AINS 101 EXAM WITH 110+ QUESTIONS AND
CORRECT ANSWERS
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 - ANSWER -b. specific characteristics of the insured's
operation
Which one of the following statements is correct regarding
the interaction between risk control and other insurer
functions?
Select one:
A. Risk control representatives are responsible for
compiling all the information required for a premium audit.
B. A risk control evaluation can make the difference
between the applicant's being rejected or accepted by the
underwriter.
C. Risk control representatives compile detailed data
for the actuarial department to use in establishing rates.
D. Risk control personnel are responsible for
ANSWERing any complex questions that insureds have
about premium audits. - ANSWER -B. A risk control
evaluation can make the difference between the applicant's
being rejected or accepted by the underwriter.
Brian works in the Underwriting department for DGH
Insurance. In addition to carefully selecting insureds, he
works with producers and premium auditors to ensure
accurate classification and pricing. Brian is a Select one:
A. Account manager
B. Staff underwriter
C. Field underwriter
D. Corporate underwriter - ANSWER -C. Field underwriter
Tony now works at the corporate level for Newtown
Insurance. He is considered a staff underwriter. Which one
,of the following is primarily a responsibility of staff
underwriters?
Select one:
A. Manage a book of business
B. Support producers
C. Revise underwriting guidelines
D. Recommend coverage - ANSWER -C. Revise
underwriting guidelines
Exposure unit to the type of insurance it's typically used for:
Each vehicle - ANSWER -auto
Exposure unit to the type of insurance it's typically used for:
Each $100 of insured value - ANSWER -commercial property
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of gross sales - ANSWER -general liability
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of insured value - ANSWER -homeowners
Exposure unit to the type of insurance it's typically used for:
Each $100 of payroll - ANSWER -workers 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. - ANSWER -Javier
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. - ANSWER -Kenneth
Belinda is a claims professional who works outside her organization's office. She
generally handles claims that require investigating the scene of a loss; resolving
complex investigative issues; and meeting with insureds, claimants, lawyers, and others
involved in a claim. What type of claims representative is she? a. Telephone claims
representative
b. Claims manager
,c. Claims supervisor
d. Field claims representative - ANSWER -d. Field claims representative
If Tania needed to consult an accident-scene reconstruction specialist, she would
have been engaged in which one of these claims hand ling activities? a. Investigating
and documenting the claim.
b. Contacting the insured or the insured's representative
c. Identifying the policy that may cover the claim
d. Acknowledging a claim and assigning it to the claims representative - ANSWER -a.
Investigating and documenting the claim.
Using the previous example, let's say the couch destroyed in the fire has a ten-year
lifespan and replacement value of $800. If it was four years old and insured for its actual
cash value, how much would the policyholder receive? a. $480 b. $800
c. $380
d. $600 - ANSWER -a. $480
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 - ANSWER -c. obtaining personal auto
insurance
The best indication of an insurer's overall financial health is the - ANSWER
policyholders surplus (It shows how much cash an insurer has on hand for
emergencies, unexpected losses, and expansion of business)
Combined ratio = - ANSWER -loss ratio + expense ratio
expense ratio = - ANSWER -incurred underwriting expenses / written premiums
loss ratio = - ANSWER -incurred losses (including loss adjustment expenses) / earned
premiums
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 - ANSWER -b. 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 - ANSWER -b. Commercial Crime
reimburses the insured for the cost of replacing the property, minus depreciation -
ANSWER -actual cash value
The maximum amount that will be paid in the event of a loss is set by the insured and
insurer at the time the policy is written. - ANSWER -agreed value
reimburses the insured for the cost of replacing the property - ANSWER -replacement
value
_____ reimburse a victim for actual harm - ANSWER -compensatory damages
are awarded to punish a defendant for reckless, malicious, or deceitful acts - ANSWER
-punitive damages
are awarded for specific, identifiable expenses associated with the injured person's loss
- ANSWER -special damages
awarded to compensate a victim for losses such as pain and suffering - ANSWER -
general damages
investing in the stock market is an example of _____ risk - ANSWER -speculative
driving a car is an example of ____ risk - ANSWER -pure
the principle that prevents an insured from profiting from owning an insurance policy -
ANSWER -indemnity
a self-employed hairstylist wants to make sure she's covered in case a client sues her.
Her agent suggests a ____ policy. - ANSWER -manuscript
unique information on the insured; list of forms included in policy - ANSWER -
declarations
CORRECT ANSWERS
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 - ANSWER -b. specific characteristics of the insured's
operation
Which one of the following statements is correct regarding
the interaction between risk control and other insurer
functions?
Select one:
A. Risk control representatives are responsible for
compiling all the information required for a premium audit.
B. A risk control evaluation can make the difference
between the applicant's being rejected or accepted by the
underwriter.
C. Risk control representatives compile detailed data
for the actuarial department to use in establishing rates.
D. Risk control personnel are responsible for
ANSWERing any complex questions that insureds have
about premium audits. - ANSWER -B. A risk control
evaluation can make the difference between the applicant's
being rejected or accepted by the underwriter.
Brian works in the Underwriting department for DGH
Insurance. In addition to carefully selecting insureds, he
works with producers and premium auditors to ensure
accurate classification and pricing. Brian is a Select one:
A. Account manager
B. Staff underwriter
C. Field underwriter
D. Corporate underwriter - ANSWER -C. Field underwriter
Tony now works at the corporate level for Newtown
Insurance. He is considered a staff underwriter. Which one
,of the following is primarily a responsibility of staff
underwriters?
Select one:
A. Manage a book of business
B. Support producers
C. Revise underwriting guidelines
D. Recommend coverage - ANSWER -C. Revise
underwriting guidelines
Exposure unit to the type of insurance it's typically used for:
Each vehicle - ANSWER -auto
Exposure unit to the type of insurance it's typically used for:
Each $100 of insured value - ANSWER -commercial property
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of gross sales - ANSWER -general liability
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of insured value - ANSWER -homeowners
Exposure unit to the type of insurance it's typically used for:
Each $100 of payroll - ANSWER -workers 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. - ANSWER -Javier
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. - ANSWER -Kenneth
Belinda is a claims professional who works outside her organization's office. She
generally handles claims that require investigating the scene of a loss; resolving
complex investigative issues; and meeting with insureds, claimants, lawyers, and others
involved in a claim. What type of claims representative is she? a. Telephone claims
representative
b. Claims manager
,c. Claims supervisor
d. Field claims representative - ANSWER -d. Field claims representative
If Tania needed to consult an accident-scene reconstruction specialist, she would
have been engaged in which one of these claims hand ling activities? a. Investigating
and documenting the claim.
b. Contacting the insured or the insured's representative
c. Identifying the policy that may cover the claim
d. Acknowledging a claim and assigning it to the claims representative - ANSWER -a.
Investigating and documenting the claim.
Using the previous example, let's say the couch destroyed in the fire has a ten-year
lifespan and replacement value of $800. If it was four years old and insured for its actual
cash value, how much would the policyholder receive? a. $480 b. $800
c. $380
d. $600 - ANSWER -a. $480
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 - ANSWER -c. obtaining personal auto
insurance
The best indication of an insurer's overall financial health is the - ANSWER
policyholders surplus (It shows how much cash an insurer has on hand for
emergencies, unexpected losses, and expansion of business)
Combined ratio = - ANSWER -loss ratio + expense ratio
expense ratio = - ANSWER -incurred underwriting expenses / written premiums
loss ratio = - ANSWER -incurred losses (including loss adjustment expenses) / earned
premiums
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 - ANSWER -b. 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 - ANSWER -b. Commercial Crime
reimburses the insured for the cost of replacing the property, minus depreciation -
ANSWER -actual cash value
The maximum amount that will be paid in the event of a loss is set by the insured and
insurer at the time the policy is written. - ANSWER -agreed value
reimburses the insured for the cost of replacing the property - ANSWER -replacement
value
_____ reimburse a victim for actual harm - ANSWER -compensatory damages
are awarded to punish a defendant for reckless, malicious, or deceitful acts - ANSWER
-punitive damages
are awarded for specific, identifiable expenses associated with the injured person's loss
- ANSWER -special damages
awarded to compensate a victim for losses such as pain and suffering - ANSWER -
general damages
investing in the stock market is an example of _____ risk - ANSWER -speculative
driving a car is an example of ____ risk - ANSWER -pure
the principle that prevents an insured from profiting from owning an insurance policy -
ANSWER -indemnity
a self-employed hairstylist wants to make sure she's covered in case a client sues her.
Her agent suggests a ____ policy. - ANSWER -manuscript
unique information on the insured; list of forms included in policy - ANSWER -
declarations
