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State Farm Fire Policy Exam –
Independent Adjuster Practice
Questions with Answers.
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 - << Correct 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 $300,000 with a $1, 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 - << Correct Answer >>✅✅ 0
The insured has a storage shed on a foundation in his backyard. It is damaged by a windstorm and has not been repaired or replaced. Which one of the following statements is correct under the HO-3?
Select the single best answer:
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 - << Correct 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. - << Correct Answer
✅✅ None of the situations are covered by the HO-3.
Mike and Dorothy Jackson have a HO-3 policy with a $250 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 - << Correct Answer >>✅✅ 650
Under an HO-3 policy, which of the following statements about Option JF is false?
Select the single best answer:
A. $150.00 to remove the limb from the roof.
B. $500.00 to replace the tree.
C. $400.00 cut the tree up and haul it to the municipal landfill.
D. $500.00 repair roof.
E. All the above items would be covered. - << Correct Answer >>✅✅ B. $500.00 to replace the tree.
Paul Smith owns a home at 1526 Keystone Rd. with a HO-3 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 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 - << Correct 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-3 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 $1,000 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. - << Correct 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-3 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
Remove and replace wall paper $
Remove and replace vertical blinds $
Replace area rug $
All repairs are complete. How much do you owe the insured?
Select the single best answer:
A. $
B. $
C. $
D. $
E. $ 0 - << Correct Answer >>✅✅ 680
Jo Smith has an HO-3 policy and grows exotic orchids as a hobby. Orchids cannot survive more than 80 degrees F. While Jo was on vacation, the electricity was out for several days. The temperature in the home rose to 95 degrees, causing the flowers to wilt and die. Immediately prior to the power outage, a tornado was spotted in the vicinity. Jo submitted a claim for $2,000. In order to pay the claim for the damaged flowers you must verify:
Select the single best answer:
A. The power interruption took place on the residence premises.
B. The power interruption was caused by a loss insured.
C. Power lines off the residence premises remained energized.
D. A., B. and C. are required to pay this loss.
E. There was no damage to the Coverage A property therefore you cannot
pay for the loss of the flowers. - << Correct Answer >>✅✅ D
The Sheriff's department ordered evacuation of the residence premises due to an approaching hurricane. The insured's departed in compliance with the order. They were not allowed to return for two weeks. The hurricane damaged neighboring homes but the residence premises did not suffer any damage. The insured's family stayed in a hotel during the mandatory evacuation and were charged $600 per week. Under the HO-3 policy, with a $500 deductible, how much would we owe the insured?
elect the single best answer:
A. $ 700
B. $ 600
C. $
D. $1,200 - << Correct Answer >>✅✅ 700
The Sheriff's department ordered evacuation of the residence premises due to an approaching hurricane. To protect their personal property, the insured moved antique furniture and valuables to a secure storage facility. The insured's family was not allowed to return to their home for three weeks. The hurricane damaged neighboring homes but the residence premises did not suffer any damage. The insured's family submitted the following bills, in addition to their hotel bill. Trailer rental (one way) to haul furniture and valuables to secure storage: $ 158.
Wages paid to neighbor's teenage sons to help load/unload furniture: $90. Rent
for the secure storage building for three weeks: $75.
Trailer rental to haul furniture back home after the hurricane: $158.
Wages paid to neighbor's son to help return furniture to home: $45.
D. Basement used as an office for insured's bookkeeping business
E. Garage (attached) rented to tenant to store fishing boat - << Correct
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 $ 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. - << Correct
Answer >>✅✅ A. Coverage for personal property applies for perils listed under Section I - Losses Insured, Coverage B - Personal Property and Section I
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 - << Correct Answer >>✅✅ B. Fire Department Service Charges
In the HO-3 policy, Coverage C consists of three coverages:
Additional Living Expense
Fair Rental Value
Property Removed
True or False - << Correct Answer >>✅✅ False its Additional Living expense, Fair rental value and prohibited use
The steps in applying the deductible on a HO-3 homeowners policy are:
1.)The deductible is first applied to the covered loss.
2.)Any coverage or special limits are then applied to the covered loss.
3.)The amount payable to the insured will be the greater of the amounts arrived at in steps 1 and 2.
True or False - << Correct Answer >>✅✅ True
The definition of an insured includes all of the following except:
Select the single best answer:
A. Person(s) listed on the Declaration Page
B. Spouse, if a resident of the household
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 - << Correct 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 - << Correct 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 - << Correct 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 - << Correct Answer >>✅✅ False
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.
Cash in Jennifer's purse $160.
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 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 - << Correct Answer >>✅✅ 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.
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 - << Correct 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- policy in force. ALE will be payable on this loss.
True or False - << Correct 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 - << Correct 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.
