ACA State Farm Exam Questions With Correct And Revised Answers
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Course
State Farm
Institution
State Farm
ACA State Farm Exam Questions With
Correct And Revised Answers
All of the following describe insurable interest EXCEPT:
A.Insurable Interest must exist at the time of the loss.
B.Insurance Interest must exist for insurance to respond
C.Show a similarity between insurance and wagering.
D.The i...
ACA State Farm Exam Questions With
Correct And Revised Answers
All of the following describe insurable interest EXCEPT:
A.Insurable Interest must exist at the time of the loss.
B.Insurance Interest must exist for insurance to respond
C.Show a similarity between insurance and wagering.
D.The insured would suffer an economic loss. - answer✔✔Show a similarity between insurance
and wagering.
An Insurance Policy is a contract with all of the following characteristics, EXCEPT
A. It is a personal contract.
B. Parties are of unequal power with ambiguities or unclear wording resolved in favor of the
insured because it is a contract of adhesion
C. There are conditions imposed upon both the insurer and insured.
D. Indemnity is not part of an insurance contract. - answer✔✔D. Indemnity is not part of an
insurance contract.
An insurance contract may contain a "gray area" or an ambiguity, that is generally resolved in
favor of the insured because insurance policies are contracts of:
A.Indemnity
B.Cohesion
C.Adhesion
D.Conditions - answer✔✔C.Adhesion
If an insured sells his car to another person, the buyer may be prohibited from also receiving the
insured's policy. This is because the insurance contract is a contract of:
A.Personal nature
B.Indemnity
D.Actual cash value - answer✔✔A.Personal nature
Strict or absolute liability:
A.applies to school systems.
B.must have failure to use "due care."
C.considers the actions of a prudent person.
D.is assigned by law or statute. - answer✔✔D.is assigned by law or statute.
Jack and Connie - both 50 years old and of sound mind - agree to have Jack burn down Connie's
house for $10,000. What element of a valid contract is missing?
A.Legal purpose
B.Competent parties
C.Consideration
D.Agreement of the parties - answer✔✔A.Legal purpose
Risks that are insurable are:
A.Speculative risk
B.Pure risk
C.Both A & B
D.None of the above - answer✔✔B.Pure risk
Insurance that covers the responsibility for loss arising out of policy holder's negligence - that
results in payment to a party other than the insured is:
A.Not available in Florida insurance policies
B.Fourth party claims
C.Standard property insurance
D.Liability - answer✔✔D.Liability
The goal of insurance is to restore the insured to the same economic position as before the
covered loss occurred, this is the principle of:
A.dhesion
B.Actual Cash Value
D.Severability - answer✔✔C.Indemnity
Liability limits may be expressed as a:
A.Aggregate Limit
B.Split Limit
C.Single Limit
D.All of the above - answer✔✔D.All of the above
An insured has A SPLIT limit liability policy with 10/20/10 limits. He owes the following people
liability bodily injuries claims of: Passenger 1 = $12,000, Passenger 2 = $10,000, Passenger 3 =
$18,000. How much liability insurance will his policy pay for these claims?
A$ 10,000
B$ 20,000
C$ 30,000
D$ 40,000 - answer✔✔B$ 20,000
If a lender has an insurable interest in an auto, because of the money loaned to finance the auto,
the lender would appear on the policy as the:
A.Lessee
B.Loss payee
C.Mortgagor
D.Mortgagee - answer✔✔B.Loss payee
To turn partially damaged property over to the insurance company and ask them to pay for a total
loss is called
A.Morale hazard
B.Abandonment
C.Conveyance
D.Proof of Loss - answer✔✔B.Abandonment
Firemen caused water damage to a property by spraying water to put out a fire. If the property
insurance policy listed "fire" as the only named peril:
A.The water damage is not a covered.
B.The fire dept. has liability for the water damage.
C.The water damage is covered due to the concept of proximate cause.
D.The Fire damage is covered but not the water damage due to proximate cause. -
answer✔✔C.The water damage is covered due to the concept of proximate cause.
XYZ Insurance Corp. filed its corporate charter in Tallahassee and has its home office in Tampa:
A.In Florida, XYZ is a domestic insurer.
B.In Florida, XYZ is a foreign insurer.
C.In Florida, XYZ is an alien insurer.
D.None of the above is true. - answer✔✔A.In Florida, XYZ is a domestic insurer.
An insured has a home with a replacement cost / value of $100,000, on which he carries an
insurance policy for $80,000 with an 80% Coinsurance clause. The insured has a $20,000 partial
loss, the insurance company will pay how much for this partial loss of $20,000? (Remember
$80,000 is 80% of $100,000)
A.20,000
B.16,000
C.80,000
D.- 0 - - answer✔✔A.20,000
"Actual Cash Value" ACV means:
A.Replacement cost
B.Original cost minus depreciation
C.Current cost to replace
D.Current cost to replace minus depreciation - answer✔✔D.Current cost to replace minus
depreciation
Which of the following is TRUE concerning Subrogation?
A.Allows the insured to collect twice for the same loss.
B.Allows the insurer to sue a negligent third party to recover a loss paid.
C.Requires 70% co-insurance.
D.May allow insurer to divide the interests of the insureds. - answer✔✔B.Allows the insurer to
sue a negligent third party to recover a loss paid.
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