AINS 101: Practice Questions and Answers (Graded A+)

AINS 101: Practice Questions and Answers (Graded A+) Joe and Helene are married with two teenage children and two dogs. They own three cars and a large house with a swimming pool in the back yard. Their insurance agent advised them that the pool, teenage drivers, and dogs put them at risk for large liability losses. Which one of the following personal property-casualty insurance policies would provide them with protection for their high potential for large liability losses? - answerA. Personal auto B. Homeowners C. Personal umbrella D. Health insurance Earned premiums are the portion of written premiums that... - answerA. Apply to the part of the policy period that has already occurred. B. Are available to generate investment income. C. Apply to the part of the policy period that follows a loss. D. Are billed at the beginning of the policy period. Which one of the following is the correct formula for calculating an insurer's combined ratio? - answerA. Loss ratio + underwriting ratio B. Loss ratio + expense ratio C. Investment income ratio + overall operating ratio D. Investment income ratio + premium income ratio Earned premiums are shown on an insurer's income statement because they are... - answerA. Expenses. B. Revenues. C. Admitted assets. D. Equal to net income. A liability loss has the following damages: Medical expenses: $10,000 Damages for disfigurement: $50,000 Damages for pain and suffering: $100,000 What is the amount of special damages? - answerA. $ 10,000 B. $ 50,000 C. $100,000 D. $160,000 Destructive competition in the insurance industry could result in... - answerA. Inadequate regulation. B. Insurance shortages. C. Excess regulation. D. Oversupply of insurance. A stock insurer differs from a reciprocal insurance exchange in which one of the following ways? - answerA. Stockholders own a stock insurer. Members own a reciprocal insurance exchan