AINS 102 Practice Questions and Correct Answers
1. All of the following are considered personal property, EXCEPT:
A. Patent
B. Revolver
C. Cherry tree
D. Antique piano Answer -C. Cherry Tree
2. The Davis family suffered extensive fire damage to its home and was tem-
porarily unable to inhabit it. The family was forced to rent a hotel room while
its home was under repair. The cost incurred to rent the hotel room is referred
to as which one of the following outcomes of loss?
A. Lost income
B. Increased expenses
C. Reduction in value of property
D. Special damages Answer -B. Increased expenses
3. Sophie was involved in an auto accident with another vehicle. The driver of the
other vehicle was seriously injured. The individual spent 10 days in the hospital,
missed 2 months of work, and continues to experience mental distress. The
other vehicle was also damaged, with repair costs of $5,000. It was determined
that Sophie was liable for the damages because she ran a red light and caused
the accident. Which one of the following damages would be considered general
damages?
A. Mental distress compensation
B. Hospital and medical bills
C. Damages to the vehicle
D. Two months of lost wages Answer -A. Mental distress compensation
General damages, also called direct or necessary damages, are often presumed when special damages are proven.
General damages can include compensation for pain and suttering, future ettect of disfigurement, loss of a limb, sight,
or hearing, as well as emotional distress.
, AINS 102 Practice Questions and Correct Answers
4. Springton Grocery was a experiencing a frequency of liability claims from
customers slipping and falling near the store entrance on rainy days. The
owners decided to purchase nonslip mats for the areas near the store entrance
and exit doors. The mats significantly reduced the frequency of slip and fall
claims. This is an example of which one of the following risk management
techniques?
A. Transfer
B. Avoidance
C. Loss prevention
D. Loss reduction Answer -C. Loss prevention
They are trying to prevent the slip/falls accidents from happening, and reduce the frequency of liability claims from this
exposure.
5. Which one of the following is considered a high-risk driver?
A. Mark was caught and convicted of driving under the influence of alcohol.
B. Martin can only qualify for the most expensive auto insurance.
C. Cyndy cannot obtain insurance from a private insurer.
D. Stacey was involved in a deadly car accident Answer -A. Mark was caught and convicted
of driving under the influence of alcohol.
6. Coverage that pays benefits, regardless of fault, for medical expense, income
loss, and other benefits, resulting from bodily injury to occupants of a covered
auto is
A. Personal injury protection coverage
B. Compulsory auto insurance law coverage
C. Financial responsibility law coverage
D. Residual market coverage Answer -A. Personal injury protection coverage
7. 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
, AINS 102 Practice Questions and Correct Answers
insurance with the broadest possible coverage?
A. HO-2 Broad Form
B. HO-3 Special Form
C. HO-5 Comprehensive Form
D. HO-8 Modified Form Answer -C. HO-5 Comprehensive Form
Covers them with dwelling and personal property insurance with the broadest possible coverage.
8. Rick and Jamie have chosen their first home and now are asking their in-
surance agent Franklin to help advise them as to appropriate and affordable
insurance coverage. Which one of the following will most accurately reflect the
best coverage choice for Rick and Jamie?
A. As Rick and Jamie are buying a residential condo, Franklin suggests the HO-3
special form as they will be needing limited dwelling coverage.
B. As Rick and Jamie will be renting an apartment for a few years, Franklin
suggests an HO-2 broad form as they will not need any dwelling coverage.
C. As Rick and Jamie are buying and remodeling an older home, Franklin
suggests an HO-8 modified coverage form to provide appropriate coverage for
a building with a comparatively high replacement cost.
D. As Rick and Jamie will be buying a mansion, Franklin suggests an HO-5
comprehensive form as it provides the highest dollar amounts of any coverage
available. Answer -C. As Rick and Jamie are buying and remodeling an older home, Franklin suggests an HO-8
modified coverage form to provide appropriate coverage for a building with a comparatively high replacement cost.
As Rick and Jamie are buying and remodeling an older home, Franklin suggests an HO-8 modified coverage form to
provide appropriate coverage for a building with a comparatively high replacement cost.
9. Which one of the following would qualify as a temporary substitute vehicle
under a personal automobile policy?
A. A van rented by an insured during a household move
B. A trailer borrowed from a neighbor to transport a horse
C. A company car used by an employee to run an errand for the employer
1. All of the following are considered personal property, EXCEPT:
A. Patent
B. Revolver
C. Cherry tree
D. Antique piano Answer -C. Cherry Tree
2. The Davis family suffered extensive fire damage to its home and was tem-
porarily unable to inhabit it. The family was forced to rent a hotel room while
its home was under repair. The cost incurred to rent the hotel room is referred
to as which one of the following outcomes of loss?
A. Lost income
B. Increased expenses
C. Reduction in value of property
D. Special damages Answer -B. Increased expenses
3. Sophie was involved in an auto accident with another vehicle. The driver of the
other vehicle was seriously injured. The individual spent 10 days in the hospital,
missed 2 months of work, and continues to experience mental distress. The
other vehicle was also damaged, with repair costs of $5,000. It was determined
that Sophie was liable for the damages because she ran a red light and caused
the accident. Which one of the following damages would be considered general
damages?
A. Mental distress compensation
B. Hospital and medical bills
C. Damages to the vehicle
D. Two months of lost wages Answer -A. Mental distress compensation
General damages, also called direct or necessary damages, are often presumed when special damages are proven.
General damages can include compensation for pain and suttering, future ettect of disfigurement, loss of a limb, sight,
or hearing, as well as emotional distress.
, AINS 102 Practice Questions and Correct Answers
4. Springton Grocery was a experiencing a frequency of liability claims from
customers slipping and falling near the store entrance on rainy days. The
owners decided to purchase nonslip mats for the areas near the store entrance
and exit doors. The mats significantly reduced the frequency of slip and fall
claims. This is an example of which one of the following risk management
techniques?
A. Transfer
B. Avoidance
C. Loss prevention
D. Loss reduction Answer -C. Loss prevention
They are trying to prevent the slip/falls accidents from happening, and reduce the frequency of liability claims from this
exposure.
5. Which one of the following is considered a high-risk driver?
A. Mark was caught and convicted of driving under the influence of alcohol.
B. Martin can only qualify for the most expensive auto insurance.
C. Cyndy cannot obtain insurance from a private insurer.
D. Stacey was involved in a deadly car accident Answer -A. Mark was caught and convicted
of driving under the influence of alcohol.
6. Coverage that pays benefits, regardless of fault, for medical expense, income
loss, and other benefits, resulting from bodily injury to occupants of a covered
auto is
A. Personal injury protection coverage
B. Compulsory auto insurance law coverage
C. Financial responsibility law coverage
D. Residual market coverage Answer -A. Personal injury protection coverage
7. 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
, AINS 102 Practice Questions and Correct Answers
insurance with the broadest possible coverage?
A. HO-2 Broad Form
B. HO-3 Special Form
C. HO-5 Comprehensive Form
D. HO-8 Modified Form Answer -C. HO-5 Comprehensive Form
Covers them with dwelling and personal property insurance with the broadest possible coverage.
8. Rick and Jamie have chosen their first home and now are asking their in-
surance agent Franklin to help advise them as to appropriate and affordable
insurance coverage. Which one of the following will most accurately reflect the
best coverage choice for Rick and Jamie?
A. As Rick and Jamie are buying a residential condo, Franklin suggests the HO-3
special form as they will be needing limited dwelling coverage.
B. As Rick and Jamie will be renting an apartment for a few years, Franklin
suggests an HO-2 broad form as they will not need any dwelling coverage.
C. As Rick and Jamie are buying and remodeling an older home, Franklin
suggests an HO-8 modified coverage form to provide appropriate coverage for
a building with a comparatively high replacement cost.
D. As Rick and Jamie will be buying a mansion, Franklin suggests an HO-5
comprehensive form as it provides the highest dollar amounts of any coverage
available. Answer -C. As Rick and Jamie are buying and remodeling an older home, Franklin suggests an HO-8
modified coverage form to provide appropriate coverage for a building with a comparatively high replacement cost.
As Rick and Jamie are buying and remodeling an older home, Franklin suggests an HO-8 modified coverage form to
provide appropriate coverage for a building with a comparatively high replacement cost.
9. Which one of the following would qualify as a temporary substitute vehicle
under a personal automobile policy?
A. A van rented by an insured during a household move
B. A trailer borrowed from a neighbor to transport a horse
C. A company car used by an employee to run an errand for the employer
