State Farm Prep Exam Results #1

Naples Pizza is a successful 10,000 square foot restaurant that generates close to $8 million in gross sales annually. Is this business eligible for a businessowners policy (BOP), and why or why not? No, because its gross sales are too high. No, because restaurants are generally ineligible for a BOP. Yes, because it is a successful business. Yes, because it is less than 35,000 square feet in area. - ANS-No, because its gross sales are too high. While restaurants are generally eligible for a BOP and this one is within the 35,000- square-foot limit, eligibility is restricted to businesses that generate no more than $6 million in annual gross sales. Mrs. Lombardi's dwelling policy denied her claim for the collapse of her deck. On what form is her dwelling policy written? DP-1 Basic Form DP-2 Broad Form DP-3 Special Form DP-4 Comprehensive Form - ANS-DP-1 Basic Form The only dwelling forms that include coverage for collapse are the DP-2 and DP-3. The Dwelling program does not include a DP-4 form. All the following statements regarding the commercial inland marine policy commercial articles floater are correct, EXCEPT: Theft is covered under a commercial articles floater. The commercial articles floater is designed specifically to insure camera equipment and musical instruments. The commercial articles floater insures equipment used commercially or by nonprofit organizations. Open perils coverage applies only if the insured property is stored at the insured's premises. - ANS-Open perils coverage applies only if the insured property is stored at the insured's premises. A commercial articles floater is designed to insure either camera equipment or musical instruments used commercially or by nonprofit organizations. Open perils coverage, which includes theft, applies wherever the property is located; there are no limitations on the coverage territory. The property section of a businessowners policy (BOP) provides how much coverage for the cost of replacing or restoring electronic data that has been destroyed or corrupted by a covered cause of loss? up to $10,000 up to $50,000 up to $100,000 up to $500,000 - ANS-up to $10,000 The BOP provides an annual aggregate of up to $10,000 for the cost of replacing or restoring electronic data that has been destroyed or corrupted by a covered cause of loss. Which of the following correctly describes "residence premises" under a homeowners policy? It is where the insured lives full-time and must be a single-unit dwelling. It is where the insured lives full-time and may be either a single-unit dwelling or a multiunit building. It is where the insured lives full- or part-time and must be a single-unit dwelling. It is where the insured lives full- or part-time and may be either a single-unit dwelling or a multi-unit building. - ANS-It is where the insured lives full- or part-time and may be either a single-unit dwelling or a multi-unit building. The definition of "residence premises" generally includes any dwelling in which the insured lives, either full- or part-time. Besides single-unit homes, it may include any two- , three-, or four-family dwelling in which the named insured resides and part of a premises occasionally rented by the insured. All of the following are considered employees while performing consulting services for the insured EXCEPT: Paul, an independent contractor Arlene, a former employee of the insured Josie, a former partner of the insured Matthew, a former manager in the insured's company - ANS-Paul, an independent contractor Former employees, partners, directors, trustees, and limited liability company members and managers are considered employees while performing consulting services for the insured. Independent contractors are not considered employees of the insured business. Instead, they are self-employed. All of the following statements about a no-fault auto insurance system are true EXCEPT: Continues...