AINS 102 PT 3 Questions and Correct Answers
1. Patrick's car is 12 years-old and has been driven for over 100,000 miles. He
has decided that instead of continuing to pay insurance premium for coverage
for property damage to his car, he will put the money aside to save for a new
car. Which one of the following risk management techniques is Patrick using?
Select one:
A. Diversification
B. Retention
C. Avoidance
D. Loss reduction Answer -B
2. Which one of the following statements regarding assets exposed to loss is
true?
Select one:
A. Real property includes intangible property.
B. Earthquake damage to a swimming pool is an example of a personal prop-
erty exposure.
C. Personal property includes only tangible property.
D. Lightning damage to a tree is an example of a real property loss exposure.
Answer -D
3. Which one of the following is a form of compensatory damages?
Select one:
A. Punitive damages
B. Special damages
C. Exemplary damages
D. Real damages Answer -B
4. All of the following could lead to a liability loss for a family, EXCEPT
Answer -Select one:
A. A guest slips on an icy sidewalk in front of the family's home and breaks his
leg.
B. The son, who is 13 years old, throws a rock at a classmate who requires
stitches for an injury to his head.
C. The father trips on a broom he left lying in the driveway and breaks his arm.
D. The daughter, who is 16 years old, sideswipes a neighbor's car and dents its
, AINS 102 PT 3 Questions and Correct Answers
fender while driving her own car. Answer -C
, AINS 102 PT 3 Questions and Correct Answers
5. States A, B, C, and D have addressed the problem of compensating auto acci-
dent victims differently. Which one of the following most accurately describes
the way that states are handling this issue?
Select one:
A. State B has enacted a financial responsibility law that requires auto owners
to carry auto liability insurance at least equal to certain minimum limits.
B. State A, unlike most states, has enacted a compulsory auto insurance law,
requiring motorists to provide proof they have some means to pay for auto
accident damages.
C. State D, a no-fault state, has enacted auto insurance covering accident vic-
tims on a first-party basis, usually applying to bodily injury and not to property
damage.
D. State C, a no-fault state, has enacted auto insurance covering accident
victims on a first-party basis, usually applying both to bodily injury and to
property damage. Answer -C
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.
Answer -C
7. Which one of the following is true regarding the use of technology in home
risk management?
Select one:
A. Data gathered from sensors is used by insurers for personalized pricing and
claims handling.
B. Smart devices in the home have reaffirmed the need for existing claims data
1. Patrick's car is 12 years-old and has been driven for over 100,000 miles. He
has decided that instead of continuing to pay insurance premium for coverage
for property damage to his car, he will put the money aside to save for a new
car. Which one of the following risk management techniques is Patrick using?
Select one:
A. Diversification
B. Retention
C. Avoidance
D. Loss reduction Answer -B
2. Which one of the following statements regarding assets exposed to loss is
true?
Select one:
A. Real property includes intangible property.
B. Earthquake damage to a swimming pool is an example of a personal prop-
erty exposure.
C. Personal property includes only tangible property.
D. Lightning damage to a tree is an example of a real property loss exposure.
Answer -D
3. Which one of the following is a form of compensatory damages?
Select one:
A. Punitive damages
B. Special damages
C. Exemplary damages
D. Real damages Answer -B
4. All of the following could lead to a liability loss for a family, EXCEPT
Answer -Select one:
A. A guest slips on an icy sidewalk in front of the family's home and breaks his
leg.
B. The son, who is 13 years old, throws a rock at a classmate who requires
stitches for an injury to his head.
C. The father trips on a broom he left lying in the driveway and breaks his arm.
D. The daughter, who is 16 years old, sideswipes a neighbor's car and dents its
, AINS 102 PT 3 Questions and Correct Answers
fender while driving her own car. Answer -C
, AINS 102 PT 3 Questions and Correct Answers
5. States A, B, C, and D have addressed the problem of compensating auto acci-
dent victims differently. Which one of the following most accurately describes
the way that states are handling this issue?
Select one:
A. State B has enacted a financial responsibility law that requires auto owners
to carry auto liability insurance at least equal to certain minimum limits.
B. State A, unlike most states, has enacted a compulsory auto insurance law,
requiring motorists to provide proof they have some means to pay for auto
accident damages.
C. State D, a no-fault state, has enacted auto insurance covering accident vic-
tims on a first-party basis, usually applying to bodily injury and not to property
damage.
D. State C, a no-fault state, has enacted auto insurance covering accident
victims on a first-party basis, usually applying both to bodily injury and to
property damage. Answer -C
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.
Answer -C
7. Which one of the following is true regarding the use of technology in home
risk management?
Select one:
A. Data gathered from sensors is used by insurers for personalized pricing and
claims handling.
B. Smart devices in the home have reaffirmed the need for existing claims data
