AINS 101 Exam Questions with 100% Correct Answers | Verified

AINS 101 Exam Questions with 100% Correct Answers | Verified One of the reasons for insurance regulation is to prevent destructive competition. In which one of the following scenarios would destructive competition be exhibited? - answerEast Insurance comes up with a new rate structure allowing "preferred customers" discounted policies when they continually renew year after year; East eventually loses needed revenue but is rewarded by its competitors leaving the market. Ling has noticed that her neighbor has recovered money for two homeowners property claims and an auto damage claim he has filed in recent years. Ling has been paying insurance premiums for many years and has never suffered a loss or made a claim. She feels that her insurance contracts over the years have been worthless to her. What Ling does not understand is that she has been paying premiums in exchange for - answerOf unequal amount. Private insurers are reluctant to provide windstorm insurance on coastal properties. This is because the loss exposures fail to meet the criterion that ideally insurable exposures must be - answerIndependent and not catastrophic. Because many properties can be damaged in the same hurricane or tropical storm, coastal properties are not independent, and potential losses are catastrophic. Which of the following is the fundamental measure of loss exposure used in insurance rating? - answerExposure Unit Which one of the following best explains why producers should be alert to changes in clients' loss exposures? - answerImplemented risk management techniques may prove to be ineffective or become obsolete Adhering to the characteristics of an ideally insurable loss exposure in selling insurance help assure that - answerThe insurer is able to charge a premium that the insured can afford to pay. 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 - answerA contract of the utmost good faith When preprinted forms do not provide the terms of coverage needed by a particular insured or small group of insureds, the insurer may - answerdraft a manuscript form to meet the customers needs. The big differences between property and liability policies are found in their - answerInsuring agreements which of the following most accurately describes one of the policy provisions in an insurance policy? - answerThe exclusions are in place to reduce duplicate coverage. Which one of these is most directly associated with a satisfied customer? - answerLeads and referrals that can be used to generate new business Because insurance contracts impose an obligation for ethical practices and behaviors on the parties while dealing with one another, an insurance contract is called a - answerContract of utmost good faith Margaret was severely injured and scarred due to a recent accident. Which one of the following is an example of general damages Margaret received? - answerCompensation for disfigureme