I - Additional Coverages.
B. Coverage B applies only for items Jennifer owns, while anywhere in the world.
C. The limit of liability for theft loss to jewelry and furs is $1000 or 10% of the Coverage
B limit, whichever is greater.
D. The limit of liability for tornado losses to firearms is $2,500. Correct Answer A.
Coverage for personal property applies for perils listed under Section I - Losses Insured,
Coverage B - Personal Property and Section I - Additional Coverages.
Under an HO-3 policy, deductibles apply to which of the following type(s) of losses.
,Select the single best answer:
A. Credit Card, Bank Fund Transfer Card, Forgery and Counterfeit Money
B. Fire Department Service Charges
C. Rekey locks after keys are stolen
D. Debris Removal Charges Correct Answer B. Fire Department Service Charges
In the HO-3 policy, Coverage C consists of three coverages:
Additional Living Expense
Fair Rental Value
Property Removed
True or False Correct Answer False its Additional Living expense, Fair rental value and
prohibited use
The steps in applying the deductible on a HO-3 homeowners policy are:
1.)The deductible is first applied to the covered loss.
2.)Any coverage or special limits are then applied to the covered loss.
3.)The amount payable to the insured will be the greater of the amounts arrived at in
steps 1 and 2.
True or False Correct Answer True
The definition of an insured includes all of the following except:
Select the single best answer:
A. Person(s) listed on the Declaration Page
B. Spouse, if a resident of the household
C. Relatives, if residents of the household
D. Any person under the age of 21 in the care of the named insured, resident spouse, or
a resident relative
E. Spouse Correct Answer Spouse
Joe Smith has a HO-3 policy. He is a carpenter and has collected 100 2"X4" studs and
30 2"X6" rafters from various job sites. Joe has no specific plans to use the lumber. The
lumber is covered under Coverage A.
True or False Correct Answer False
Under an HO-3 policy, which of the following would be a Coverage B item?
Select the single best answer:
A. Satellite dish bolted to the eave of the house
, B. Free standing gas range
C. Built-in microwave oven
D. Automatic garage door opener
E. Water softener system Correct Answer Free Standing gas range
Under an HO-3 policy, which of the following would not be a Coverage A item?
Select the single best answer:
A. Automatic lawn sprinkler system
B. Wall to wall carpet attached to the dwelling
C. A new (in the box), built-in microwave oven the insured intends to install in his fishing
cabin.
D. A shed, on a foundation, rented to a neighbor to store the neighbor's boat
E. Materials and supplies to build bookshelves in the basement of the residence
premises and stored in the garage Correct Answer E. Materials and supplies to build
bookshelves in the basement of the residence premises and stored in the garage
An HO-3 homeowners policy with a $250 deductible is in force and the policy limits
(Coverage A and Coverage B) are adequate to cover this damage. During a severe
windstorm, rain blows through open windows and causes the following damage:
Hardwood floor in the dining room $1,700
Water stains on the drywall $ 220
Water stains on the area rug $125
Antique vase (broken by force of wind) $375
How much should you pay on this loss? All repairs have been made.
Select the single best answer:
A. $ 0
B. $1,920
C. $2,420
D. $2,170
E. $2,045 Correct Answer 2170
If a picture falls from a wall and damages an expensive statue, under the HO-3
coverage for the statue would:
Select the single best answer:
A. Apply under the falling object peril
B. Not apply, not an insured peril
C. Apply under the collapse peril
D. Not apply since it should have been insured under a personal articles policy
E. None of the above Correct Answer not apply, not an insured peril
