AINS 101 First Exam Practice |\ |\ |\ |\ |\
Questions WITH ANSWERS |\ |\
Adhering to the characteristics of an ideally insurable loss exposure
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
in selling insurance help assure that
|\ |\ |\ |\ |\
Select one: |\
A. The insurer is able to charge a premium that the insured can
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
afford to pay. |\ |\
B. The losses associated with it typically involve small amounts.
|\ |\ |\ |\ |\ |\ |\ |\ |\
C. The insurer is able to predict the amount and timing of each
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
future loss. |\
D. The insurer can charge a high premium for the coverage. -
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CORRECT ANSWERS ✔✔A. The insurer is able to charge a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
premium that the insured can afford to pay. |\ |\ |\ |\ |\ |\ |\
Claims supervisor Charlotte is reviewing the incoming claims for
|\ |\ |\ |\ |\ |\ |\ |\ |\
the day to decide which ones to assign to various claims reps. Of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
those claims, which one of the following descriptions will Charlotte
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
find is an example of a fortuitous loss?
|\ |\ |\ |\ |\ |\ |\
Select one: |\
A. An insured demolishes a deck that has been allowed to rot.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
B. An unknown vandal spray-paints graffiti on the insured's garage.
|\ |\ |\ |\ |\ |\ |\ |\ |\
,C. Insureds intentionally set a fire and burn their house down.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
D. The value of an insured's home decreases due to a lack of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
maintenance. - CORRECT ANSWERS ✔✔B. An unknown vandal |\ |\ |\ |\ |\ |\ |\ |\
spray-paints graffiti on the insured's garage. |\ |\ |\ |\ |\
An insurer will make a loss payment if an insured loss occurs and if
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the insured performs certain duties. This illustrates that an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
insurance policy is a |\ |\ |\
Select one: |\
A. Personal contract.
|\ |\
B. Contract of adhesion.
|\ |\ |\
C. Conditional contract.
|\ |\
D. Contract of indemnity. - CORRECT ANSWERS ✔✔C.
|\ |\ |\ |\ |\ |\ |\ |\
Conditional contract. |\
An insurer has decided to take an extremely narrow interpretation
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of a property insurance policy provision to limit the number of loss
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
payments it will need to make. It realizes that its interpretation is
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probably wrong, but it knows that individual insured's loss amounts
|\ |\ |\ |\ |\ |\ |\ |\ |\
will be small, such that most insureds will not take the trouble to
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
file lawsuits against it. The insurer may be violating the principle
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
that an insurance policy is
|\ |\ |\ |\
Select one: |\
A. A conditional contract.
|\ |\ |\
, B. A contract of adhesion.
|\ |\ |\ |\
C. A contract of indemnity.
|\ |\ |\ |\
D. A contract of utmost good faith. - CORRECT ANSWERS ✔✔D. A
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
contract of utmost good faith.
|\ |\ |\ |\ |\
Which one of the following types of insurance policies would be
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
most likely to incorporate state-specific statutory terms?
|\ |\ |\ |\ |\ |\
Select one: |\
A. Homeowners
|\
B. Professional liability
|\ |\
C. Auto
|\
D. Workers compensation - CORRECT ANSWERS ✔✔D. Workers
|\ |\ |\ |\ |\ |\ |\ |\
compensation
When preprinted forms do not provide the terms of coverage needed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
by a particular insured or small group of insureds, the insurer may
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Select one: |\
A. Draft a manuscript form to meet the customer's needs.
|\ |\ |\ |\ |\ |\ |\ |\ |\
B. Incorporate statutes into a policy.
|\ |\ |\ |\ |\
C. Ask the customer to resubmit an application.
|\ |\ |\ |\ |\ |\ |\
Questions WITH ANSWERS |\ |\
Adhering to the characteristics of an ideally insurable loss exposure
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
in selling insurance help assure that
|\ |\ |\ |\ |\
Select one: |\
A. The insurer is able to charge a premium that the insured can
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
afford to pay. |\ |\
B. The losses associated with it typically involve small amounts.
|\ |\ |\ |\ |\ |\ |\ |\ |\
C. The insurer is able to predict the amount and timing of each
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
future loss. |\
D. The insurer can charge a high premium for the coverage. -
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔A. The insurer is able to charge a |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
premium that the insured can afford to pay. |\ |\ |\ |\ |\ |\ |\
Claims supervisor Charlotte is reviewing the incoming claims for
|\ |\ |\ |\ |\ |\ |\ |\ |\
the day to decide which ones to assign to various claims reps. Of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
those claims, which one of the following descriptions will Charlotte
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
find is an example of a fortuitous loss?
|\ |\ |\ |\ |\ |\ |\
Select one: |\
A. An insured demolishes a deck that has been allowed to rot.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
B. An unknown vandal spray-paints graffiti on the insured's garage.
|\ |\ |\ |\ |\ |\ |\ |\ |\
,C. Insureds intentionally set a fire and burn their house down.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
D. The value of an insured's home decreases due to a lack of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
maintenance. - CORRECT ANSWERS ✔✔B. An unknown vandal |\ |\ |\ |\ |\ |\ |\ |\
spray-paints graffiti on the insured's garage. |\ |\ |\ |\ |\
An insurer will make a loss payment if an insured loss occurs and if
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the insured performs certain duties. This illustrates that an
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
insurance policy is a |\ |\ |\
Select one: |\
A. Personal contract.
|\ |\
B. Contract of adhesion.
|\ |\ |\
C. Conditional contract.
|\ |\
D. Contract of indemnity. - CORRECT ANSWERS ✔✔C.
|\ |\ |\ |\ |\ |\ |\ |\
Conditional contract. |\
An insurer has decided to take an extremely narrow interpretation
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of a property insurance policy provision to limit the number of loss
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
payments it will need to make. It realizes that its interpretation is
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
probably wrong, but it knows that individual insured's loss amounts
|\ |\ |\ |\ |\ |\ |\ |\ |\
will be small, such that most insureds will not take the trouble to
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
file lawsuits against it. The insurer may be violating the principle
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
that an insurance policy is
|\ |\ |\ |\
Select one: |\
A. A conditional contract.
|\ |\ |\
, B. A contract of adhesion.
|\ |\ |\ |\
C. A contract of indemnity.
|\ |\ |\ |\
D. A contract of utmost good faith. - CORRECT ANSWERS ✔✔D. A
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
contract of utmost good faith.
|\ |\ |\ |\ |\
Which one of the following types of insurance policies would be
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
most likely to incorporate state-specific statutory terms?
|\ |\ |\ |\ |\ |\
Select one: |\
A. Homeowners
|\
B. Professional liability
|\ |\
C. Auto
|\
D. Workers compensation - CORRECT ANSWERS ✔✔D. Workers
|\ |\ |\ |\ |\ |\ |\ |\
compensation
When preprinted forms do not provide the terms of coverage needed
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
by a particular insured or small group of insureds, the insurer may
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Select one: |\
A. Draft a manuscript form to meet the customer's needs.
|\ |\ |\ |\ |\ |\ |\ |\ |\
B. Incorporate statutes into a policy.
|\ |\ |\ |\ |\
C. Ask the customer to resubmit an application.
|\ |\ |\ |\ |\ |\ |\
