State Farm Property Exam Questions with
100% Correct Answers
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.
Abandonment Condition
A loss that occurs at a specific time and place
Accident
Today's replacement cost minus depreciation. Depreciation from wear and tear, or obsolescence.
Actual Cash Value (ACV)
Company that meets a state insurance department's standards and is allowed to do business in that
state.
admitted insurer; authorized insurer
the tendency of insureds with a greater than average chance of loss to purchase insurance
Adverse Selection
Nonfiled commercial inland marine transportation form that insures a property owner's incoming or
outgoing shipments of goods during a year
Annual Transit Policy
A survey of property to determine the insurable value of the property or the value of the loss
sustained.
Appraisal Clause
Policy condition that outlines a procedure for when the insured and insurer disagree on the amount
of a loss
Appraisal Condition
The legal transfer of one's interest in an insurance policy to another person.
Assignment
Provides coverage for physical damage to an aircraft.
Aviation Hull Insurance
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.
Bailee's Customers Policy
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.
Appurtenant Structures
, Condition in insurance policies that specifies that the policy cannot be transferred to another unless
the company consents to the transfer in writing.
Assignment Condition
A person or organization that has temporary possession of someone else's personal property.
Bailee
There are 14 perils. Fire, lightening, riot, explosion, vehicles, volcanic eruption, civil commotion,
smoke, hail, aircraft, windstorm, vandalism, malicious mischief, theft.
Basic Perils in Homeowners Policy
D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
Basic Property Policy Structure (DICEE)
Type of insurance policy that covers more than one item of property at a single location or one or
more items of property at multiple locations
Blanket Insurance
Commercial property coverage forms that covers commercial, residential, or farm buildings that are
under construction or during remodeling.
Builders Risk Coverage Form
Type of ocean marine insurance that covers goods while they are in transit over water.
Cargo Insurance
Oral or written statement that provides immediate insurance protection for a specified period;
designed to provide temporary coverage until a policy is issued or denied.
Binder
Package policy designed to provide broad property and liability coverage for small businesses;
eligibility requirements are stricter than the CPP.
BOP
Pays for loss of income that the insured sustains due to a direct physical loss from a covered peril that
forces the insured to suspend operations until the property can be repaired, rebuilt, or replaced with
reasonable speed; available with or without extra expense coverage.
Business Income Policy
Separate form used with the commercial property coverage part of the commercial package policy
that lists covered perils and exclusions. Several different versions provide increasingly broader
coverage from basic to broad to special.
Causes of Loss Form
100% Correct Answers
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.
Abandonment Condition
A loss that occurs at a specific time and place
Accident
Today's replacement cost minus depreciation. Depreciation from wear and tear, or obsolescence.
Actual Cash Value (ACV)
Company that meets a state insurance department's standards and is allowed to do business in that
state.
admitted insurer; authorized insurer
the tendency of insureds with a greater than average chance of loss to purchase insurance
Adverse Selection
Nonfiled commercial inland marine transportation form that insures a property owner's incoming or
outgoing shipments of goods during a year
Annual Transit Policy
A survey of property to determine the insurable value of the property or the value of the loss
sustained.
Appraisal Clause
Policy condition that outlines a procedure for when the insured and insurer disagree on the amount
of a loss
Appraisal Condition
The legal transfer of one's interest in an insurance policy to another person.
Assignment
Provides coverage for physical damage to an aircraft.
Aviation Hull Insurance
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.
Bailee's Customers Policy
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.
Appurtenant Structures
, Condition in insurance policies that specifies that the policy cannot be transferred to another unless
the company consents to the transfer in writing.
Assignment Condition
A person or organization that has temporary possession of someone else's personal property.
Bailee
There are 14 perils. Fire, lightening, riot, explosion, vehicles, volcanic eruption, civil commotion,
smoke, hail, aircraft, windstorm, vandalism, malicious mischief, theft.
Basic Perils in Homeowners Policy
D - Declarations
I - Insuring agreement
C - Conditions
E - Exclusions
E - Endorsements
Basic Property Policy Structure (DICEE)
Type of insurance policy that covers more than one item of property at a single location or one or
more items of property at multiple locations
Blanket Insurance
Commercial property coverage forms that covers commercial, residential, or farm buildings that are
under construction or during remodeling.
Builders Risk Coverage Form
Type of ocean marine insurance that covers goods while they are in transit over water.
Cargo Insurance
Oral or written statement that provides immediate insurance protection for a specified period;
designed to provide temporary coverage until a policy is issued or denied.
Binder
Package policy designed to provide broad property and liability coverage for small businesses;
eligibility requirements are stricter than the CPP.
BOP
Pays for loss of income that the insured sustains due to a direct physical loss from a covered peril that
forces the insured to suspend operations until the property can be repaired, rebuilt, or replaced with
reasonable speed; available with or without extra expense coverage.
Business Income Policy
Separate form used with the commercial property coverage part of the commercial package policy
that lists covered perils and exclusions. Several different versions provide increasingly broader
coverage from basic to broad to special.
Causes of Loss Form
