K
C
LO
AINS 101 EXAM PREP
YC
QUESTIONS WITH CORRECT
ANSWERS ALL VERIFIED BY
D
AN EXPERT A+ GRADED
U
(LATEST UPDATE)
ST
, Which one of the following best describes the concept of pooling? - ANS The concept of
pooling is that insureds share the cost of each other's losses
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 examples best illustrates Mehmet's point? - ANS When her
car's windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing it
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
K
Industries' commercial property-casualty policies would pay for the employees' injuries and
illnesses? - ANS Workers compensation insurance
C
Coverage for money and other business property from various causes of loss such as burglary,
robbery, theft, and employee dishonesty typically is provided by - ANS Commercial crime
insurance
funds
LO
All of the following are types of private insurers, EXCEPT: - ANS State workers compensation
The state of Maryland operates a residual auto plan (the Maryland Auto Insurance Fund—MAIF)
YC
that provides coverage for drivers who are unable to obtain coverage from private insurers.
Which one of the following is the best rationale for the MAIF program? - ANS Auto insurance is
compulsory, and the program makes it possible for all drivers to have reasonably priced
insurance
ABC Company experienced a dramatic ideological shift in corporate policies after a national
D
election. This is an example of which one of the following quadrants of risk? - ANS Strategic
risk
U
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. Which one of the following types of risk is this for Jimmy? - ANS
ST
Speculative risk
Carlos is new to the insurance business and is learning about insurance regulation and what he,
now working with Grady Insurance, will need to be aware of regarding the subject of
compliance. Which one of the following will Carlos find is accurate as he better understands why
insurance is regulated? - ANS Insurance regulation protects customers by guaranteeing
insurance is available and accessible to everyone who needs it.
What term refers to the ability of an insurer to meet its obligations as they become due? - ANS
Solvency
C
LO
AINS 101 EXAM PREP
YC
QUESTIONS WITH CORRECT
ANSWERS ALL VERIFIED BY
D
AN EXPERT A+ GRADED
U
(LATEST UPDATE)
ST
, Which one of the following best describes the concept of pooling? - ANS The concept of
pooling is that insureds share the cost of each other's losses
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 examples best illustrates Mehmet's point? - ANS When her
car's windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing it
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
K
Industries' commercial property-casualty policies would pay for the employees' injuries and
illnesses? - ANS Workers compensation insurance
C
Coverage for money and other business property from various causes of loss such as burglary,
robbery, theft, and employee dishonesty typically is provided by - ANS Commercial crime
insurance
funds
LO
All of the following are types of private insurers, EXCEPT: - ANS State workers compensation
The state of Maryland operates a residual auto plan (the Maryland Auto Insurance Fund—MAIF)
YC
that provides coverage for drivers who are unable to obtain coverage from private insurers.
Which one of the following is the best rationale for the MAIF program? - ANS Auto insurance is
compulsory, and the program makes it possible for all drivers to have reasonably priced
insurance
ABC Company experienced a dramatic ideological shift in corporate policies after a national
D
election. This is an example of which one of the following quadrants of risk? - ANS Strategic
risk
U
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. Which one of the following types of risk is this for Jimmy? - ANS
ST
Speculative risk
Carlos is new to the insurance business and is learning about insurance regulation and what he,
now working with Grady Insurance, will need to be aware of regarding the subject of
compliance. Which one of the following will Carlos find is accurate as he better understands why
insurance is regulated? - ANS Insurance regulation protects customers by guaranteeing
insurance is available and accessible to everyone who needs it.
What term refers to the ability of an insurer to meet its obligations as they become due? - ANS
Solvency
