AINS 101 UPDATED 2027 ALL ANSWERS AND
QUESTIONS SET A+
✔✔Non-transferrable - ✔✔Once an insurance policy is in effect, an insured cannot
freely transfer the policy to another party because the insurer would then be legally
bound to a contract with a party it may not wish to insure.
Most policies contain a provision that requires the insurers written permission before
transferring the policy
✔✔Manuscript Forms - ✔✔Specific policies developed by insurers when needed for
particular customers
✔✔Self-contained policies - ✔✔Policies made up of one document. Typically used
when a client needs a type of coverage common to a large number of insureds.
✔✔Modular Policies - ✔✔Policies made up of several different documents. Typically
used when a customer needs a variety of coverages that may not be common to a large
number of insureds
✔✔5 main provisions of an insurance policy - ✔✔1. Declarations
2. Definitions
3. Insuring Agreement
4. Policy Conditions
5. Policy Exclusions
✔✔Declarations (insurance policy) - ✔✔Usually the first page of an insurance policy.
They outline who or what is covered and where and when coverage applies
✔✔Definitions (insurance policy) - ✔✔Defines policy terms. Usually located at the
beginning or end or the policy. Helps people understand the policy and reduces
confusion over what the policy does and does not cover
, ✔✔Insuring agreement (insurance policy) - ✔✔States the insurer's promises to the
insured. A policy that provides more than one coverage can have more than one
insuring agreement.
✔✔Policy Conditions (insurance policy) - ✔✔An insurer does not have to fulfill its
promise to pay for covered losses if the insured doesn't adhere to the rules laid out in
the conditions section. These can include:
- Paying premiums
- Reporting losses promptly
- Cooperating with the insurer
✔✔Policy Exclusions (insurance policy) - ✔✔Exclusions state what the policy will not
cover. Insurers use exclusions for specific reasons, including:
- To eliminate coverage for uninsurable loss exposures
- To discourage the insured from intentionally causing a loss
- To reduce duplicate coverage
- To eliminate unnecessary coverage
- To eliminate coverage that need special treatment
✔✔James West is a claims rep with Hatters Insurance. As he learns how to handle a
claim from start to finish, which one of the following best describes the correct order for
him to follow during this process?
Available answer optionsSelect only one option
A
Receiving a claim from a manager, calculating a loss reserve, contacting the insured's
lawyer, verifying coverage
B
Receiving a claim from a manager, denying the claim, contacting the insured's
representative, setting a claim reserve
C
Identifying the policy, calculating a loss reserve, determining the cause of loss,
preparing a loss statement
D
Identifying the policy, issuing the claim payment, investigating the medical claim, closing
the file - ✔✔C
Identifying the policy, calculating a loss reserve, determining the cause of loss,
preparing a loss statement
✔✔When the Smiths purchased their first home, they were required to purchase a
homeowners insurance policy in order to get a mortgage. Because they did not have a
lot of extra money in their budget, they wanted to buy as little insurance coverage as
possible. The Smiths' insurance agent advised them that if they purchase an insurance
policy that adequately covers damage to their home and personal property, they only
have to budget for the insurance premium, rather than the full cost of rebuilding the
house and replacing its contents. Which one of the following key components of
insurance is the insurance agent explaining to the Smiths?
QUESTIONS SET A+
✔✔Non-transferrable - ✔✔Once an insurance policy is in effect, an insured cannot
freely transfer the policy to another party because the insurer would then be legally
bound to a contract with a party it may not wish to insure.
Most policies contain a provision that requires the insurers written permission before
transferring the policy
✔✔Manuscript Forms - ✔✔Specific policies developed by insurers when needed for
particular customers
✔✔Self-contained policies - ✔✔Policies made up of one document. Typically used
when a client needs a type of coverage common to a large number of insureds.
✔✔Modular Policies - ✔✔Policies made up of several different documents. Typically
used when a customer needs a variety of coverages that may not be common to a large
number of insureds
✔✔5 main provisions of an insurance policy - ✔✔1. Declarations
2. Definitions
3. Insuring Agreement
4. Policy Conditions
5. Policy Exclusions
✔✔Declarations (insurance policy) - ✔✔Usually the first page of an insurance policy.
They outline who or what is covered and where and when coverage applies
✔✔Definitions (insurance policy) - ✔✔Defines policy terms. Usually located at the
beginning or end or the policy. Helps people understand the policy and reduces
confusion over what the policy does and does not cover
, ✔✔Insuring agreement (insurance policy) - ✔✔States the insurer's promises to the
insured. A policy that provides more than one coverage can have more than one
insuring agreement.
✔✔Policy Conditions (insurance policy) - ✔✔An insurer does not have to fulfill its
promise to pay for covered losses if the insured doesn't adhere to the rules laid out in
the conditions section. These can include:
- Paying premiums
- Reporting losses promptly
- Cooperating with the insurer
✔✔Policy Exclusions (insurance policy) - ✔✔Exclusions state what the policy will not
cover. Insurers use exclusions for specific reasons, including:
- To eliminate coverage for uninsurable loss exposures
- To discourage the insured from intentionally causing a loss
- To reduce duplicate coverage
- To eliminate unnecessary coverage
- To eliminate coverage that need special treatment
✔✔James West is a claims rep with Hatters Insurance. As he learns how to handle a
claim from start to finish, which one of the following best describes the correct order for
him to follow during this process?
Available answer optionsSelect only one option
A
Receiving a claim from a manager, calculating a loss reserve, contacting the insured's
lawyer, verifying coverage
B
Receiving a claim from a manager, denying the claim, contacting the insured's
representative, setting a claim reserve
C
Identifying the policy, calculating a loss reserve, determining the cause of loss,
preparing a loss statement
D
Identifying the policy, issuing the claim payment, investigating the medical claim, closing
the file - ✔✔C
Identifying the policy, calculating a loss reserve, determining the cause of loss,
preparing a loss statement
✔✔When the Smiths purchased their first home, they were required to purchase a
homeowners insurance policy in order to get a mortgage. Because they did not have a
lot of extra money in their budget, they wanted to buy as little insurance coverage as
possible. The Smiths' insurance agent advised them that if they purchase an insurance
policy that adequately covers damage to their home and personal property, they only
have to budget for the insurance premium, rather than the full cost of rebuilding the
house and replacing its contents. Which one of the following key components of
insurance is the insurance agent explaining to the Smiths?
