State Farm Property Exam Questions with
100% Correct Answers
which of the following refers to being restored to the financial condition you were in before a loss?
indemnification
mark incurred 8000$ damage to his car in an accident. he received 8000$ from his insurance company
and 4000$ from the other driver. by receiving a profit from the loss, Mark is in violation of..
principle of indemnity
the transfer of risk from one party to another is called
insurance
the principle of indemnity is designed to prevent
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
premium
insurance
transfers risk of financial losses from one party to another
insured
individual or organization that pays premiums in exchange for protection
insurer
company group or government agency offering financial protection
insurance policy
a legally binding contract in which the insurer agrees to take on specified risks in exchange for the
insured's premiums
principle of indemnity
restoration to previous financial condition; no more, no less.
what are the four qualifications of a contract
agreement, consideration, competent parties, and legal purpose. must be 18 years of age
what is not a requirement for a legally binding contract
notarization
when an insurer issues an insurance policy, the actual item, person or organization that is being
insured is called the
the risk
,what is a reserve, in insurance terms
a pool of collected premiums that the insurer sets aside to pay claims
aleatory
of or pertaining to accidental causes; of luck or chance; unpredictable
unilateral
one-sided
utmost good faith
both parties must act honestly and openly in order for the contract to be valid
adhesion
one party sets the terms of the contract; the other may simply agree or not agree
unilateral
only the insurer makes a promise to act; the insured can void contract at any time
personal
the insured person is protected from losses, not the covered property.
conditional
the insurer must only honor the contract if the insured meets certain conditions.
aleatory
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
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
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
toms financial interest in thee home
what is not true about an aleatory contract
in an aleatory contract, the amount of benefit to the insured and insurer is equal.
what does D.I.C.E stand for?
, declarations page (and definitions), insuring agreement, conditions and exclusions (and
endorsements)
'we will provide the insurance described in this policy in return for the premium and compliance with
all applicable provisions of this policy.' in which section of the insurance policy might this statement
be found?
insuring agreement
in which section of the policy might you find the following statement ? 'damage to insured property
must be reported within 15 days of the damaging occurrence.'
conditions
which of these causes of loss is least likely to be covered by a typical insurance policy?
nuclear hazard
edna loses some of her property in a hailstorm. when an adjuster comes to investigate the loss, he
gives an estimate that edna thinks is far too lowl. as negotiations continue, neither edna nor the
adjuster will budge. where in Ednas policy would you find the procedure to follow in this situation?
conditions
conditions
lists requirements that the insured must meet for coverage to apply
declarations
information that makes the policy unique to a specific insured.
exclusions
causes of loss or items of property that are not covered by the policy
endorsements
add, reduce, or change the coverage of the policy in some way
definitions
explains exactly what specific words mean in the context of the policy
insuring agreement
the essence of the contract. often only a single sentence
Xavier owns a small insurance company. recently the company won a bid to insure a new housing
development in Omaha, NE. his company can hangle any claims that arise, but if a series of tornados
were to tear through the area, destroying the entire development, Xaviers company would be hit
extremely hard financially. which type of insurer could help Xaviers company protect itself the most
from this potential loss?
a re-insurer
100% Correct Answers
which of the following refers to being restored to the financial condition you were in before a loss?
indemnification
mark incurred 8000$ damage to his car in an accident. he received 8000$ from his insurance company
and 4000$ from the other driver. by receiving a profit from the loss, Mark is in violation of..
principle of indemnity
the transfer of risk from one party to another is called
insurance
the principle of indemnity is designed to prevent
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
premium
insurance
transfers risk of financial losses from one party to another
insured
individual or organization that pays premiums in exchange for protection
insurer
company group or government agency offering financial protection
insurance policy
a legally binding contract in which the insurer agrees to take on specified risks in exchange for the
insured's premiums
principle of indemnity
restoration to previous financial condition; no more, no less.
what are the four qualifications of a contract
agreement, consideration, competent parties, and legal purpose. must be 18 years of age
what is not a requirement for a legally binding contract
notarization
when an insurer issues an insurance policy, the actual item, person or organization that is being
insured is called the
the risk
,what is a reserve, in insurance terms
a pool of collected premiums that the insurer sets aside to pay claims
aleatory
of or pertaining to accidental causes; of luck or chance; unpredictable
unilateral
one-sided
utmost good faith
both parties must act honestly and openly in order for the contract to be valid
adhesion
one party sets the terms of the contract; the other may simply agree or not agree
unilateral
only the insurer makes a promise to act; the insured can void contract at any time
personal
the insured person is protected from losses, not the covered property.
conditional
the insurer must only honor the contract if the insured meets certain conditions.
aleatory
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
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
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
toms financial interest in thee home
what is not true about an aleatory contract
in an aleatory contract, the amount of benefit to the insured and insurer is equal.
what does D.I.C.E stand for?
, declarations page (and definitions), insuring agreement, conditions and exclusions (and
endorsements)
'we will provide the insurance described in this policy in return for the premium and compliance with
all applicable provisions of this policy.' in which section of the insurance policy might this statement
be found?
insuring agreement
in which section of the policy might you find the following statement ? 'damage to insured property
must be reported within 15 days of the damaging occurrence.'
conditions
which of these causes of loss is least likely to be covered by a typical insurance policy?
nuclear hazard
edna loses some of her property in a hailstorm. when an adjuster comes to investigate the loss, he
gives an estimate that edna thinks is far too lowl. as negotiations continue, neither edna nor the
adjuster will budge. where in Ednas policy would you find the procedure to follow in this situation?
conditions
conditions
lists requirements that the insured must meet for coverage to apply
declarations
information that makes the policy unique to a specific insured.
exclusions
causes of loss or items of property that are not covered by the policy
endorsements
add, reduce, or change the coverage of the policy in some way
definitions
explains exactly what specific words mean in the context of the policy
insuring agreement
the essence of the contract. often only a single sentence
Xavier owns a small insurance company. recently the company won a bid to insure a new housing
development in Omaha, NE. his company can hangle any claims that arise, but if a series of tornados
were to tear through the area, destroying the entire development, Xaviers company would be hit
extremely hard financially. which type of insurer could help Xaviers company protect itself the most
from this potential loss?
a re-insurer
