AINS PRACTICE EXAM WITH CORRECT
ANSWERS 2025
Which two of the four quadrants of risk are classified as
pure risks? Select one:
A. Hazard risks and operational risks
B. Hazard risks and strategic risks
C. Operational risks and financial risks
D.Financial risks and strategic risks ( correct answers
) A. Hazard risks and operational risks
Correct. Hazard risks and operational risks are pure risks.
Because insurance contracts impose an obligation for ethical practices and
behaviors on the parties while dealing with one another, an insurance
contract is called a
Select one:
E. Contract of indemnity.
F. Contract of adhesion.
G. Contract of utmost good faith.
H. Conditional contract. ( correct answers ) C. Contract of utmost good
faith.
Correct.Insurance contacts are considered contracts of utmost good faith
because both parties are obligated to ethical practices and behaviors while
dealing with one another.
Winston is skimming through his new personal auto policy that just
arrived. Winston discovers that every insurance policy is represented
through a collection of policy provisions. He discovers all of the following
policy provisions, EXCEPT:
Select one:
I. Conditions
J. Definitions
K. Exceptions
L. Declarations ( correct answers ) C. Exceptions
Correct. Winston finds the policy provisions of conditions, definitions, and
declarations. The other two main provisions in a policy are the insuring
agreement, and the exclusions.
Sean was driving and caused an injury to a pedestrian named Wilbur. In the
context of the resulting claim made to Sean's insurance company and
assigned to Andrea in the claims department, Sean and Wilbur and Andrea
are, respectively,
Select one:
, A. Claimant and claims representative and
insured
B. Claimant and insured and claims
representative ( correct answers ) C.
C. Insured and claimant and claims Insured
representative
Correct. In this
D.Claims scenario, Sean
representative andand Wilbur
insured and Andrea, are,
and
respectively,
claimant and insured
claimant(Sean), claimant (Wilbur), and claims
and claims
representative
representative (Andrea).
Risk control can assist the claims
department by Select one:
A. Reporting the existence of new
operations.
B. Designing product recall procedures.
C. Developing safety management
programs.
D.Providing laboratory analyses. ( correct answers )
D. Providing laboratory analyses.
Correct. Risk control can assist the claims department by providing
laboratory analyses.
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?
Select one:
E. Risk
F. Pooling
G. Transfer
H. Risk control ( correct answers ) C. Transfer
Correct. The insurance agent is explaining the concept of transferring
the financial consequences of unanticipated events to an insurer.
Because the insurance company usually determines policy wording and the
insured has little choice but to "take it or leave it," an insurance contract is a
Select one:
I. Bilateral contract.
J. Nontransferable contract.
K. Contract of indemnity.
L. Contract of adhesion. ( correct answers ) D. Contract of adhesion.
Correct. Insurance is considered a contract of adhesion because one party,
the insured, must adhere to the contract as written by the other party (the
insurer). The insurer
ANSWERS 2025
Which two of the four quadrants of risk are classified as
pure risks? Select one:
A. Hazard risks and operational risks
B. Hazard risks and strategic risks
C. Operational risks and financial risks
D.Financial risks and strategic risks ( correct answers
) A. Hazard risks and operational risks
Correct. Hazard risks and operational risks are pure risks.
Because insurance contracts impose an obligation for ethical practices and
behaviors on the parties while dealing with one another, an insurance
contract is called a
Select one:
E. Contract of indemnity.
F. Contract of adhesion.
G. Contract of utmost good faith.
H. Conditional contract. ( correct answers ) C. Contract of utmost good
faith.
Correct.Insurance contacts are considered contracts of utmost good faith
because both parties are obligated to ethical practices and behaviors while
dealing with one another.
Winston is skimming through his new personal auto policy that just
arrived. Winston discovers that every insurance policy is represented
through a collection of policy provisions. He discovers all of the following
policy provisions, EXCEPT:
Select one:
I. Conditions
J. Definitions
K. Exceptions
L. Declarations ( correct answers ) C. Exceptions
Correct. Winston finds the policy provisions of conditions, definitions, and
declarations. The other two main provisions in a policy are the insuring
agreement, and the exclusions.
Sean was driving and caused an injury to a pedestrian named Wilbur. In the
context of the resulting claim made to Sean's insurance company and
assigned to Andrea in the claims department, Sean and Wilbur and Andrea
are, respectively,
Select one:
, A. Claimant and claims representative and
insured
B. Claimant and insured and claims
representative ( correct answers ) C.
C. Insured and claimant and claims Insured
representative
Correct. In this
D.Claims scenario, Sean
representative andand Wilbur
insured and Andrea, are,
and
respectively,
claimant and insured
claimant(Sean), claimant (Wilbur), and claims
and claims
representative
representative (Andrea).
Risk control can assist the claims
department by Select one:
A. Reporting the existence of new
operations.
B. Designing product recall procedures.
C. Developing safety management
programs.
D.Providing laboratory analyses. ( correct answers )
D. Providing laboratory analyses.
Correct. Risk control can assist the claims department by providing
laboratory analyses.
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?
Select one:
E. Risk
F. Pooling
G. Transfer
H. Risk control ( correct answers ) C. Transfer
Correct. The insurance agent is explaining the concept of transferring
the financial consequences of unanticipated events to an insurer.
Because the insurance company usually determines policy wording and the
insured has little choice but to "take it or leave it," an insurance contract is a
Select one:
I. Bilateral contract.
J. Nontransferable contract.
K. Contract of indemnity.
L. Contract of adhesion. ( correct answers ) D. Contract of adhesion.
Correct. Insurance is considered a contract of adhesion because one party,
the insured, must adhere to the contract as written by the other party (the
insurer). The insurer
