AINS 101 FINAL EXAM CORE QUESTIONS WITH ANSWERS
GRADED A+
✔✔A liability loss has the following damages:
Medical expenses:$10,000Damages for disfigurement:$50,000Damages for pain and
suffering:$100,000
What is the amount of special damages? - ✔✔$ 10,000
✔✔Special damages - ✔✔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, - ✔✔Insured and
claimant and claims representative
✔✔Earned premiums are the portion of written premiums that - ✔✔Apply to the part of
the policy period that has already occurred.
✔✔Which one of these is most directly associated with a satisfied customer? -
✔✔Leads and referrals that can be used to generate new business
✔✔For a loss exposure to be ideally insurable it must be definite in - ✔✔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 - ✔✔Contract of utmost good faith.
✔✔Which two of the four quadrants of risk are classified as pure risks? - ✔✔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? - ✔✔Promote risk control activity
✔✔The processing of almost every claim involves which one of the following activities?
- ✔✔Determining the amount of damages or extent of loss
✔✔Erin has recently graduated from college and relocated to Chicago. She has
purchased a car and rented an apartment and now needs to purchase insurance. She is
comfortable buying from social media recommendations and recently was impressed
with an insurer sending her coverage details online with a minimum of forms and
, salesperson interactions. Which one of the following is likely the best distribution
channel to meet Erin's needs? - ✔✔Direct response
✔✔direct response distribution channel - ✔✔using social media, email blasts, website
ads, and direct mail would be the best
✔✔Risk control can assist the claims department by - ✔✔Providing laboratory analyses.
✔✔All of the following are sources of underwriting information to evaluate an insurance
submission, EXCEPT: - ✔✔Underwriting authority reports
✔✔Allian Insurance Company is a growing regional insurer selling policies in three
states, specializing in personal auto and homeowners policies. Which one of the
following is most likely true regarding Allian and the policies it sells? - ✔✔Allian issues
more preprinted policies than manuscript forms.
✔✔Winston is skimming through his new personal auto policy that just arrived. Winston
discovers that every insurance policy is represented through a collection of policy
provisions. He discovers all of the following policy provisions, EXCEPT: - ✔✔Exceptions
✔✔policy provisions - ✔✔conditions, definitions, and declarations.
The other two main provisions in a policy are the insuring agreement, and the
exclusions.
✔✔Joe is the owner of JG Auto Repair. He is always frustrated with the amount of
commercial insurance premium he pays every year, even though he has not had a
single claim in over 10 years. Joe is looking to partner with an insurance company that
will share its profits and maybe return a portion of his premium if the results are good.
Which one of the following types of insurer is the right fit for Joe? - ✔✔Mutual insurer
✔✔Mutual insurer - ✔✔owned by its policyholders and formed as a corporation for the
purpose of providing insurance to them. To share profits, mutual insurers may pay
dividends to policyholders as a return of a portion of premiums paid.
✔✔Michael is a commercial lines underwriter. He received a risk control report on a new
business that he had recently written with Laura, one of his producers. After reviewing
the report, Michael contacted Laura to let her know that they needed to process a policy
change request adding a new classification and some exposures to the general liability
policy. These activities are occurring during which one of the following steps of the
underwriting process? - ✔✔Monitor the underwriting decision
✔✔Earned premiums are shown on an insurer's income statement because they are -
✔✔Revenues
GRADED A+
✔✔A liability loss has the following damages:
Medical expenses:$10,000Damages for disfigurement:$50,000Damages for pain and
suffering:$100,000
What is the amount of special damages? - ✔✔$ 10,000
✔✔Special damages - ✔✔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, - ✔✔Insured and
claimant and claims representative
✔✔Earned premiums are the portion of written premiums that - ✔✔Apply to the part of
the policy period that has already occurred.
✔✔Which one of these is most directly associated with a satisfied customer? -
✔✔Leads and referrals that can be used to generate new business
✔✔For a loss exposure to be ideally insurable it must be definite in - ✔✔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 - ✔✔Contract of utmost good faith.
✔✔Which two of the four quadrants of risk are classified as pure risks? - ✔✔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? - ✔✔Promote risk control activity
✔✔The processing of almost every claim involves which one of the following activities?
- ✔✔Determining the amount of damages or extent of loss
✔✔Erin has recently graduated from college and relocated to Chicago. She has
purchased a car and rented an apartment and now needs to purchase insurance. She is
comfortable buying from social media recommendations and recently was impressed
with an insurer sending her coverage details online with a minimum of forms and
, salesperson interactions. Which one of the following is likely the best distribution
channel to meet Erin's needs? - ✔✔Direct response
✔✔direct response distribution channel - ✔✔using social media, email blasts, website
ads, and direct mail would be the best
✔✔Risk control can assist the claims department by - ✔✔Providing laboratory analyses.
✔✔All of the following are sources of underwriting information to evaluate an insurance
submission, EXCEPT: - ✔✔Underwriting authority reports
✔✔Allian Insurance Company is a growing regional insurer selling policies in three
states, specializing in personal auto and homeowners policies. Which one of the
following is most likely true regarding Allian and the policies it sells? - ✔✔Allian issues
more preprinted policies than manuscript forms.
✔✔Winston is skimming through his new personal auto policy that just arrived. Winston
discovers that every insurance policy is represented through a collection of policy
provisions. He discovers all of the following policy provisions, EXCEPT: - ✔✔Exceptions
✔✔policy provisions - ✔✔conditions, definitions, and declarations.
The other two main provisions in a policy are the insuring agreement, and the
exclusions.
✔✔Joe is the owner of JG Auto Repair. He is always frustrated with the amount of
commercial insurance premium he pays every year, even though he has not had a
single claim in over 10 years. Joe is looking to partner with an insurance company that
will share its profits and maybe return a portion of his premium if the results are good.
Which one of the following types of insurer is the right fit for Joe? - ✔✔Mutual insurer
✔✔Mutual insurer - ✔✔owned by its policyholders and formed as a corporation for the
purpose of providing insurance to them. To share profits, mutual insurers may pay
dividends to policyholders as a return of a portion of premiums paid.
✔✔Michael is a commercial lines underwriter. He received a risk control report on a new
business that he had recently written with Laura, one of his producers. After reviewing
the report, Michael contacted Laura to let her know that they needed to process a policy
change request adding a new classification and some exposures to the general liability
policy. These activities are occurring during which one of the following steps of the
underwriting process? - ✔✔Monitor the underwriting decision
✔✔Earned premiums are shown on an insurer's income statement because they are -
✔✔Revenues
