Exam (elaborations)
STATE FARM FIRE INDEPENDENT POLICY EXAM
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STATE FARM FIRE INDEPENDENT POLICY EXAM
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STATE FARM FIRE INDEPENDENT POLICY EXAMMike and Jennifer Reed have an HO -3 policy in force with $250 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 $35.00
Cash in Jennifer's purse $160.00
Change in - Answers -2690
Mike and Jennifer Reed have an HO -3 policy in force with $250 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 $35.00
Cash in Jennifer's purse $160.00
Change in - Answers -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 - Answers -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 - Answers -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. $79,775
, B. $78,750
C. $78,775
D. $77,750
E. $74,000 - Answers -78750
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 shorte - Answers -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 - Answers -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 - Answers -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
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