AINS 101 Exam Questions with 100% Correct Answers | Verified

AINS 101 Exam Questions with 100% Correct Answers | Verified Which of the following is an example of a legal requirement for individuals that could be met through insurance? a. contributing to the growth of the organization b. paying for losses c. obtaining personal auto insurance d. providing a source of investment funds - answerc. obtaining personal auto insurance A fire destroys the kitchen in Rob and Laurie's home. Which insurance policy would provide coverage for the damage? a. Homeowners Policy (Personal Liability) b. Homeowners Policy (Property) c. Personal Umbrella Policy d. Personal Auto Policy - answerb. Homeowners Policy (Property) Which insurance policy could protect Rob and Laurie's sandwich shop against losses from employee theft? a. Workers Compensation b. Commercial Crime c. Commercial Property d. Commercial General Liability e. Commercial Auto - answerb. Commercial Crime The best indication of an insurer's overall financial health is the - answerpolicyholders surplus (It shows how much cash an insurer has on hand for emergencies, unexpected losses, and expansion of business) Combined ratio = - answerloss ratio + expense ratio expense ratio = - answerincurred underwriting expenses / written premiums loss ratio = - answerincurred losses (including loss adjustment expenses) / earned premiums Marco has been approved for a car insurance policy with a low premium because on his application he gave an address in a low-crime area. However, the actual address at which he lives and parks his car is in a high-crime area. What is this an example of? a. Growing capacity b. Adverse selection c. Creating surplus d. Following underwriting guidelines - answerb. Adverse selection Emily is the underwriter for Marco's account. What is one way she could detect and minimize instances of adverse selection such as this? a. Increase auto policy premiums b. Ensure adequate policyholders' surplus c. Monitor the book of business for unusual patterns of policy growth or losses d. Alter the underwriting guidelines - answerc. Monitor the book of business for unusual patterns of policy growth or losses These underwriters evaluate individual insurance applications and policy renewals and manage their own books of business. In many ways, they are the public face of the Underwriting Department - answerfield underwriters These underwriters make large-scale decisions about coverage, pricing, lines of business, and the overall risk selection process - answercorporate underwriters What do underwriters evaluate to determine the appropriate classification for a commercial operation? a. the insurer's book of business b. specific characteristics of the insured's operation c. the producer's years of experience on the job d. policy holders' surplus - answerb. specific characteristics of the insured's operation Exposure unit to the type of insurance it's typically used for: Each vehicle - answerauto Exposure unit to the type of insurance it's typically used for: Each $100 of insured value - answercommercial property Exposure unit to the type of insurance it's typically used for: Each $1,000 of gross sales - answergeneral liability Exposure unit to the type of insurance it's typically used for: Each $1,000 of insured value - answerhomeowners Exposure unit to the type of insurance it's typically used for: Each $100 of payroll - answerworkers comp Maria accidentally rear-ended Kenneth at a stop light. After the two made sure they were both uninjured, they exchanged insurance information. Shortly afterward, Kenneth called Maria's insurer and talked to Javier to report the damages to his car. ______ is the claim's representative. - answerJavier Maria accidentally rear-ended Kenneth at a stop light. After the two made sure they were both uninjured, they exchanged insurance information. Shortly afterward, Kenneth called Maria's insurer and talked to Javier to report the damages to his car. _____ is the claimant. - answerKenneth Belinda is a claims professional who works outside her organization's office. She generally handles claims that require inves