AINS 101 | 112 Question with 100 % correct answers | Verified

AINS 101 | 112 Question with 100 % correct answers | Verified Margaret was severely injured and scarred due to a recent accident. Which one of the following is an example of general damages Margaret received? - ANSWER - Compensation for disfigurement Donna is an insurance producer. She makes an appointment with potential policyholder Sandie to review her loss exposures. She asks Sandie to complete a questionnaire to assist her in this effort. Donna is conducting a - ANSWER -Risk management review Rachel is a new employee of Westley Insurance, and has been asked to review some existing policies to become familiar with the types of policies she will be working with. Which one of the following will Rachel find is true as she conducts her review? - ANSWER -Rachel finds the policy begins with a coverage overview and then goes into more coverage details. Sports, Inc. is looking to obtain a commercial property policy on its building for $400,000. If their insurer decides to charge them a rate of $0.50 per $100 of building insurance, what premium must Sports, Inc. pay? - ANSWER -$2,000 Destructive competition in the insurance industry could result in - ANSWER -Insurance shortages The financial report for Hometown Insurer contains the following information: Earned premiums$4,000,000Written premiums$5,000,000Net investment income$1,000,000Incurred losses$3,000,000Incurred underwriting expenses$2,000,000 What is Hometown Insurer's loss ratio? - ANSWER -75% Loss Ratio - ANSWER -incurred losses divided by its earned premiums Jessie is a new customer service representative (CSR) at the Winfield Agency. Jessie usually engages in all the following activities, EXCEPT: - ANSWER -Determining coverage quotes Riley Turner is performing a comprehensive evaluation of Hardwick Enterprises to make sure its insurance and risk management efforts are serving the organization appropriately. Which one of the following will be true in regard to this effort? - ANSWER -Besides risk management goals being attainable, they should also pose a challenge. Rachel is considering investing in the stock of an insurance company. Which one of the following is likely to provide the best indication of the insurer's financial position at this point in time? - ANSWER -Balance sheet Balance Sheet - ANSWER -provides the best indication of its financial position because it shows admitted assets, liabilities, and policyholders' surplus at a particular point in time. Which one of the following is the amount of business an insurer can write based on regulatory guidelines, usually a comparsion of the insurer's written premiums to the policyholders' surplus? - ANSWER -Capacity The two main sectors of the insurance industry are - ANSWER -Property-casualty insurance and life-health insurance The difference between an independent agency and an exclusive agency is that an - ANSWER -Exclusive agency is contracted to sell insurance for one insurer or group of insurers A liability loss has the following damages: Medical expenses:$10,000Damages for disfigurement:$50,000Damages for pain and suffering:$100,000 What is the amount of special damages? - ANSWER -$ 10,000 Special damages - ANSWER -specific, identifiable expenses Sean was driving and caused an injury to a pedestrian named Wilbur. In the context of the resulting claim made to Sean's insurance company and assigned to Andrea in the claims department, Sean and Wilbur and Andrea are, respectively, - ANSWER -Insured and claimant and claims representative Earned premiums are the portion of written premiums that - ANSWER -Apply to the part of the policy period that has already occurred. Bill is an insurance producer for and employed by ABC Insurance Company (ABC). He represents only ABC when marketing insurance products, and uses an administrative staff also employed by ABC. Bill is a producer in the - ANSWER -Direct writer marketing system Because the insurance company usually determines policy wording and the insured has little choice but to "take it or leave it," an insurance contract is a - ANSWER - Contract of adhesion At Greenfield Insurance Company, Bernadette and Rachel are corporate underwriters, and Tomas and Jose are field underwriters. All of the following are underwriting activities typically performed by corporate (or staff) underwriters like Bernadette and Rachel, EXCEPT: - ANSWER -Support producers and insureds Joel is the underwriter for Stanton Industries. He received a notice from the premium auditor on the account. After a recent visit to the insured's location, the auditor wanted to make Joel aware of a decline in the business and some questionable business practices. Which one of the following types of hazards is the auditor identifying? - ANSWER -Moral hazards Moral hazards - ANSWER -include questionable business practices or a failing business. James West is a claims rep with Hatters Insurance. As he learns how to handle a claim from start to finish, which one of the following best describes the correct order for him to follow during this process? - ANSWER -Identifying the policy, calculating a loss reserve, determining the cause of loss, preparing a loss statement Which one of the following best explains why producers should be alert to changes in clients' loss exposures? - ANSWER -Implemented risk management techniques may prove to be ineffective or become obsolete Which one of these is most directly associated with a satisfied customer? - ANSWER - Leads and referrals that can be used to generate new business For a loss exposure to be ideally insurable it must be definite in - ANSWER -Time, cause, and location. 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 - ANSWER -Contract of utmost good faith. Which two of the four quadrants of risk are classified as pure risks? - ANSWER - Hazard risks and operational risks Pravalt Construction Company pays less than its competitors for workers compensation insurance because Pravalt has had substantially fewer employee injuries than other firms in its class. This illustrates which one of the following benefits of insurance? - ANSWER -Promote risk control activity