AINS 101 FINAL EXAM QUESTIONS WITH CORRECT
ANSWERS | LATEST UPDATE 2026-2027 | GRADED
A+ | GUARANTEED PASS!!
1. As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance.
However, her friend Mehmet tells her not to skimp on insurance, because it will help
manage her cash flows. Which one of the following exam- ples best illustrates Mehmet's
point?
A. Ciara needs her car to get to her job, and she needs her 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
faced with a $1,100 repair bill.
D. Ciara finds it difficult to come up with a $787 auto insurance premium every six
months
.:Ans- When her car's windshield breaks, Ciara has to pay only $100 of the
,$600 cost of replacing it.
3. Insurance Company wrote a commercial liability policy for a manufacturer of offroad
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
4. In an effort to reduce expenses, increase profitability, and reduce human errors; ABC
Insurance Company decided to automate most of its personal lines underwriting
function.The company now uses standardized application forms that are submitted
electronically to one of the company's regional offices. At each regional office, a
computer with a scanner reads the appli- cations. The computer has been
programmed with acceptable answers to 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 reviews them.The use of
this technology has reduced the company's expense ratio by two and a half percent,
and reduced the time it takes to issue a policy. ABC Insurance Company's use of
computers to evaluate applications electronically is an application of
A. Radiant sensors.
,B. Artificial intelligence.
C. Risk management information systems.
D. Actuator technology
.:Ans- Artificial intelligence.
2. Which one of the following statements is correct regarding the benefits provided 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 benefits
individual insureds but not society as a whole.
D. Insurance helps reduce the financial burden to society by compensating accident
victims
.:Ans- Insurance helps reduce the financial burden to society by com- pensating accident
victims.
, 5. Jimmy decided to buy a house in his neighborhood that had been foreclosed on by
the bank that held the mortgage. He is hoping to do some renovation and repair work
on the house, and then sell it for a quick profit. What type of risk is this?: Speculative
Risk
6. Which one of the following best describes the concept of pooling?
A. The financial consequences of unanticipated losses are transferred to an insurer.
B. Risk management is concerned with positive and negative risks.
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole
.:Ans- Insureds share the cost of each other's losses.
7. Shelton Industries experienced a fire in its manufacturing plant. Several
employees suffered burns and smoke inhalation injuries as they tried to escape
the building. Which one of Shelton Industries' commercial property-ca- sualty
ANSWERS | LATEST UPDATE 2026-2027 | GRADED
A+ | GUARANTEED PASS!!
1. As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance.
However, her friend Mehmet tells her not to skimp on insurance, because it will help
manage her cash flows. Which one of the following exam- ples best illustrates Mehmet's
point?
A. Ciara needs her car to get to her job, and she needs her 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
faced with a $1,100 repair bill.
D. Ciara finds it difficult to come up with a $787 auto insurance premium every six
months
.:Ans- When her car's windshield breaks, Ciara has to pay only $100 of the
,$600 cost of replacing it.
3. Insurance Company wrote a commercial liability policy for a manufacturer of offroad
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
4. In an effort to reduce expenses, increase profitability, and reduce human errors; ABC
Insurance Company decided to automate most of its personal lines underwriting
function.The company now uses standardized application forms that are submitted
electronically to one of the company's regional offices. At each regional office, a
computer with a scanner reads the appli- cations. The computer has been
programmed with acceptable answers to 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 reviews them.The use of
this technology has reduced the company's expense ratio by two and a half percent,
and reduced the time it takes to issue a policy. ABC Insurance Company's use of
computers to evaluate applications electronically is an application of
A. Radiant sensors.
,B. Artificial intelligence.
C. Risk management information systems.
D. Actuator technology
.:Ans- Artificial intelligence.
2. Which one of the following statements is correct regarding the benefits provided 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 benefits
individual insureds but not society as a whole.
D. Insurance helps reduce the financial burden to society by compensating accident
victims
.:Ans- Insurance helps reduce the financial burden to society by com- pensating accident
victims.
, 5. Jimmy decided to buy a house in his neighborhood that had been foreclosed on by
the bank that held the mortgage. He is hoping to do some renovation and repair work
on the house, and then sell it for a quick profit. What type of risk is this?: Speculative
Risk
6. Which one of the following best describes the concept of pooling?
A. The financial consequences of unanticipated losses are transferred to an insurer.
B. Risk management is concerned with positive and negative risks.
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole
.:Ans- Insureds share the cost of each other's losses.
7. Shelton Industries experienced a fire in its manufacturing plant. Several
employees suffered burns and smoke inhalation injuries as they tried to escape
the building. Which one of Shelton Industries' commercial property-ca- sualty
