AINS 102 QUESTIONS AND CORRECT ANSWERS

AINS 102 QUESTIONS AND CORRECT
ANSWERS



Real property (realty) - ans-
sw sw sw sw


Tangible property consisting of land, all structures permanently attached to the land,
sw sw sw sw sw sw sw sw sw sw sw sw


and whatever is growing on the land.
sw sw sw sw sw sw




Personal Property - ans-possessions such as jewelry, furniture, and boats
sw sw sw sw sw sw sw sw sw




Damage to building by vandalism - Put a fence around the building - ans-
sw sw sw sw sw sw sw sw sw sw sw sw sw


Loss Prevention sw




Home burglary - Install burglar alarm - ans-Loss reduction
sw sw sw sw sw sw sw sw




Tort Damages - ans-compensatory damages and punitive damages
sw sw sw sw sw sw sw




Negligence Tort - ans-careless neglect, often resulting in injury
sw sw sw sw sw sw sw sw




Example: Driving while intoxicated and causing an accident
sw sw sw sw sw sw sw




Intentional Tort - ans-A deliberate act that causes harm to another person
sw sw sw sw sw sw sw sw sw sw sw




Example: assault sw




Strict Liability - ans-
sw sw sw


Inherently dangerous activities or dangerously defective products that result in injury
sw sw sw sw sw sw sw sw sw sw sw


or harm
sw




Example: Owning a wild animal sw sw sw sw




At-Fault States or Tort State - ans-
sw sw sw sw sw sw


a driver who causes a car crash is responsible for compensating the other party or
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


parties for their losses
sw sw sw




No-Fault States - ans- sw sw sw


the driver's personal injury protection (PIP) coverage pays out after a car accident fo
sw sw sw sw sw sw sw sw sw sw sw sw sw


r lost wages and medical expenses, regardless of fault
sw sw sw sw sw sw sw sw

,Modified no-fault plans - ans- sw sw sw sw


These allow injured motorists to collect economic losses from their plan's PIP benefit
sw sw sw sw sw sw sw sw sw sw sw sw


s. They may then have the ability to sue at-
sw sw sw sw sw sw sw sw sw


fault drivers for any economic losses that exceed the no-
sw sw sw sw sw sw sw sw sw


fault coverage limits and for some noneconomic losses.
sw sw sw sw sw sw sw




Add-on plans - ans-These add no-
sw sw sw sw sw


fault benefits to auto insurance policies but place no restrictions on the injured perso
sw sw sw sw sw sw sw sw sw sw sw sw sw


n's right to sue a negligent party for damages.
sw sw sw sw sw sw sw sw




Choice no-fault plans - ans-
sw sw sw sw


Under these plans, insureds can choose whether to be covered on a modified no-
sw sw sw sw sw sw sw sw sw sw sw sw sw


fault basis. In most states with these plans, insureds who choose not to be covered
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


on a modified no-fault basis must purchase add-on coverages.
sw sw sw sw sw sw sw sw




Who or what regulates auto insurance rates?
sw sw sw sw sw sw




Federal regulators sw


State regulators sw


President of the United States sw sw sw sw


Private insurers' auditors - ans-State regulators -
sw sw sw sw sw sw


States regulate auto insurance rates. While states' rating laws can vary, they gener
sw sw sw sw sw sw sw sw sw sw sw sw sw


ally require insurers to use rates that are adequate to pay all claims and expenses,
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


reasonable (not excessive) for the exposure presented, and not unfairly discriminator
sw sw sw sw sw sw sw sw sw sw


y.

Open perils coverage - ans-
sw sw sw sw


a form of commercial property insurance that provides protection against nearly ever
sw sw sw sw sw sw sw sw sw sw sw


y type of loss except those specifically excluded in the policy. Open perils property i
sw sw sw sw sw sw sw sw sw sw sw sw sw sw


nsurance is different from named perils insurance, which only provides coverage for
sw sw sw sw sw sw sw sw sw sw sw sw


losses specifically listed in the policy.
sw sw sw sw sw




Named perils coverage - ans- sw sw sw sw


insures against causes of loss that are specifically listed in the policy.
sw sw sw sw sw sw sw sw sw sw sw




HO-2 Broad Form - ans-
sw sw sw sw


Provides named perils coverage for dwellings and personal property and liability cov
sw sw sw sw sw sw sw sw sw sw sw


erage.

HO-3 Special Form - ans-
sw sw sw sw


Provides open perils coverage for dwellings, named perils coverage for personal pro
sw sw sw sw sw sw sw sw sw sw sw


perty, and liability coverage.
sw sw sw




HO-4 Contents Broad Form - ans-
sw sw sw sw sw


Often called renters insurance, it's designed for tenants and other occupants of dwel
sw sw sw sw sw sw sw sw sw sw sw sw

, lings or apartments. It provides no dwelling coverage, but it covers personal property
sw sw sw sw sw sw sw sw sw sw sw sw


swon a named perils basis and provides liability coverage.
sw sw sw sw sw sw sw sw




HO-5 Comprehensive Form - ans-
sw sw sw sw


Provides the broadest coverage of all HO forms. It covers dwellings and personal pr
sw sw sw sw sw sw sw sw sw sw sw sw sw


operty on an open perils basis, and it provides liability coverage.
sw sw sw sw sw sw sw sw sw sw




HO-6 Unit-Owners Form - ans-
sw sw sw sw


Designed for owners of residential condominium units and provides limited dwelling
sw sw sw sw sw sw sw sw sw sw sw


coverage. Named perils personal property coverage is provided, as is liability covera
sw sw sw sw sw sw sw sw sw sw sw


ge.

HO-8 Modified Coverage Form - ans-
sw sw sw sw sw


Designed for older buildings with a high replacement cost compared to market value
sw sw sw sw sw sw sw sw sw sw sw sw


. Dwellings and personal property coverage is provided on a more limited named pe
sw sw sw sw sw sw sw sw sw sw sw sw sw


rils basis. Liability coverage is also provided.
sw sw sw sw sw sw




Endorsements - ans- sw sw


Many endorsements are available to modify HO policies to further enable them to m
sw sw sw sw sw sw sw sw sw sw sw sw sw


eet the specific needs of individuals and families. Endorsements can increase or dec
sw sw sw sw sw sw sw sw sw sw sw sw


rease limits, add or remove coverages, change definitions, clarify policy intent, or rec
sw sw sw sw sw sw sw sw sw sw sw sw


ognize specific characteristics that require a premium increase or decrease.
sw sw sw sw sw sw sw sw sw




Which one of the following statements regarding assets exposed to loss is true?
sw sw sw sw sw sw sw sw sw sw sw sw


A. Real property includes only tangible property.
sw sw sw sw sw sw


B. Earthquake damage to a swimming pool is an example of a personal property los
sw sw sw sw sw sw sw sw sw sw sw sw sw sw


s exposure.
sw


C. Personal property includes only tangible property.
sw sw sw sw sw sw


D. Hail damage to a motor vehicle is an example of a real property loss exposure. -
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


ans-A. Real property includes only tangible property.
sw sw sw sw sw sw sw




All of the following could lead to a liability loss for a family, EXCEPT:
sw sw sw sw sw sw sw sw sw sw sw sw sw


A. The son, who is 13 years old, throws a rock at a classmate who requires stitches
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


for an injury to his head.
sw sw sw sw sw sw


B. A guest slips on an icy sidewalk in front of the family's home and breaks his leg.
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


C. The daughter, who is 16 years old, sideswipes a neighbor's car and dents its fen
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


der while driving her own car.
sw sw sw sw sw


D. The father trips on a broom he left lying in the driveway and breaks his arm. -
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


ans-
sw


D. The father trips on a broom he left lying in the driveway and breaks his arm.
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw




Leslie is insured with a personal auto policy (PIP) with Baines Insurance. She lives i
sw sw sw sw sw sw sw sw sw sw sw sw sw sw


n a state that has a type of no-
sw sw sw sw sw sw sw sw


fault plan in which she, if injured by an auto accident that was the fault of another p
sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw sw


erson, would be compensated with no-
sw sw sw sw sw