AINS 101 EXAM QUESTIONS
reimburse a victim for actual harm - ✔✔compensatory damages
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 - ✔✔b. Homeowners Policy (Property)
A homeowners policy is a type of
Select one:
A. Commercial insurance policy.
B. Personal umbrella policy.
C. Personal property-casualty insurance policy.
D. Life insurance policy. - ✔✔C. Personal property-casualty insurance policy.
A homeowners policy is a type of
Select one:
A. Personal umbrella policy.
B. Personal property-casualty insurance policy.
C. Commercial insurance policy.
D. Life insurance policy. - ✔✔B. Personal property-casualty insurance policy.
A liability adjuster must be concerned with specific, out-of-pocket expenses when
evaluating the damages being claimed. The technical term for such expenses is
Select one:
A. General damages.
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,B. Measurable damages.
C. Punitive damages.
D. Special damages. - ✔✔D. Special damages.
A liability adjuster must be concerned with specific, out-of-pocket expenses when
evaluating the damages being claimed. The technical term for such expenses is
Select one:
A. General damages.
B. Special damages.
C. Measurable damages.
D. Punitive damages. - ✔✔B. Special damages
A liability loss has the following damages:
Medical expenses: $10,000
Damages for disfigurement:
$50,000
Damages for pain and suffering:
$100,000 What is the amount of
general damages? Select one:
A. $ 60,000
B. $110,000
C. $150,000
D. $160,000 - ✔✔C. $150,000 (The amount of general damages is $150,000. General
damages are for losses that do not have a specific economic value.)
A person or entity that would suffer a financial loss if property were
damaged has Select one:
A. A contractual interest.
B. An insurable interest.
C. A renewable interest.
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,D. A discretionary interest. - ✔✔B. An insurable interest.
A reinsurance company
Select one:
A. Is formed to write all or part of the insurance for a parent company.
B. Transfers losses to a primary insurer.
C. Provides primary insurance for loss exposures that private insurers are unwilling to provide.
D. Assumes loss exposures from a primary insurer. - ✔✔D. Assumes loss exposures
from a primary insurer.
a self-employed hairstylist wants to make sure she's covered in case a client sues
her. Her agent suggests a policy. - ✔✔manuscript
ABC Company experienced a dramatic ideological shift in corporate policies after a national
election. This is an example of which one of the following quadrants of risk?
Select one:
A. Hazard risk
B. Strategic risk
C. Operational risk
D. Financial risk - ✔✔B. Strategic risk
ABC Company experienced a dramatic ideological shift in corporate policies after a national
election. This is an example of which one of the following quadrants of risk?
Select one:
A. Strategic risk
B. Hazard risk
C. Operational risk
D. Financial risk - ✔✔A. Strategic risk
Actual cash value (ACV) is
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, Select one:
A. Agreed value minus depreciation.
B. Replacement cost plus depreciation.
C. Replacement cost minus depreciation.
D. Replacement cost minus agreed value. - ✔✔C. Replacement cost minus depreciation.
Actual cash value (ACV)
is Select one:
A. Replacement cost plus depreciation.
B. Replacement cost minus agreed value.
C. Agreed value minus depreciation.
D. Replacement cost minus depreciation. - ✔✔D. Replacement cost minus depreciation.
Adhering to the characteristics of an ideally insurable loss exposure in selling insurance help
assure that Select one:
A. The insurer can charge a high premium for the coverage.
B. The insurer is able to charge a premium that the insured can afford to pay.
C. The insurer is able to predict the amount and timing of each future loss.
D. The losses associated with it typically involve small amounts. - ✔✔B. The insurer is able
to charge a premium that the insured can afford to pay.
Adhering to the characteristics of an ideally insurable loss exposure in selling insurance help
assure that Select one:
A. The insurer is able to charge a premium that the insured can afford to pay.
B. The insurer is able to predict the amount and timing of each future loss.
C. The losses associated with it typically involve small amounts.
D. The insurer can charge a high premium for the coverage. - ✔✔A. The insurer is able
to charge a premium that the insured can afford to pay.
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reimburse a victim for actual harm - ✔✔compensatory damages
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 - ✔✔b. Homeowners Policy (Property)
A homeowners policy is a type of
Select one:
A. Commercial insurance policy.
B. Personal umbrella policy.
C. Personal property-casualty insurance policy.
D. Life insurance policy. - ✔✔C. Personal property-casualty insurance policy.
A homeowners policy is a type of
Select one:
A. Personal umbrella policy.
B. Personal property-casualty insurance policy.
C. Commercial insurance policy.
D. Life insurance policy. - ✔✔B. Personal property-casualty insurance policy.
A liability adjuster must be concerned with specific, out-of-pocket expenses when
evaluating the damages being claimed. The technical term for such expenses is
Select one:
A. General damages.
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,B. Measurable damages.
C. Punitive damages.
D. Special damages. - ✔✔D. Special damages.
A liability adjuster must be concerned with specific, out-of-pocket expenses when
evaluating the damages being claimed. The technical term for such expenses is
Select one:
A. General damages.
B. Special damages.
C. Measurable damages.
D. Punitive damages. - ✔✔B. Special damages
A liability loss has the following damages:
Medical expenses: $10,000
Damages for disfigurement:
$50,000
Damages for pain and suffering:
$100,000 What is the amount of
general damages? Select one:
A. $ 60,000
B. $110,000
C. $150,000
D. $160,000 - ✔✔C. $150,000 (The amount of general damages is $150,000. General
damages are for losses that do not have a specific economic value.)
A person or entity that would suffer a financial loss if property were
damaged has Select one:
A. A contractual interest.
B. An insurable interest.
C. A renewable interest.
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,D. A discretionary interest. - ✔✔B. An insurable interest.
A reinsurance company
Select one:
A. Is formed to write all or part of the insurance for a parent company.
B. Transfers losses to a primary insurer.
C. Provides primary insurance for loss exposures that private insurers are unwilling to provide.
D. Assumes loss exposures from a primary insurer. - ✔✔D. Assumes loss exposures
from a primary insurer.
a self-employed hairstylist wants to make sure she's covered in case a client sues
her. Her agent suggests a policy. - ✔✔manuscript
ABC Company experienced a dramatic ideological shift in corporate policies after a national
election. This is an example of which one of the following quadrants of risk?
Select one:
A. Hazard risk
B. Strategic risk
C. Operational risk
D. Financial risk - ✔✔B. Strategic risk
ABC Company experienced a dramatic ideological shift in corporate policies after a national
election. This is an example of which one of the following quadrants of risk?
Select one:
A. Strategic risk
B. Hazard risk
C. Operational risk
D. Financial risk - ✔✔A. Strategic risk
Actual cash value (ACV) is
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, Select one:
A. Agreed value minus depreciation.
B. Replacement cost plus depreciation.
C. Replacement cost minus depreciation.
D. Replacement cost minus agreed value. - ✔✔C. Replacement cost minus depreciation.
Actual cash value (ACV)
is Select one:
A. Replacement cost plus depreciation.
B. Replacement cost minus agreed value.
C. Agreed value minus depreciation.
D. Replacement cost minus depreciation. - ✔✔D. Replacement cost minus depreciation.
Adhering to the characteristics of an ideally insurable loss exposure in selling insurance help
assure that Select one:
A. The insurer can charge a high premium for the coverage.
B. The insurer is able to charge a premium that the insured can afford to pay.
C. The insurer is able to predict the amount and timing of each future loss.
D. The losses associated with it typically involve small amounts. - ✔✔B. The insurer is able
to charge a premium that the insured can afford to pay.
Adhering to the characteristics of an ideally insurable loss exposure in selling insurance help
assure that Select one:
A. The insurer is able to charge a premium that the insured can afford to pay.
B. The insurer is able to predict the amount and timing of each future loss.
C. The losses associated with it typically involve small amounts.
D. The insurer can charge a high premium for the coverage. - ✔✔A. The insurer is able
to charge a premium that the insured can afford to pay.
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