AINS 101 INCREASING YOUR
INSURANCE IQ EXAM WITH CORRECT
ANSWERS 2025
Actual Cash Value (ACV) ( correct answers ) The cost to replace
property with new property of like kind and quality less depreciation.
Adverse Selection ( correct answers ) Insuring individuals with a high
probability of loss at a cost lower than the insurer would normally charge
for that risk because it wasn't aware of the actual risk involved.
Binder ( correct answers ) A temporary written or oral agreement
to provide insurance coverage until a formal written policy is issued.
Book of Business ( correct answers ) A group of policies with a common
characteristic, such as territory or type of coverage, or all policies written by
a particular insurer or agency.
Broker ( correct answers ) An independent producer who represents
insurance customers.
Brokerage ( correct answers ) Compensation in the form of a flat fee
or a commission that is paid by the reinsurer to the reinsurance
intermediary for services provided.
Capacity ( correct answers ) The amount of business an insurer is able
to write, usually based on a comparison of the insurer's written premiums
to its policyholders' surplus.
Catastrophe Model ( correct answers ) A type of computer program that
estimates losses from future potential catastrophic events.
Certificate of Insurance ( correct answers ) A brief description of insurance
coverage prepared by an insurer or its agent and commonly used by
policyholders to provide evidence of insurance.
Claim ( correct answers ) A demand by a person or business seeking to
recover from an insurer for a loss that may be covered by an insurance
policy.
Claimant ( correct answers ) A party that makes a claim and that can be
either a first- party claimant or a third-party claimant.
, Claims Representative ( correct answers ) A person responsible for
investigating, evaluating, and settling claims.
Compensatory Damages ( correct answers ) A payment awarded
by a court to reimburse a victim for actual harm.
Condition ( correct answers ) Any provision in an insurance policy that
qualifies an otherwise enforceable promise of the insurer.
Conditional Contract( correct answers ) A contract that one or more
parties must perform only under certain conditions.
Contract of Adhesion ( correct answers ) Any contract in which one party
must either accept the agreement as written by the other party or reject it.
Contract of Indemnity ( correct answers ) A contract in which the insurer
agrees, in the event of a covered loss, to pay an amount directly related to
the amount of the loss.
Damages ( correct answers ) Money claimed by, or a monetary award to,
a party who has suffered loss or injury for which another party is legally
responsible.
Declarations Page ( correct answers ) An insurance policy information
page or pages providing specific details about the insured and the subject of
the insurance.
Deductible ( correct answers ) A portion of a covered loss that is not
paid by an insurer.
Depreciation ( correct answers ) The reduction in value caused by the
physical wear and tear or technological or economic obsolescence of
property.
Exclusion ( correct answers ) A policy provision that eliminates
coverage for specified exposures.
Exposure Unit ( correct answers ) The unit of measure (for example,
area, gross receipts, payroll) used to determine an insurance policy
premium.
Fortuitous Loss ( correct answers ) A loss that is accidental and
unexpected.
General damages ( correct answers ) A monetary award to compensate
a victim for losses, such as pain and suffering that does not involve specific,
measurable expenses.
Indemnify ( correct answers ) To restore a party who has sustained a
loss to the same financial position that party held before the loss
occurred.
INSURANCE IQ EXAM WITH CORRECT
ANSWERS 2025
Actual Cash Value (ACV) ( correct answers ) The cost to replace
property with new property of like kind and quality less depreciation.
Adverse Selection ( correct answers ) Insuring individuals with a high
probability of loss at a cost lower than the insurer would normally charge
for that risk because it wasn't aware of the actual risk involved.
Binder ( correct answers ) A temporary written or oral agreement
to provide insurance coverage until a formal written policy is issued.
Book of Business ( correct answers ) A group of policies with a common
characteristic, such as territory or type of coverage, or all policies written by
a particular insurer or agency.
Broker ( correct answers ) An independent producer who represents
insurance customers.
Brokerage ( correct answers ) Compensation in the form of a flat fee
or a commission that is paid by the reinsurer to the reinsurance
intermediary for services provided.
Capacity ( correct answers ) The amount of business an insurer is able
to write, usually based on a comparison of the insurer's written premiums
to its policyholders' surplus.
Catastrophe Model ( correct answers ) A type of computer program that
estimates losses from future potential catastrophic events.
Certificate of Insurance ( correct answers ) A brief description of insurance
coverage prepared by an insurer or its agent and commonly used by
policyholders to provide evidence of insurance.
Claim ( correct answers ) A demand by a person or business seeking to
recover from an insurer for a loss that may be covered by an insurance
policy.
Claimant ( correct answers ) A party that makes a claim and that can be
either a first- party claimant or a third-party claimant.
, Claims Representative ( correct answers ) A person responsible for
investigating, evaluating, and settling claims.
Compensatory Damages ( correct answers ) A payment awarded
by a court to reimburse a victim for actual harm.
Condition ( correct answers ) Any provision in an insurance policy that
qualifies an otherwise enforceable promise of the insurer.
Conditional Contract( correct answers ) A contract that one or more
parties must perform only under certain conditions.
Contract of Adhesion ( correct answers ) Any contract in which one party
must either accept the agreement as written by the other party or reject it.
Contract of Indemnity ( correct answers ) A contract in which the insurer
agrees, in the event of a covered loss, to pay an amount directly related to
the amount of the loss.
Damages ( correct answers ) Money claimed by, or a monetary award to,
a party who has suffered loss or injury for which another party is legally
responsible.
Declarations Page ( correct answers ) An insurance policy information
page or pages providing specific details about the insured and the subject of
the insurance.
Deductible ( correct answers ) A portion of a covered loss that is not
paid by an insurer.
Depreciation ( correct answers ) The reduction in value caused by the
physical wear and tear or technological or economic obsolescence of
property.
Exclusion ( correct answers ) A policy provision that eliminates
coverage for specified exposures.
Exposure Unit ( correct answers ) The unit of measure (for example,
area, gross receipts, payroll) used to determine an insurance policy
premium.
Fortuitous Loss ( correct answers ) A loss that is accidental and
unexpected.
General damages ( correct answers ) A monetary award to compensate
a victim for losses, such as pain and suffering that does not involve specific,
measurable expenses.
Indemnify ( correct answers ) To restore a party who has sustained a
loss to the same financial position that party held before the loss
occurred.
