AINS REVIEW ALL CHAPTERS EXAM
WITH CORRECT ANSWERS 2025
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
Select one:
A. Contract of utmost good faith.
B. Conditional contract.
C. Contract of adhesion.
D. Contract of indemnity. ( correct answers ) A. Contract of utmost good
faith.
Sota's Superstore has recently become an insured of Keithly Insurance
Company. Kaito, Keithly's premium auditor, is being sent to conduct an
advance audit. Which one of the following tasks will Kaito do to assist
underwriting?
Select one:
E. Confirm the inventory values
F. Conduct initial loss control evaluation
G. Collect the premium
H.Classify the various exposures ( correct answers )
D. Classify the various exposures
Joe and Helene are married with two teenage children and two dogs. They
own three cars and a large house with a swimming pool in the back yard.
Their insurance agent advised them that the pool, teenage drivers, and
dogs put them at risk for large liability losses. Which one of the following
personal property-casualty insurance policies would provide them with
protection for their high potential for large liability losses?
Select one:
I. Personal auto
J. Personal umbrella
K. Homeowners
L. Health insurance ( correct answers ) B. Personal umbrella
Maria is a new producer who wears many hats when forming relationships
and then serving her established customers. In this capacity, which one of
the following scenarios most accurately describes her ongoing work wearing
the hat of "claims handler"?
Select one:
M.Customer Roland directly contacts Maria and she assumes full
responsibility for his claim as she was the first insurance employee to
receive the claims information.
N.Juanita directly contacts Maria who sold her a policy to adjust her
homeowners claim; Maria nicely explains she has no further responsibilities
after making the sale.
O.Veronica directly contacts Maria for guidance on how to report a
stolen car, Maria provides that, and claims rep Sean takes over after an
introduction from Maria.
, D. Alex directly contacts Maria after a hailstorm damages his new car the
day after he bought a policy from her, and she handles the claim as he is a
brand new cust ( correct answers ) C.
Veronica directly contacts Maria for guidance on how to report a stolen car,
Maria provides that, and claims rep Sean takes over after an introduction
from Maria.
Martina, a premium auditor for Cintriell Insurance Company is conducting a
premium audit for Carolina's Cookies. Carolina mentioned to Martina that
she is opening a coffee shop at another location. By sharing this information,
Martina would provide a contribution to which one of the following insurer
functions?
Select one:
A. Accounting
B. Risk Control
C. Claims
D. Underwriting ( correct answers ) D. Underwriting
John's two-year-old bicycle was stolen. The bicycle's purchase price was
$700, its current replacement cost is $800, and depreciation was
estimated at $450. What was the bicycle's actual cash value?
Select one:
A. $225
B. $350
C. $450
D. $800 ( correct answers ) B. $350
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
Select one:
A. Contract of indemnity.
B. Nontransferable contract.
C. Contract of adhesion.
D. Bilateral contract. ( correct answers ) C. Contract of adhesion.
The processing of almost every claim involves which one of the following
activities? Select one:
A. Salvaging
B. Engaging an accident scene reconstruction specialist
C. Subrogating
D. Determining the amount of damages or extent of loss
( correct answers ) D. Determining the
amount of damages or extent of loss
Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He
plans to drive it to special events at schools around the country where it will
serve as a mobile billboard to promote his product. Oscar is surprised to
learn that insurers are reluctant to insure his vehicle because it fails to meet
one of the ideal characteristics of an insurable risk. Which characteristic is
Oscar's vehicle least likely to meet?
WITH CORRECT ANSWERS 2025
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
Select one:
A. Contract of utmost good faith.
B. Conditional contract.
C. Contract of adhesion.
D. Contract of indemnity. ( correct answers ) A. Contract of utmost good
faith.
Sota's Superstore has recently become an insured of Keithly Insurance
Company. Kaito, Keithly's premium auditor, is being sent to conduct an
advance audit. Which one of the following tasks will Kaito do to assist
underwriting?
Select one:
E. Confirm the inventory values
F. Conduct initial loss control evaluation
G. Collect the premium
H.Classify the various exposures ( correct answers )
D. Classify the various exposures
Joe and Helene are married with two teenage children and two dogs. They
own three cars and a large house with a swimming pool in the back yard.
Their insurance agent advised them that the pool, teenage drivers, and
dogs put them at risk for large liability losses. Which one of the following
personal property-casualty insurance policies would provide them with
protection for their high potential for large liability losses?
Select one:
I. Personal auto
J. Personal umbrella
K. Homeowners
L. Health insurance ( correct answers ) B. Personal umbrella
Maria is a new producer who wears many hats when forming relationships
and then serving her established customers. In this capacity, which one of
the following scenarios most accurately describes her ongoing work wearing
the hat of "claims handler"?
Select one:
M.Customer Roland directly contacts Maria and she assumes full
responsibility for his claim as she was the first insurance employee to
receive the claims information.
N.Juanita directly contacts Maria who sold her a policy to adjust her
homeowners claim; Maria nicely explains she has no further responsibilities
after making the sale.
O.Veronica directly contacts Maria for guidance on how to report a
stolen car, Maria provides that, and claims rep Sean takes over after an
introduction from Maria.
, D. Alex directly contacts Maria after a hailstorm damages his new car the
day after he bought a policy from her, and she handles the claim as he is a
brand new cust ( correct answers ) C.
Veronica directly contacts Maria for guidance on how to report a stolen car,
Maria provides that, and claims rep Sean takes over after an introduction
from Maria.
Martina, a premium auditor for Cintriell Insurance Company is conducting a
premium audit for Carolina's Cookies. Carolina mentioned to Martina that
she is opening a coffee shop at another location. By sharing this information,
Martina would provide a contribution to which one of the following insurer
functions?
Select one:
A. Accounting
B. Risk Control
C. Claims
D. Underwriting ( correct answers ) D. Underwriting
John's two-year-old bicycle was stolen. The bicycle's purchase price was
$700, its current replacement cost is $800, and depreciation was
estimated at $450. What was the bicycle's actual cash value?
Select one:
A. $225
B. $350
C. $450
D. $800 ( correct answers ) B. $350
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
Select one:
A. Contract of indemnity.
B. Nontransferable contract.
C. Contract of adhesion.
D. Bilateral contract. ( correct answers ) C. Contract of adhesion.
The processing of almost every claim involves which one of the following
activities? Select one:
A. Salvaging
B. Engaging an accident scene reconstruction specialist
C. Subrogating
D. Determining the amount of damages or extent of loss
( correct answers ) D. Determining the
amount of damages or extent of loss
Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He
plans to drive it to special events at schools around the country where it will
serve as a mobile billboard to promote his product. Oscar is surprised to
learn that insurers are reluctant to insure his vehicle because it fails to meet
one of the ideal characteristics of an insurable risk. Which characteristic is
Oscar's vehicle least likely to meet?
