AINS 101 Exam Prep Complete Questions And Answers 2026
1. As a single mother on a very tight budget, Ciara is When her car's windshield
tempted to skimp on her insurance. However, her friend breaks, Ciara has to pay
Mehmet tells her not to skimp on insurance, only $100 of the $600 cost
because it will help manage her cash flows. Which one of replacing it.
of the following examples best illustrates Mehmet's point?
A. Ciara needs her car to get to her job, and she needs her
job to make car payments and pay for her car insurance.
B. When her car's windshield breaks, Ciara has to pay only
$100 of the $600 cost of replacing it.
C. When her car's transmission goes out a month after the
warranty expires, Ciara is faced with a $1,100 repair bill.
D. Ciara finds it difficult to come up with a $787 auto
insurance premium every six months.
2. Which one of the following statements is correct re- Insurance helps reduce
garding the benefits provided by insurance? the financial burden to so-
ciety by compensating ac-
A. Insurance reduces the financial consequences of loss cident victims.
exposures but not the related uncertainty.
B. The primary role of insurance is to meet mandatory
insurance requirements.
C. The reduction in losses paid by insurers due to risk control
measures benefits individual insureds but not society as a
whole.
D. Insurance helps reduce the financial burden to so- ciety
by compensating accident victims.
3.
, AINS 101 Exam Prep Complete Questions And Answers 2026
Shelton Industries experienced a fire in its manufac- Workers compensation
turing plant. Several employees suffered burns and insurance
smoke inhalation injuries as they tried to escape the
building. Which one of Shelton Industries' commercial
property-casualty policies would pay for the employ- ees'
injuries and illnesses?
4. A homeowners policy is a type of Personal property-casual-
ty insurance policy.
5. Which one of the following correctly describes a rea- Government programs
son for government involvement in property-casualty can meet legitimate pub-
insurance? lic demands unmet by pri-
vate insurers.
A. Selling insurance provides the government with a non-
tax source of revenues and profits.
B. Government programs can meet legitimate public
demands unmet by private insurers.
C. Competition from government plans keeps private
insurer's premiums competitive.
D. Preventing high-risk individuals or activities from
being insured is in the public interest.
6. Insurance Company wrote a commercial liability pol- icy Reinsurance
for a manufacturer of off-road motorcycles. The potential
costs of the insured's loss exposure exceed Insurance
Company's capacity. Insurance Company could consider
which one of the following types of contractual
transferring agreement to meet its needs?
7. In an effort to reduce expenses, increase profitability, Artificial intelligence.
and reduce human errors; ABC Insurance Company
decided to automate most of its personal lines under-
, AINS 101 Exam Prep Complete Questions And Answers 2026
writing function. The company now uses standardized
application forms that are submitted electronically to one
of the company's regional offices. At each region- al office,
a computer with a scanner reads the appli- cations. The
computer has been programmed with acceptable answers
to the questions. If the answers on the application are all
acceptable, the policy is au- tomatically issued. Rejected
applications are automat- ically forwarded to a human
underwriter who reviews them. The use of this technology
has reduced the company's expense ratio by two and a half
percent, and reduced the time it takes to issue a policy.
ABC Insurance Company's use of computers to evaluate
applications electronically is an application of
A. Radiant sensors.
B. Artificial intelligence.
C.
8. Jimmy decided to buy a house in his neighborhood that
had been foreclosed on by the bank that held the Speculative Risk
mortgage. He is hoping to do some renovation and repair
work on the house, and then sell it for a quick profit.
What type of risk is this?
9. Which one of the following best describes the concept Insureds share the cost of
of pooling? each other's losses.
A. The financial consequences of unanticipated losses are
transferred to an insurer.
B. Risk management is concerned with positive and
negative risks.
, AINS 101 Exam Prep Complete Questions And Answers 2026
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole.
10. Which one of the following represents uncertainty Risk
about outcomes that can be negative or positive?
A. Loss exposure
B. Transfer
C. Risk
D. Pooling
11. Coverage for money and other business property Commercial crime insur-
from various causes of loss such as burglary, robbery, ance.
theft, and employee dishonesty typically is provided by
12. The insurance agent suggested that Sally's Snack Commercial Package Poli-
Shop buy a policy that combines property, crime, and cy (CCP)
liability coverages into one policy. This is referred to as
a(n)
13. Which one of the following describes the characteris- tics A corporation owned by
of a mutual insurance company? policyholders that pro-
vides insurance to its poli-
A. A corporation owned by policyholders that provides cyholders.
insurance to its policyholders.
B. An unincorporated association that provides recip- rocal
coverage to subscribers.
C. An unincorporated association that earns profits for its
individual investors.
D. A corporation owned by stockholders that earns
profits for the stockholders.
1. As a single mother on a very tight budget, Ciara is When her car's windshield
tempted to skimp on her insurance. However, her friend breaks, Ciara has to pay
Mehmet tells her not to skimp on insurance, only $100 of the $600 cost
because it will help manage her cash flows. Which one of replacing it.
of the following examples best illustrates Mehmet's point?
A. Ciara needs her car to get to her job, and she needs her
job to make car payments and pay for her car insurance.
B. When her car's windshield breaks, Ciara has to pay only
$100 of the $600 cost of replacing it.
C. When her car's transmission goes out a month after the
warranty expires, Ciara is faced with a $1,100 repair bill.
D. Ciara finds it difficult to come up with a $787 auto
insurance premium every six months.
2. Which one of the following statements is correct re- Insurance helps reduce
garding the benefits provided by insurance? the financial burden to so-
ciety by compensating ac-
A. Insurance reduces the financial consequences of loss cident victims.
exposures but not the related uncertainty.
B. The primary role of insurance is to meet mandatory
insurance requirements.
C. The reduction in losses paid by insurers due to risk control
measures benefits individual insureds but not society as a
whole.
D. Insurance helps reduce the financial burden to so- ciety
by compensating accident victims.
3.
, AINS 101 Exam Prep Complete Questions And Answers 2026
Shelton Industries experienced a fire in its manufac- Workers compensation
turing plant. Several employees suffered burns and insurance
smoke inhalation injuries as they tried to escape the
building. Which one of Shelton Industries' commercial
property-casualty policies would pay for the employ- ees'
injuries and illnesses?
4. A homeowners policy is a type of Personal property-casual-
ty insurance policy.
5. Which one of the following correctly describes a rea- Government programs
son for government involvement in property-casualty can meet legitimate pub-
insurance? lic demands unmet by pri-
vate insurers.
A. Selling insurance provides the government with a non-
tax source of revenues and profits.
B. Government programs can meet legitimate public
demands unmet by private insurers.
C. Competition from government plans keeps private
insurer's premiums competitive.
D. Preventing high-risk individuals or activities from
being insured is in the public interest.
6. Insurance Company wrote a commercial liability pol- icy Reinsurance
for a manufacturer of off-road motorcycles. The potential
costs of the insured's loss exposure exceed Insurance
Company's capacity. Insurance Company could consider
which one of the following types of contractual
transferring agreement to meet its needs?
7. In an effort to reduce expenses, increase profitability, Artificial intelligence.
and reduce human errors; ABC Insurance Company
decided to automate most of its personal lines under-
, AINS 101 Exam Prep Complete Questions And Answers 2026
writing function. The company now uses standardized
application forms that are submitted electronically to one
of the company's regional offices. At each region- al office,
a computer with a scanner reads the appli- cations. The
computer has been programmed with acceptable answers
to the questions. If the answers on the application are all
acceptable, the policy is au- tomatically issued. Rejected
applications are automat- ically forwarded to a human
underwriter who reviews them. The use of this technology
has reduced the company's expense ratio by two and a half
percent, and reduced the time it takes to issue a policy.
ABC Insurance Company's use of computers to evaluate
applications electronically is an application of
A. Radiant sensors.
B. Artificial intelligence.
C.
8. Jimmy decided to buy a house in his neighborhood that
had been foreclosed on by the bank that held the Speculative Risk
mortgage. He is hoping to do some renovation and repair
work on the house, and then sell it for a quick profit.
What type of risk is this?
9. Which one of the following best describes the concept Insureds share the cost of
of pooling? each other's losses.
A. The financial consequences of unanticipated losses are
transferred to an insurer.
B. Risk management is concerned with positive and
negative risks.
, AINS 101 Exam Prep Complete Questions And Answers 2026
C. Insureds share the cost of each other's losses.
D. Insurance benefits society as a whole.
10. Which one of the following represents uncertainty Risk
about outcomes that can be negative or positive?
A. Loss exposure
B. Transfer
C. Risk
D. Pooling
11. Coverage for money and other business property Commercial crime insur-
from various causes of loss such as burglary, robbery, ance.
theft, and employee dishonesty typically is provided by
12. The insurance agent suggested that Sally's Snack Commercial Package Poli-
Shop buy a policy that combines property, crime, and cy (CCP)
liability coverages into one policy. This is referred to as
a(n)
13. Which one of the following describes the characteris- tics A corporation owned by
of a mutual insurance company? policyholders that pro-
vides insurance to its poli-
A. A corporation owned by policyholders that provides cyholders.
insurance to its policyholders.
B. An unincorporated association that provides recip- rocal
coverage to subscribers.
C. An unincorporated association that earns profits for its
individual investors.
D. A corporation owned by stockholders that earns
profits for the stockholders.
