AINS 102 Test Questions with Correct Answers
1.John is a recent homeowner and is considering the insurance coverages
he needs for his home and contents. If damaged by a peril covered by a
homeowners policy, which one of the following would be considered part
of John's real property?
Select one:
A. The boat in the driveway
B. The detached garage
C. The desk top computer
D. The hockey net and equipment: B. The detached garage
2.Which one of the following is considered real
property? Select one:
A. An automobile
B. A house
C. Furniture
D. A motorhome: B. A house
3.All of the following could lead to a liability loss for a family,
EXCEPT: Select one:
A.The father trips on a broom he left lying in the driveway and breaks his arm
B. The son, who is 13 years old, throws a rock at a classmate who
requires stitches for an injury to his head.
C. A guest slips on an icy sidewalk in front of the family's home and
breaks his leg.
D. The daughter, who is 16 years old, sideswipes a neighbor's car and dents
its fender while driving her own car.: A. The father trips on a broom he
left lying in the driveway and breaks his arm.
4.Which one of the following is a form of compensatory
damages? Select one:
A. Real damages
B. Special damages
C. Punitive damages
D. Exemplary damages: B. Special damages
5.Which one of the following is used by the majority of states to
compensate auto accident victims?
Select one:
A. Personal injury protection coverage
B. Tort liability system
C. Uninsured motorist coverage
D. Unsatisfied judgment funds: B. Tort liability system
,6.Which one of the following statements is true regarding automobile
insur- ance rating?
Select one:
A. State regulators require that all insurers offer discounts on auto rates
for passive restraints.
B. Most insurers base automobile rates on primary rating factors and do
not consider any other factors in establishing rates.
C. State regulators require that rates be adequate, reasonable, and not
unfairly discriminatory.
D. Drivers with lower-than-average loss exposure are charged higher rates.-
: C. State regulators require that rates be adequate, reasonable, and not
unfairly discriminatory.
7.All of the following are true of the HO-3 Special Form,
EXCEPT: Select one:
A. The HO-3 is designed for owners who occupy their dwelling or choose
to rent it.
B. The HO-3 meets the property and liability coverage needs of most families
C. The HO-3 is typically used as a basis for understanding other HO
coverage forms.
D. The HO-3 can be modified for special needs through available endorse-
ments.: A. The HO-3 is designed for owners who occupy their dwelling
or choose to rent it.
8.Estelle and Richie are very conservative and want to purchase insurance
to "cover everything" in order to lessen the worries of home ownership.
Which one of the following ISO forms will provide them dwelling and
personal property insurance with the broadest possible coverage?
Select one:
A. HO-2 Broad Form
B. HO-3 Special Form
C. HO-5 Comprehensive Form
D. HO-8 Modified Form: C. HO-5 Comprehensive Form
9.The Agreement and Definitions page of the Personal Auto Policy
(PAP) includes
Select one:
A. The name of the insurer issuing the policy.
B. A general agreement stating the insurer's duty to pay damages and
defense costs subject to the terms of the policy.
C. A general agreement stating that the insurer is providing the
coverage subject to payment of premium and to the terms of the policy.
,D.The name and mailing address of the insured.: C. A general agreement
stating that the insurer is providing the coverage subject to payment of
premium and to the terms of the policy.
10.In the Personal Auto Policy (PAP) definitions, "Your covered auto"
includes all of the following classes of vehicles, EXCEPT:
Select one:
A. A trailer owned by the insured
B. A temporary substitute auto or trailer
C. A newly acquired auto
D. A trailer rented by the insured: D. A trailer rented by the insured
11.Brendan and Sue were on a road trip along the coast of California, using
Sue's car. One day they were stuck in terrible traffic while Brendan was
driving. He became angry when another car merged in front of him. A few
minutes later, Brendan deliberately rammed into the car that had cut in front
of him, causing property damage to the other car. Both Brendan and Sure
were surprised to learn that Sue's Personal Auto Policy (PAP) would not
cover the claim. Which one of the following is the correct reason why Sue's
PAP will not pay the claim for property damage to the other car?
Select one:
A. Because the Part A insuring agreement excludes intentional harm.
B. Because Sue's PAP only covers property damage to her car.
C. Because Brendan, not Sue, was driving the car.
D. Because Brendan's PAP should cover the claim.: A. Because the
Part A insuring agreement excludes intentional harm.
12.Miguel, an insured has a Personal Auto Policy (PAP) that includes
medical payments coverage. The insured crashed his car while trying to be
the first car to pull away from a stop at a red light when the light turned
green. In this scenario, Miguel
Select one:
A. Would be eligible for medical payments under the Personal Auto
Policy (PAP) because he wasn't caught speeding at the scene.
B. Would not be eligible for medical payments under the Personal Auto
Policy (PAP) if he was found at fault because of this accident.
C. Would be eligible for medical payments under the Personal Auto
Policy (PAP) as the named insured and an occupant of a covered auto.
D. Would not be eligible for medical payments under the Personal Auto
Policy (PAP) because he is being reckless.: C. Would be eligible for
medical payments under the Personal Auto Policy (PAP) as the named
insured and an occupant of a covered auto.
, 13.The Part B—Medical Payments Coverage of the Personal Auto Policy
(PAP) contains an Other Insurance provision. If two automobile policies
from different insurers cover the same owned vehicle,
Select one:
A. The first insurer to receive notice of the claim becomes primarily liable.
B. The courts will decide how to assess the payment amounts.
C.The insurer issuing the policy with the higher limits of liability will make
the determination.
D. The Other Insurance provision will address how to address the particular
situation.: D. The Other Insurance provision will address how to address
the partic- ular situation.
14.Under the uninsured motorists (UM) coverage in the Personal Auto
Policy (PAP), the insurer agrees to pay damages that the insured is legally
entitled to recover from the owner or operator of an uninsured motor
vehicle. These damages are best identified as which one of the following?
Select one:
A. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages: D. Compensatory damages
15.Under the uninsured motorists (UM) coverage in the Personal Auto
Policy (PAP), the insurer agrees to pay damages that the insured is legally
entitled to recover from the owner or operator of an uninsured motor
vehicle. These damages are best identified as which one of the following?
Select one:
A. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages: B. Denied because coverage under these
circum- stances is excluded.
16.Which one of the following causes of loss is covered under the other
than collision (OTC) section of the Personal Auto Policy (PAP)?
Select one:
A. Hitting another car
B. Overturn from the driver losing control
C. Falling objects
D. Hitting a tree: C. Falling objects
17.The Personal Auto Policy (PAP) provides physical damage coverage
for a covered auto that is damaged when the car's driver loses control and
1.John is a recent homeowner and is considering the insurance coverages
he needs for his home and contents. If damaged by a peril covered by a
homeowners policy, which one of the following would be considered part
of John's real property?
Select one:
A. The boat in the driveway
B. The detached garage
C. The desk top computer
D. The hockey net and equipment: B. The detached garage
2.Which one of the following is considered real
property? Select one:
A. An automobile
B. A house
C. Furniture
D. A motorhome: B. A house
3.All of the following could lead to a liability loss for a family,
EXCEPT: Select one:
A.The father trips on a broom he left lying in the driveway and breaks his arm
B. The son, who is 13 years old, throws a rock at a classmate who
requires stitches for an injury to his head.
C. A guest slips on an icy sidewalk in front of the family's home and
breaks his leg.
D. The daughter, who is 16 years old, sideswipes a neighbor's car and dents
its fender while driving her own car.: A. The father trips on a broom he
left lying in the driveway and breaks his arm.
4.Which one of the following is a form of compensatory
damages? Select one:
A. Real damages
B. Special damages
C. Punitive damages
D. Exemplary damages: B. Special damages
5.Which one of the following is used by the majority of states to
compensate auto accident victims?
Select one:
A. Personal injury protection coverage
B. Tort liability system
C. Uninsured motorist coverage
D. Unsatisfied judgment funds: B. Tort liability system
,6.Which one of the following statements is true regarding automobile
insur- ance rating?
Select one:
A. State regulators require that all insurers offer discounts on auto rates
for passive restraints.
B. Most insurers base automobile rates on primary rating factors and do
not consider any other factors in establishing rates.
C. State regulators require that rates be adequate, reasonable, and not
unfairly discriminatory.
D. Drivers with lower-than-average loss exposure are charged higher rates.-
: C. State regulators require that rates be adequate, reasonable, and not
unfairly discriminatory.
7.All of the following are true of the HO-3 Special Form,
EXCEPT: Select one:
A. The HO-3 is designed for owners who occupy their dwelling or choose
to rent it.
B. The HO-3 meets the property and liability coverage needs of most families
C. The HO-3 is typically used as a basis for understanding other HO
coverage forms.
D. The HO-3 can be modified for special needs through available endorse-
ments.: A. The HO-3 is designed for owners who occupy their dwelling
or choose to rent it.
8.Estelle and Richie are very conservative and want to purchase insurance
to "cover everything" in order to lessen the worries of home ownership.
Which one of the following ISO forms will provide them dwelling and
personal property insurance with the broadest possible coverage?
Select one:
A. HO-2 Broad Form
B. HO-3 Special Form
C. HO-5 Comprehensive Form
D. HO-8 Modified Form: C. HO-5 Comprehensive Form
9.The Agreement and Definitions page of the Personal Auto Policy
(PAP) includes
Select one:
A. The name of the insurer issuing the policy.
B. A general agreement stating the insurer's duty to pay damages and
defense costs subject to the terms of the policy.
C. A general agreement stating that the insurer is providing the
coverage subject to payment of premium and to the terms of the policy.
,D.The name and mailing address of the insured.: C. A general agreement
stating that the insurer is providing the coverage subject to payment of
premium and to the terms of the policy.
10.In the Personal Auto Policy (PAP) definitions, "Your covered auto"
includes all of the following classes of vehicles, EXCEPT:
Select one:
A. A trailer owned by the insured
B. A temporary substitute auto or trailer
C. A newly acquired auto
D. A trailer rented by the insured: D. A trailer rented by the insured
11.Brendan and Sue were on a road trip along the coast of California, using
Sue's car. One day they were stuck in terrible traffic while Brendan was
driving. He became angry when another car merged in front of him. A few
minutes later, Brendan deliberately rammed into the car that had cut in front
of him, causing property damage to the other car. Both Brendan and Sure
were surprised to learn that Sue's Personal Auto Policy (PAP) would not
cover the claim. Which one of the following is the correct reason why Sue's
PAP will not pay the claim for property damage to the other car?
Select one:
A. Because the Part A insuring agreement excludes intentional harm.
B. Because Sue's PAP only covers property damage to her car.
C. Because Brendan, not Sue, was driving the car.
D. Because Brendan's PAP should cover the claim.: A. Because the
Part A insuring agreement excludes intentional harm.
12.Miguel, an insured has a Personal Auto Policy (PAP) that includes
medical payments coverage. The insured crashed his car while trying to be
the first car to pull away from a stop at a red light when the light turned
green. In this scenario, Miguel
Select one:
A. Would be eligible for medical payments under the Personal Auto
Policy (PAP) because he wasn't caught speeding at the scene.
B. Would not be eligible for medical payments under the Personal Auto
Policy (PAP) if he was found at fault because of this accident.
C. Would be eligible for medical payments under the Personal Auto
Policy (PAP) as the named insured and an occupant of a covered auto.
D. Would not be eligible for medical payments under the Personal Auto
Policy (PAP) because he is being reckless.: C. Would be eligible for
medical payments under the Personal Auto Policy (PAP) as the named
insured and an occupant of a covered auto.
, 13.The Part B—Medical Payments Coverage of the Personal Auto Policy
(PAP) contains an Other Insurance provision. If two automobile policies
from different insurers cover the same owned vehicle,
Select one:
A. The first insurer to receive notice of the claim becomes primarily liable.
B. The courts will decide how to assess the payment amounts.
C.The insurer issuing the policy with the higher limits of liability will make
the determination.
D. The Other Insurance provision will address how to address the particular
situation.: D. The Other Insurance provision will address how to address
the partic- ular situation.
14.Under the uninsured motorists (UM) coverage in the Personal Auto
Policy (PAP), the insurer agrees to pay damages that the insured is legally
entitled to recover from the owner or operator of an uninsured motor
vehicle. These damages are best identified as which one of the following?
Select one:
A. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages: D. Compensatory damages
15.Under the uninsured motorists (UM) coverage in the Personal Auto
Policy (PAP), the insurer agrees to pay damages that the insured is legally
entitled to recover from the owner or operator of an uninsured motor
vehicle. These damages are best identified as which one of the following?
Select one:
A. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages: B. Denied because coverage under these
circum- stances is excluded.
16.Which one of the following causes of loss is covered under the other
than collision (OTC) section of the Personal Auto Policy (PAP)?
Select one:
A. Hitting another car
B. Overturn from the driver losing control
C. Falling objects
D. Hitting a tree: C. Falling objects
17.The Personal Auto Policy (PAP) provides physical damage coverage
for a covered auto that is damaged when the car's driver loses control and
