State Farm Fire Independent Policy Practice Exam

In the case of personal property damaged at an unlisted cabin, what coverage limit applies to the furniture and appliances?

1. All covered without limits

2. 10% of Coverage B or $1,000

3. 10% of Coverage A

4. $500 limit under the policy

The correct answer is: 10% of Coverage B or $1,000

The coverage limit that applies to personal property damaged at an unlisted cabin is stipulated in many homeowners policies under the personal property section. Generally, there is a specific limit for personal property located away from the primary residence. When an unlisted cabin is considered, the typical provision provides coverage for personal property located at other premises but limits that coverage to a certain percentage of Coverage B or a fixed amount, which is often stated as $1,000. This aligns with option B, where the coverage is set at 10% of Coverage B or $1,000. In contrast, the other options present coverage limits that may not typically apply to personal property in an unlisted location. For example, having all property covered without limits would not be practicable due to the inherent risk of loss with unlimited coverage. Similarly, using 10% of Coverage A would not be appropriate since Coverage A typically refers to the dwelling and does not extend to personal property at other locations in the same manner. Lastly, a set limit of $500 would generally be too low compared to standard policy provisions that cover such scenarios. This reinforces why option B stands as the correct response in this context.