State Farm Property Exam Questions and Answers 100% Pass

State Farm Property Exam Questions and Answers 100% Pass In property insurance actual cash value is defined as which of the following - Answer- Replacement cost at the time of the loss, less depreciation Peril is most easily defined as - Answer- the cause of loss insured against What is a leading factor in the determination of actual cash value - Answer- replacement cost Replacement cost is defined as - Answer- full replacement of property at its current cost, new and without reduction for depreciation Property insurance that provides 100k coverage for a building and 50k coverage for personal property at a single location is called - Answer- Specific coverage Which of the following is used in the formula for calculating the actual cash value of a property - Answer- replacement cost What is the purpose of the coinsurance clause found in property insurance policies? - Answer- Encourage the insured to insure the property closer to its full value An insured has a liability policy that sets the amount at 50k for all claims that arise from a single incident. which type of limit of liability does this insured's policy have? - Answer- per occurrence When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as - Answer- stated amount What is stated amount coverage - Answer- In stated amt coverage the value of the insured property is determined at the time the policy is written. in the event of a loss, that amount is paid without regard to any coinsurance provision. However, if the loss is less than the total, the insurer has salvage rights with the insured having first right of refusal of the salvage. What type of liability would a person who owns a swimming pool have? - Answer- Absolute What is absolute liability - Answer- Any conduct that is inherently dangerous imposes absolute liability. the claimant does not have to prove anything Insurable interest in the property covered in a policy must be proven - Answer- at the time of loss Which of the following is NOT an element of negligence breach, unbroken chain, libel, duty - Answer- libel what is libel - Answer- a type of intentional tort With respect to the business of insurance, a hazard is - Answer- any condition or exposure that increases the possibility of loss What are the four essential elements of all legal contracts - Answer- offer and acceptance, consideration, competent parties, and legal purpose In forming an insurance contract, when does acceptance usually occur? - Answer- when an insurer's underwriter approves coverage Who is responsible for filling out a notice of claim form - Answer- insured what is a notice of claim - Answer- a form or statement from an insured to an insurer, informing the insurer that events leading to a possible claim have occurred If a property is covered by comp a for 20k and comp b covers the same property for 40k, how much will comp a pay on a 24k loss? - Answer- 8000 pro rata liability applies each policy pays a percentage of the loss based on the percentage of coverage that policy provides. comp a carries 1/3 of the total coverage (20k + 40k = 60k