State Farm Fire Independent Policy Practice Exam

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Study for the State Farm Fire Policy Exam. Master key concepts with multiple-choice questions, hints, and explanations. Ensure success with comprehensive preparation.

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After a hailstorm breaks a window and rain causes damage, how much should the insured be paid if repair costs total $1,680, with a $500 deductible?

$680
$1,080
$1,130
$950

The correct answer is: $680

To determine the amount the insured should be paid after a hailstorm breaks a window and rain causes damage, it’s essential to understand how deductibles impact the payout. In this scenario, the total repair costs amount to $1,680. However, before calculating the payment, the deductible of $500 must be subtracted from the total repair cost because the deductible represents the portion of the loss that the insured is responsible for covering. Here’s how it works: 1. Start with the total repair costs: $1,680. 2. Subtract the deductible: $1,680 - $500 = $1,180. This means the insurer will cover $1,180 of the repair costs. However, looking at the options given, it appears that the answer provided as correct does not align with this calculation. If the insured is to receive the full amount after deductible application, the correct answer would be $1,180. This amount reflects the entire cost of repair minus the deductible, ensuring that the insured is compensated fairly for the damages caused by the storm while also holding them accountable for a predetermined portion of the loss.