AINS 101 LATEST FINAL EXAM QUESTIONS AND ANSWERS
SURE A+
✔✔General damages - ✔✔a monetary award to compensate a victim for losses, such
as pain and suffering that does not involved specific, measurable expenses
✔✔Punitive damages - ✔✔a payment awarded by a court to punish a defendant for a
reckless, malicious or deceitful act to deter similar conduct; the award need not bear
any relation to a party's actual damages
✔✔Loss run - ✔✔a report detaining an insured's history of claims that have occurred
over a specific period, valued as of a specific date
✔✔Producer - ✔✔any of several kinds of insurance personnel who place insurance and
surety business with insurers and who represent either insurers or insureds, or both
✔✔Broker - ✔✔an independent producer who represents insurance customers
✔✔Brokerage - ✔✔compensation in the form of a flat fee or a commission that is paid
by the reinsurer to the reinsurance intermediary for services provided
✔✔Risk management - ✔✔the process of making and implementing decisions that will
minimize the adverse effects of accidental losses on an organization
✔✔Fortuitous loss - ✔✔a loss that is accidental and unexpected
✔✔Independent exposures - ✔✔group of many persons purchasing insurance
independently and not affected by the losses of others
✔✔Contract of indemnity - ✔✔a contract in which the insurer agrees, in the event of a
covered loss, to pay an amount directly related to the amount of the loss
✔✔Principle of indemnity - ✔✔the principle that insurance policies should provide a
benefit no greater than the loss suffered by an insured
✔✔Utmost good faith - ✔✔an obligation to act in complete honesty and to disclose all
relevant facts
✔✔Contract of adhesion - ✔✔any contract in which one party must either accept the
agreement as written by the other party or reject it
✔✔Conditional contract - ✔✔a contract that one or more parties must perform only
under certain conditions
, ✔✔Declarations page - ✔✔an insurance policy information page or pages providing
specific details about the insured and the subject of the insurance
✔✔Insuring agreement - ✔✔a statement in an insurance policy that the insurer will,
under described circumstances, make a loss payment or provide a service
✔✔Condition - ✔✔any provision in an insurance policy that qualifies an otherwise
enforceable promise of the insurer
✔✔Exclusion - ✔✔a policy provision that eliminates coverage for specified exposures
✔✔Risk - ✔✔uncertainty about outcomes, can be negative or positive
✔✔Transferring - ✔✔the act of transferring the financial consequences of unanticipated
events to an insurer
✔✔Pooling - ✔✔all insureds share the costs of each other's losses
✔✔The Benefits of Insurance - ✔✔1) Paying for losses
2) Managing cash flow uncertainty
3) Meeting legal requirements
4) Promoting risk control
5) Enabling efficient use of resources
6) Providing support for insured's credit
7) Providing source of investment funds
8) Reducing social burdens
✔✔Liability insurance - ✔✔provides payments for injury to others or damage to other's
property for which the insured is legally responsible. It also covers the cost to defend
the insured against related lawsuits
✔✔Property insurance - ✔✔protects an insured's assets by covering the cost of
repairing or replacing property that is damaged, lost or destroyed. It can also cover
related lost income or extra expenses
✔✔Homeowners - ✔✔provides protection when people's homes and/or belongings are
damaged or stolen and liability coverage for situations such as the family dog biting a
guest
✔✔Personal auto - ✔✔provides coverage for bodily injury to another person or damage
to another person's auto. Also provides coverage for damage to the insured auto.
Typically legally required.
SURE A+
✔✔General damages - ✔✔a monetary award to compensate a victim for losses, such
as pain and suffering that does not involved specific, measurable expenses
✔✔Punitive damages - ✔✔a payment awarded by a court to punish a defendant for a
reckless, malicious or deceitful act to deter similar conduct; the award need not bear
any relation to a party's actual damages
✔✔Loss run - ✔✔a report detaining an insured's history of claims that have occurred
over a specific period, valued as of a specific date
✔✔Producer - ✔✔any of several kinds of insurance personnel who place insurance and
surety business with insurers and who represent either insurers or insureds, or both
✔✔Broker - ✔✔an independent producer who represents insurance customers
✔✔Brokerage - ✔✔compensation in the form of a flat fee or a commission that is paid
by the reinsurer to the reinsurance intermediary for services provided
✔✔Risk management - ✔✔the process of making and implementing decisions that will
minimize the adverse effects of accidental losses on an organization
✔✔Fortuitous loss - ✔✔a loss that is accidental and unexpected
✔✔Independent exposures - ✔✔group of many persons purchasing insurance
independently and not affected by the losses of others
✔✔Contract of indemnity - ✔✔a contract in which the insurer agrees, in the event of a
covered loss, to pay an amount directly related to the amount of the loss
✔✔Principle of indemnity - ✔✔the principle that insurance policies should provide a
benefit no greater than the loss suffered by an insured
✔✔Utmost good faith - ✔✔an obligation to act in complete honesty and to disclose all
relevant facts
✔✔Contract of adhesion - ✔✔any contract in which one party must either accept the
agreement as written by the other party or reject it
✔✔Conditional contract - ✔✔a contract that one or more parties must perform only
under certain conditions
, ✔✔Declarations page - ✔✔an insurance policy information page or pages providing
specific details about the insured and the subject of the insurance
✔✔Insuring agreement - ✔✔a statement in an insurance policy that the insurer will,
under described circumstances, make a loss payment or provide a service
✔✔Condition - ✔✔any provision in an insurance policy that qualifies an otherwise
enforceable promise of the insurer
✔✔Exclusion - ✔✔a policy provision that eliminates coverage for specified exposures
✔✔Risk - ✔✔uncertainty about outcomes, can be negative or positive
✔✔Transferring - ✔✔the act of transferring the financial consequences of unanticipated
events to an insurer
✔✔Pooling - ✔✔all insureds share the costs of each other's losses
✔✔The Benefits of Insurance - ✔✔1) Paying for losses
2) Managing cash flow uncertainty
3) Meeting legal requirements
4) Promoting risk control
5) Enabling efficient use of resources
6) Providing support for insured's credit
7) Providing source of investment funds
8) Reducing social burdens
✔✔Liability insurance - ✔✔provides payments for injury to others or damage to other's
property for which the insured is legally responsible. It also covers the cost to defend
the insured against related lawsuits
✔✔Property insurance - ✔✔protects an insured's assets by covering the cost of
repairing or replacing property that is damaged, lost or destroyed. It can also cover
related lost income or extra expenses
✔✔Homeowners - ✔✔provides protection when people's homes and/or belongings are
damaged or stolen and liability coverage for situations such as the family dog biting a
guest
✔✔Personal auto - ✔✔provides coverage for bodily injury to another person or damage
to another person's auto. Also provides coverage for damage to the insured auto.
Typically legally required.
