Arkansas Insurance Adjuster Practice Exam

Which of the following statements does NOT apply to the Standard Fire Policy?

1. It automatically covers wind and vandalism

2. It pays actual cash value

3. It is the basis for all homeowners policies

4. It is a named peril policy

The correct answer is: It automatically covers wind and vandalism

The Standard Fire Policy does not automatically cover wind and vandalism. Instead, the policy covers the damage caused by specific perils, such as fire, lightning, and smoke. Option A is incorrect because the policy requires additional coverage for wind and vandalism. Option B is incorrect because the policy may pay for either replacement cost or actual cash value, depending on the coverage chosen. Option C is incorrect because the policy only covers the structure of the home, not the belongings or liability. Option D is incorrect because it is a broad form policy, meaning it covers damage caused by a list of specific perils. In summary, Option A does not apply to the Standard Fire Policy as the policy excludes certain perils and may require additional coverage for them.