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state farm property exam (Mamas Test)| Answered 100% Correctly| Updated
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STATE FARM PROPERTY EXAM (MAMAS TEST)|ANSWERED 100% CORRECTLY| UPDATED
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)
Therefore 1/3 of the 24k loss is 8,000
In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss,
the named insured is required to submit it within - (ANSWER)a specified time
What are considered parts of the policy structure - (ANSWER)conditions, exclusions, insuring
clause
A homeowner sells his house to a friend. the friend wants to keep the homeowners current policy
in effect. under the assignment provision which of the following is most likely? - (ANSWER)the
homeowner will need to get written consent from the insurer before the policy can be reassigned
What is consideration? - (ANSWER)something of value that is transferred between the two
parties to form a legal contract
What are endorsements - (ANSWER)change the policy's original terms, conditions, or
coverages. endorsements can add or delete coverage or merely correct items such as the insured's
name and address etc
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