AINS 101 Exam Prep with All Expected Questions and
100% Correct Answers Graded A+
1. As a single mother on a ṿery tight budget, Ciara is tempted to skimp on her
insurance.Howeṿer, her friend Mehmettells her not to skimp on insurance,
because it will help manage her cash flows. Which one of the following exam -
ples bestillustratesMehmet'spoint?
A. Ciara needsher car to get to her job, and she needsher job to make car
payments and pay for her car insurance.
B. When her car's windshield breaks, Ciara has to pay only $100 of the $600
cost of replacing it.
C. When her car's transmission goes out a month after the warranty expires,
Ciara is facedwith a $1,100repair bill.
D. Ciara finds it difficult to come up with a $787 auto insurance premium
eṿery six months.: Whenher car's windshieldbreaks,Ciara has to pay only $100of the $600 cost of
replacingit.
2. Whichoneof thefollowingstatementsis correctregardingthebenefits
proṿided by insurance?
A. Insurance reduces the financial consequences of loss exposures but not the
related uncertainty.
B. The primary role of insurance is to meet mandatory insurance
require -ments.
C. The reduction in losses paid by insurers due to risk control measures
benefitsindiṿidual insuredsbut not societyas a whole.
D. Insurance helps reduce the financial burden to society by compensating
accidentṿictims.: Insurancehelps reducethe financial burdento societyby compensatingaccidentṿictims.
3. SheltonIndustriesexperienceda fire in its manufacturingplant. Seṿeral em-
ployees suffered burns and smoke inhalation injuries as they tried to escape
,the building. Which one of Shelton Industries' commercial property -casualty
policies would pay for the employees' injuries and illnesses?: Workers compensation
insurance
4. A homeownerspolicy is a type of: Personalproperty-casualtyinsurancepolicy.
5. Which one of the following correctly describes a reason for goṿernment
inṿolṿementin property-casualtyinsurance?
,A. Selling insurance pro ṿides the goṿernment with a non-tax source of reṿ-
enues and profits.
B. Goṿernment programs can meet legitimate public demands unmet by
priṿate insurers.
C. Competition from goṿernment plans keeps pri ṿate insurer's premiums
competitiṿe.
D. Preṿenting high -risk indi ṿiduals or acti ṿities from being insured is in the
ṿate
public interest.: Goṿernment programs can meet legitimate public demands unmet by priinsurers.
6. Insurance Company wrote a commercial liability policy for a manufacturer
of off-road motorcycles. The potential costs of the insured's loss exposure
exceed Insurance Company's capacity. Insurance Company could consider
which one of the following types of contractual transferring agreement to
meet its needs?: Reinsurance
7. In an effortto reduceexpenses,increaseprofitability,and reducehuman
errors; ABC Insurance Company decided to automate most of its personal lines
underwriting function. The company now uses standardized application forms
that are submittedelectronicallyto oneof the company'sregional offices.
At eachregionaloffice,a computerwith a scannerreadstheappli-cations.
The computerhas beenprogrammedwith acceptableanswersto the
questions. If the answers on the application are all acceptable, the policy is
automatically issued. Rejected applications are automatically forwarded
to a human underwriter who re ṿiews them. The use of this technology has
reducedthe company'sexpenseratio by two and a half percent,and reduced
thetimeit takesto issue a policy.ABC InsuranceCompany'suse of computers to
eṿaluate applications electronically is an application of
A. Radiantsensors.
B. Artificial intelligence.
C. Risk management information systems.
, D. Actuatortechnology.:Artificial intelligence.
100% Correct Answers Graded A+
1. As a single mother on a ṿery tight budget, Ciara is tempted to skimp on her
insurance.Howeṿer, her friend Mehmettells her not to skimp on insurance,
because it will help manage her cash flows. Which one of the following exam -
ples bestillustratesMehmet'spoint?
A. Ciara needsher car to get to her job, and she needsher job to make car
payments and pay for her car insurance.
B. When her car's windshield breaks, Ciara has to pay only $100 of the $600
cost of replacing it.
C. When her car's transmission goes out a month after the warranty expires,
Ciara is facedwith a $1,100repair bill.
D. Ciara finds it difficult to come up with a $787 auto insurance premium
eṿery six months.: Whenher car's windshieldbreaks,Ciara has to pay only $100of the $600 cost of
replacingit.
2. Whichoneof thefollowingstatementsis correctregardingthebenefits
proṿided by insurance?
A. Insurance reduces the financial consequences of loss exposures but not the
related uncertainty.
B. The primary role of insurance is to meet mandatory insurance
require -ments.
C. The reduction in losses paid by insurers due to risk control measures
benefitsindiṿidual insuredsbut not societyas a whole.
D. Insurance helps reduce the financial burden to society by compensating
accidentṿictims.: Insurancehelps reducethe financial burdento societyby compensatingaccidentṿictims.
3. SheltonIndustriesexperienceda fire in its manufacturingplant. Seṿeral em-
ployees suffered burns and smoke inhalation injuries as they tried to escape
,the building. Which one of Shelton Industries' commercial property -casualty
policies would pay for the employees' injuries and illnesses?: Workers compensation
insurance
4. A homeownerspolicy is a type of: Personalproperty-casualtyinsurancepolicy.
5. Which one of the following correctly describes a reason for goṿernment
inṿolṿementin property-casualtyinsurance?
,A. Selling insurance pro ṿides the goṿernment with a non-tax source of reṿ-
enues and profits.
B. Goṿernment programs can meet legitimate public demands unmet by
priṿate insurers.
C. Competition from goṿernment plans keeps pri ṿate insurer's premiums
competitiṿe.
D. Preṿenting high -risk indi ṿiduals or acti ṿities from being insured is in the
ṿate
public interest.: Goṿernment programs can meet legitimate public demands unmet by priinsurers.
6. Insurance Company wrote a commercial liability policy for a manufacturer
of off-road motorcycles. The potential costs of the insured's loss exposure
exceed Insurance Company's capacity. Insurance Company could consider
which one of the following types of contractual transferring agreement to
meet its needs?: Reinsurance
7. In an effortto reduceexpenses,increaseprofitability,and reducehuman
errors; ABC Insurance Company decided to automate most of its personal lines
underwriting function. The company now uses standardized application forms
that are submittedelectronicallyto oneof the company'sregional offices.
At eachregionaloffice,a computerwith a scannerreadstheappli-cations.
The computerhas beenprogrammedwith acceptableanswersto the
questions. If the answers on the application are all acceptable, the policy is
automatically issued. Rejected applications are automatically forwarded
to a human underwriter who re ṿiews them. The use of this technology has
reducedthe company'sexpenseratio by two and a half percent,and reduced
thetimeit takesto issue a policy.ABC InsuranceCompany'suse of computers to
eṿaluate applications electronically is an application of
A. Radiantsensors.
B. Artificial intelligence.
C. Risk management information systems.
, D. Actuatortechnology.:Artificial intelligence.
