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State Farm Fire Independent Policy 2024
Exam Review Questions and Answers
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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. - 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 - 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. - 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 - Answer>> B. Fire Department Service Charges In the HO-3 policy, Coverage C consists of three coverages: Additional Living Expense Fair Rental Value
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 - 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 - 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, Water stains on the drywall $ 220 Water stains on the area rug $ Antique vase (broken by force of wind) $
How much should you pay on this loss? All repairs have been made. Select the single best answer: A. $ 0 B. $1, C. $2, D. $2, E. $2,045 - 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 - Answer>> not apply, not an insured peril Bill Smith constructed an awning beside his detached garage, under which he stores his small fishing boat. He screwed the framing of the awning to the fascia of the garage and supported the other side with posts set in concrete. Since the awning has no foundation, it is not considered a Coverage A item. True or False - Answer>> False Mike and Jennifer Reed have an HO -3 policy in force with $ deductible. Lightning struck the insured's house, damaging the house and the contents. Mike is a policeman and operates a engine repair shop in a shed on the insured premises. Jennifer is a sales representative and often has samples and merchandise at
Mike's police uniform $375. 4 hunting rifles $1,820. 3 shotguns $870. Use the information listed above to answer the following question. How much would you pay for the hunting rifles and shotguns listed in this loss? Do not consider the deductible in calculating this answer. Select the single best answer: A. $2, B. $2, C - Answer>> 2690 Mike and Jennifer Reed have an HO -3 policy in force with $ deductible. Lightning struck the insured's house, damaging the house and the contents. Mike is a policeman and operates a engine repair shop in a shed on the insured premises. Jennifer is a sales representative and often has samples and merchandise at the house. The following items where listed on the personal property inventory forms submitted after the loss. Cash in Mike's billfold $35. Cash in Jennifer's purse $160. Change in piggy bank $25. Hand tools used in Mike's business $780. Jennifer's sales samples $320. Mike's police uniform $375. 4 hunting rifles $1,820. 3 shotguns $870. Use the information listed above to answer the following question. How much of the deductible, if any, would be absorbed in this loss? Select the single best answer: A. $ 0
B. $
C. $
D. $
E. $120 - Answer>> 250 Lightning hits a power transformer two streets away from the risk and knocks out the power to the entire area. The temperature is in the 20's and our insured's home is heated by an electric furnace. The insured has a HO-3 policy in force. ALE will be payable on this loss. True or False - Answer>> False In the HO-3 policy, resulting ALE and Fair Rental Value can be paid for up to two weeks if use of the premises is prohibited by civil authorities because of direct covered damage to a neighboring premises caused by a loss insured. True or False - Answer>> True An HO-3 policy is in force with coverage A limits of $75,000. The policy has a $1,000 deductible. The house is totally destroyed by a tornado and the cost to replace the house is $75,550 plus debris removal of $4,225 for a total claim of $79,775. All repairs have been completed. What is the amount of your final settlement? Consider the deductible in your calculations. Select the single best answer: A. $79, B. $78, C. $78, D. $77, E. $74,000 - Answer>> 78750
Under an HO-3 policy with Option JF, which if the following statements is true concerning a jewelry loss? Select the single best answer: A. Coverage applies only for the sixteen Section I-Losses Insured, Coverage B-Personal Property named perils. B. The limit of liability for theft jewelry and furs is $1,000. C. Coverage only applies for the items listed on the schedule in the Declarations. D. Coverage is for accidental direct physical loss or damage unless otherwise stated. - Answer>> D. Coverage is for accidental direct physical loss or damage unless otherwise stated. We insure Steve Smith with a HO-3 policy. Steve works at the Acme Vacuum Co. On weekends and in the evenings he repairs vacuum cleaners in a detached building structure on the insured premises. The building is damaged by a severe windstorm. Since Steve owns his business and only works part time the damage will be paid under the Dwelling Extension coverage of the policy. True or False - Answer>> False Judy Howard owns a home at 2500 Mocking Bird Lane. She had a HO-3 policy in force. She sold the home on June 5, XX and began moving her personal property to a new residence. On June 27 a tornado damaged the personal property at the new location. Judy's policy is still in force. She did not have a policy in force for the new location. Select the single best answer: A. Coverage up to the Coverage B limits applies at the new location B. Coverage up to the Coverage B limits applies at the original location
C. Judy would have to purchase an endorsement to provide coverage for the personal property during the moving process. D. A and B are both correct. E. None of the above are correct. - Answer>> D. A and B are both correct. The cooling system for the insured's freezer is damaged due to a power failure and all food in the unit is spoiled before the insured becomes aware of the loss. You can pay for the food if there is a HO-3 policy in force. True or False - Answer>> True Select the choice below that most accurately describes treatment of a deductible under the HO-3 policy. Select the single best answer: A. The deductible may be partially absorbed. B. The deductible may be completely absorbed. C. The deductible is not applied to Fire Department Service Charges. D. The deductible may be absorbed due to covered loss in excess of a coverage limit or a special limit. E. All the above are true. - Answer>> E. All the above are true. The insured (HO-3 policy in force) is building a barn on property where he plans to build a new home and move in the future. The property is not listed on the Declaration Page. During the construction process he stores construction materials and supplies for the barn in his detached garage at the insured premises. These building materials and supplies are destroyed. They are not covered under Coverage A. True or False - Answer>> True
D. The dwelling and all other structures E. Both A and D - Answer>> The dwelling and other building structures Which of the following statements can apply to Debris Removal Coverage in the HO-3 policy? Select the single best answer: A. Pay up to $500 in the aggregate for each loss to cover the reasonable expenses incurred in the removal of tree debris from the residence premises when the tree has caused a loss insured to Coverage A property. B. We will pay the reasonable expenses incurred in the removal of debris of covered property damaged by a loss insured. This expense is included in the limit applying to the damaged property. C. When the amount payable for the property damage plus the debris removal exceeds the limit for the damaged property, an additional 5% of that limit is available for debris removal expense. D. All of the above E. None of the above - Answer>> all of the above Assume an HO-3 is in force. The insured's home is damaged by a severe windstorm and the family is forced to move into a motel for 2 weeks. The insured provided the following receipts. The water, electricity and telephone remained in service following the loss. Amount Paid Amount Normally Spent Mortgage Payment $985 $ Hotel Bills $1,075 $ Water $25 $ Electricity $125 $ Telephone $10 $ Cable TV $0 $ Meals in Restaurants $505 $
Food prepared at home $0 $ Automobile $35 $ Laundry $60 $ Dry cleaning $15 $ How much do you owe for ALE. Do not consider a deductible. Select the single best answer: A. $ 253 B. $ 320 C. $1, D. $1, E. $1,248 - Answer>> 1248 Bill and Mary Johnson have a HO-3 policy on their home with Coverage A limits of $400,000 and Coverage B limits of $300, with a $1,000 deductible. Very high straight-line winds struck their home, blowing down six large trees on the residence premises. One tree fell on the split-rail fence of the rear yard, damaging 24 LF of the fence. Another fell on a portable picnic table, destroying it. The remaining four trees were simply blown down in the yard. Bill and Mary submitted the following receipts for payment: Remove tree from fence in order to repair fence (two cuts with chainsaw) $ 50 Repair 24 LF of split-rail fence ($15 per foot) $ Remove tree debris (tree that fell on fence) from residence premises $ Remove tree from picnic table (three cuts with chainsaw) $ Replace picnic table (Lowe's - treated pine - assembled) $ Remove tree debris (tree that fell on table) from residence premises $ Remove rem - Answer>> 0
accumulated to the point that it seeped under the door, damaging the hardwood floor, wall paper, vertical blinds, and area rug. HO-3 policy is in force with the following limits: Coverage A $75, Dwelling Extensions $7, Coverage B $56, Deductible $ The insured presents the following claim: Sand and finish floor $ Remove and replace wall paper $ Remove and replace vertical blinds $ Replace area rug (contents) $ All repairs are complete. How much do you owe the insured? Select the single best answer: A. $ B. $ C. $ D. $ E. $645 - Answer>> 0 Assume you have a HO-3 policy in force and do not have any endorsements added to the policy. Which of the following types of loss will be covered? Select the single best answer: A. The home sustains structural damage due to an earthquake. B. A landslide carries a large tree into the side of the insured home causing structural damage.
C. The home is located in a non flood area, but following heavy rains the home sustains structural damage from 13 inches of flood water standing in the house for three days. D. The home is located on the western shore of Lake Michigan. The house is condemned because the yard is subsiding and falling into the lake. E. None of the situations are covered by the HO-3. - Answer>> None of the situations are covered by the HO-3. Mike and Dorothy Jackson have a HO-3 policy with a $ deductible. Their entire redwood basket weave fence, which surrounds the rear yard, is destroyed in a windstorm. The cost to replace the fence is $1,300. The Actual Cash Value of the fence is $900. Repairs are complete. How much do you owe Mr. and Mrs. Jackson? Select the single best answer: A. $ B. $1, C. $ 900 D. $1, E. $ 650 - Answer>> 650 Under an HO-3 policy, which of the following statements about Option JF is false? Select the single best answer: A. Coverage applies for accidental direct physical loss or damage, unless otherwise stated. B. Coverage applies only for the Coverage B named perils. C. The limits for this option are shown in the declarations. D. The first amount is the limit for any one article; the second amount is the aggregate limit for each loss.
tools necessary to make repairs. He also brought sporting equipment and clothes. Lightning struck the cabin, damaging it and personal property while Paul was there. All of the furniture and appliances normally remain at the cabin. Use the information listed above to answer the following question. Select the true statement listed in the answer choices: Select the single best answer: A. The building materials are covered under Coverage A. B. The building materials, sporting equipment and clothing are subject to the 10% of Coverage B or $1,000 limit. C. Tools, sporting equipment and clothes are covered - Answer>> Tools, sporting equipment, and clothes are considered Personal Property and covered up to the Coverage B limits of liability Paul Smith owns a home at 1526 Keystone Rd. with a HO- policy in force. He also owns a cabin in the mountains which is not listed on the declaration page of his policy. Paul stayed at the cabin for two weeks and performed repairs on the cabin during his stay. Paul brought with him the building materials, supplies and tools necessary to make repairs. He also brought sporting equipment and clothes. Lightning struck the cabin, damaging it and personal property while Paul was there. All of the furniture and appliances normally remain at the cabin. Use the information listed above to answer the following question. Select the true statement listed in the answer choices: Select the single best answer: A. The furniture and appliances are subject to the 10% or $1, limit under Coverage B.
B. The policy does not provide any coverage for the furniture and appliances because the cabin is not listed on the Declaration page. - Answer>> That furniture and appliances are subject to the 10% or $1000 limit under Coverage B Paul Smith owns a home at 1526 Keystone Rd. with a HO- policy in force. He also owns a cabin in the mountains which is not listed on the declaration page of his policy. Paul stayed at the cabin for two weeks and performed repairs on the cabin during his stay. Paul brought with him the building materials, supplies and tools necessary to make repairs. He also brought sporting equipment and clothes. Lightning struck the cabin, damaging it and personal property while Paul was there. All of the furniture and appliances normally remain at the cabin. Use the information listed above to answer the following question. The furniture and appliances have been replaced. You have verified the actual cash value for them to be $6,135 and the replacement cost to be $8,325. The Coverage B limit is $80,000, the policy deductible is $250 and Loss Settlement Provision is B1. What is the amount payable for the furniture and appliances - Answer>> 8000 Our insured's residence premises suffered damage to floor coverings, baseboards, drywall and personal property following exceptionally heavy rains that caused a nearby creek to rise and water enter the home. While the insured's were out of their home due to the flooding, looters stole lawn equipment from inside the detached garage. Under the HO-3 policy, what items would be covered? Select the single best answer: A. Stolen lawn equipment
