AINS 101 MAIN TIPS ANSWERS AND QUESTIONS SET
A+
✔✔Four questions to ask when processing a property insurance claim: - ✔✔1. Does the
insured have an insurable interest in the property?
2. Is the damaged property covered by the policy?
3. Is the cause of loss covered by the policy?
4. Do any additional coverages, endorsements, or coverage limitations apply?
✔✔Three valuation methods used to determine the value of the property that was
damaged in a loss: - ✔✔1. Actual cash value method
2. The replacement cost basis
3. The agreed value method
✔✔Actual Cash Value Method - ✔✔Factors depreciation, which is a reduction in value
due to physical wear and tear, into the replacement cost
✔✔Replacement Cost Basis Method - ✔✔Does not consider depreciation, but focuses
on initial cost paid for the item
✔✔Agreed Value Method - ✔✔A method of evaluating property that is used to insure
property that is difficult to value, such as fine arts, antiques, or collections
✔✔Two factors that can affect an insurer's cost for a property claim: - ✔✔1. Subrogation
2. Salvage Rights
✔✔Subrogation - ✔✔A process through which an insurer can recover from another
party an amount it paid as a loss. This becomes possible if another party caused the
loss or insured the party who caused it.
✔✔Salvage Rights - ✔✔Allows the insurer to take possession of the insured property for
which it has paid a total loss
, ✔✔What is the key difference between handling a property claim vs. a liability claim? -
✔✔Determining whether the insured is legally responsible for the loss
✔✔Two main types of damages awarding in a liability suit: - ✔✔1. Compensatory
Damages
2. Punitive Damages
✔✔Compensatory Damages: - ✔✔Are awarded to reimburse a victim for harm
experienced. They include special damages and general damages.
✔✔Special damages (Compensatory) - ✔✔Cover specific losses, such as medical
expenses or lost wages
✔✔General damages (compensatory) - ✔✔Awarded for losses that do not have a
specific economic value, such as pain and suffering; disfigurement. Because these do
not involve measurable expenses, estimating their dollar value requires considerable
expertise + past settlements.
✔✔Punitive Damages - ✔✔Monetary damages issued to punish defendants for
reckless, malicious, or deceitful acts - and to deter others from doing the same.
✔✔What are some activities that producers perform? - ✔✔- Sales
- Risk management review
- Policy issuance
- Premium collection
- Customer service
- claims handling
✔✔What is the most important function that a producer can perform? - ✔✔
✔✔What is the function of Customer Service Representatives (CSRs)? - ✔✔- Selling
products
- Handle general inquiries
- Answer billing inquiries
- Process policy endorsements
- Explain coverage
✔✔Why is building customer loyalty important? - ✔✔Excellent service builds strong
relationships and customer loyalty. This is important in insurance because profitability is
directly linked to customer retention.
✔✔4-step Producer Risk-Management Process - ✔✔1. Establish the standards of
acceptable performance
2. Compare actual results with the standards
3. Correct substandard performance or revise standards
A+
✔✔Four questions to ask when processing a property insurance claim: - ✔✔1. Does the
insured have an insurable interest in the property?
2. Is the damaged property covered by the policy?
3. Is the cause of loss covered by the policy?
4. Do any additional coverages, endorsements, or coverage limitations apply?
✔✔Three valuation methods used to determine the value of the property that was
damaged in a loss: - ✔✔1. Actual cash value method
2. The replacement cost basis
3. The agreed value method
✔✔Actual Cash Value Method - ✔✔Factors depreciation, which is a reduction in value
due to physical wear and tear, into the replacement cost
✔✔Replacement Cost Basis Method - ✔✔Does not consider depreciation, but focuses
on initial cost paid for the item
✔✔Agreed Value Method - ✔✔A method of evaluating property that is used to insure
property that is difficult to value, such as fine arts, antiques, or collections
✔✔Two factors that can affect an insurer's cost for a property claim: - ✔✔1. Subrogation
2. Salvage Rights
✔✔Subrogation - ✔✔A process through which an insurer can recover from another
party an amount it paid as a loss. This becomes possible if another party caused the
loss or insured the party who caused it.
✔✔Salvage Rights - ✔✔Allows the insurer to take possession of the insured property for
which it has paid a total loss
, ✔✔What is the key difference between handling a property claim vs. a liability claim? -
✔✔Determining whether the insured is legally responsible for the loss
✔✔Two main types of damages awarding in a liability suit: - ✔✔1. Compensatory
Damages
2. Punitive Damages
✔✔Compensatory Damages: - ✔✔Are awarded to reimburse a victim for harm
experienced. They include special damages and general damages.
✔✔Special damages (Compensatory) - ✔✔Cover specific losses, such as medical
expenses or lost wages
✔✔General damages (compensatory) - ✔✔Awarded for losses that do not have a
specific economic value, such as pain and suffering; disfigurement. Because these do
not involve measurable expenses, estimating their dollar value requires considerable
expertise + past settlements.
✔✔Punitive Damages - ✔✔Monetary damages issued to punish defendants for
reckless, malicious, or deceitful acts - and to deter others from doing the same.
✔✔What are some activities that producers perform? - ✔✔- Sales
- Risk management review
- Policy issuance
- Premium collection
- Customer service
- claims handling
✔✔What is the most important function that a producer can perform? - ✔✔
✔✔What is the function of Customer Service Representatives (CSRs)? - ✔✔- Selling
products
- Handle general inquiries
- Answer billing inquiries
- Process policy endorsements
- Explain coverage
✔✔Why is building customer loyalty important? - ✔✔Excellent service builds strong
relationships and customer loyalty. This is important in insurance because profitability is
directly linked to customer retention.
✔✔4-step Producer Risk-Management Process - ✔✔1. Establish the standards of
acceptable performance
2. Compare actual results with the standards
3. Correct substandard performance or revise standards
