AINS 101 First Exam Practice Questions (Exam Questions
and Answers A+ Graded (2024-2025)
A. The insurer is able to charge a premium that the insured can afford to pay. - ANSWER- 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.
B. An unknown vandal spray-paints graffiti on the insured's garage. - ANSWER- 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.
,C. Conditional contract. - ANSWER- 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.
D. A contract of utmost good faith. - ANSWER- 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.
D. Workers compensation - ANSWER- 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
A. Draft a manuscript form to meet the customer's needs. - ANSWER- 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.
D. Work with an advisory organization to develop a form.
A. Insuring Agreements - ANSWER- The big differences between property and liability policies
are found in their
Select one:
A. Insuring Agreements
B. Exclusions
C. Conditions
D. Definitions
and Answers A+ Graded (2024-2025)
A. The insurer is able to charge a premium that the insured can afford to pay. - ANSWER- 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.
B. An unknown vandal spray-paints graffiti on the insured's garage. - ANSWER- 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.
,C. Conditional contract. - ANSWER- 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.
D. A contract of utmost good faith. - ANSWER- 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.
D. Workers compensation - ANSWER- 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
A. Draft a manuscript form to meet the customer's needs. - ANSWER- 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.
D. Work with an advisory organization to develop a form.
A. Insuring Agreements - ANSWER- The big differences between property and liability policies
are found in their
Select one:
A. Insuring Agreements
B. Exclusions
C. Conditions
D. Definitions
