AINS 102 EVALUATION UPDATED EXAM QUESTIONS
AND ANSWERS RATED A+
✔✔Open perils coverage - ✔✔A type of policy or coverage that insures against risks of
direct physical loss except for those specifically excluded or limited by the policy.
✔✔Named perils coverage - ✔✔An insurance policy in which the covered causes of
loss are listed or "named" in the policy.
✔✔D. Underground pipes - ✔✔All of the following items are examples of personal
property, EXCEPT:
A. Sports equipment
B. Silverware
C. A fishing boat
D. Underground pipes
✔✔C. The detached garage - ✔✔John is a recent homeowner and is considering the
insurance coverages he needs for his home and contents. If damaged by a peril
covered by a homeowners policy, which one of the following would be considered part
of John's real property?
A. The desk top computer
B. The boat in the driveway
C. The detached garage
D. The hockey net and equipment
✔✔C. Intentional tort - ✔✔Paul was charged with assault and battery after he punched
and injured his neighbor Tom, who repeatedly walked his dog on Paul's property. Which
one of the following types of tort does this represent?
A. Strict liability
B. Negligence
C. Intentional tort
D. Exemplary tort
,✔✔D. Mental distress compensation - ✔✔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. Damages to the vehicle
B. Hospital and medical bills
C. Two months of lost wages
D. Mental distress compensation
✔✔B. The residual market. - ✔✔Insurers and other organizations that make insurance
available to those who are unable to obtain coverage from the standard market are
collectively called
A. A reinsurance facility.
B. The residual market.
C. The secondary market.
D. An automobile insurance plan.
✔✔C. State regulators require that rates be adequate, reasonable, and not unfairly
discriminatory. - ✔✔Which one of the following statements is true regarding automobile
insurance rating?
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.
✔✔A. Data gathered from sensors is used by insurers for personalized pricing and
claims handling. - ✔✔Which one of the following is true regarding the use of technology
in home risk management?
A. Data gathered from sensors is used by insurers for personalized pricing and claims
handling.
B. Sensors are generally regarded as useful in loss prevention, but not in loss reduction.
C. Smart devices in the home have reaffirmed the need for existing claims data to
assess risk.
D. Technology is more prevalent, abundant, and useful in homes than in automotive
environments.
✔✔D. The HO-3 is designed for owners who occupy their dwelling or choose to rent it. -
✔✔All of the following are true of the HO-3 Special Form, EXCEPT:
A. The HO-3 is typically used as a basis for understanding other HO coverage forms.
, B. The HO-3 can be modified for special needs through available endorsements.
C. The HO-3 meets the property and liability coverage needs of most families.
D. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
✔✔A. Lost income - ✔✔A family rents its vacation home to others for several months
each year. A fire caused extensive damage to the home just before the rental season
began one year, and the family was unable to collect any rent on the property until it
was repaired. This inability to collect rent is an example of which one of the following
outcomes of loss?
A. Lost income
B. Increased expenses
C. Reduction in value of property
D. Special damages
✔✔D. A detached garage - ✔✔All of the following items are examples of personal
property, EXCEPT:
A. A diamond wedding ring
B. A set of cookware
C. A fishing boat
D. A detached garage
✔✔A. Punitive damages. - ✔✔SF Poultry learned that a number of individuals had
become ill and hospitalized after eating chicken from one of its processing plants. The
company did not advise the public or its distributors of the problem, and made no effort
to recall the spoiled product. Over 50 individuals ended-up becoming ill from the spoiled
chicken. SF Poultry was found liable in court. In addition to having to pay the medical
and hospital bills for the injured individuals, damages were levied against SF Poultry to
punish the company for its reckless and deceitful actions. These damages that were
levied against SF Poultry are known as
A. Punitive damages.
B. General damages.
C. Necessary damages.
D. Special damages.
✔✔A. The father trips on a broom he left lying in the driveway and breaks his arm. -
✔✔All of the following could lead to a liability loss for a family, EXCEPT:
A. The father trips on a broom he left lying in the driveway and breaks his arm.
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 daughter, who is 16 years old, sideswipes a neighbor's car and dents its fender
while driving her own car.
D. A guest slips on an icy sidewalk in front of the family's home and breaks his leg.
✔✔C. State D, a no-fault state, has enacted auto insurance covering accident victims
on a first-party basis, usually applying to bodily injury and not to property damage. -
AND ANSWERS RATED A+
✔✔Open perils coverage - ✔✔A type of policy or coverage that insures against risks of
direct physical loss except for those specifically excluded or limited by the policy.
✔✔Named perils coverage - ✔✔An insurance policy in which the covered causes of
loss are listed or "named" in the policy.
✔✔D. Underground pipes - ✔✔All of the following items are examples of personal
property, EXCEPT:
A. Sports equipment
B. Silverware
C. A fishing boat
D. Underground pipes
✔✔C. The detached garage - ✔✔John is a recent homeowner and is considering the
insurance coverages he needs for his home and contents. If damaged by a peril
covered by a homeowners policy, which one of the following would be considered part
of John's real property?
A. The desk top computer
B. The boat in the driveway
C. The detached garage
D. The hockey net and equipment
✔✔C. Intentional tort - ✔✔Paul was charged with assault and battery after he punched
and injured his neighbor Tom, who repeatedly walked his dog on Paul's property. Which
one of the following types of tort does this represent?
A. Strict liability
B. Negligence
C. Intentional tort
D. Exemplary tort
,✔✔D. Mental distress compensation - ✔✔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. Damages to the vehicle
B. Hospital and medical bills
C. Two months of lost wages
D. Mental distress compensation
✔✔B. The residual market. - ✔✔Insurers and other organizations that make insurance
available to those who are unable to obtain coverage from the standard market are
collectively called
A. A reinsurance facility.
B. The residual market.
C. The secondary market.
D. An automobile insurance plan.
✔✔C. State regulators require that rates be adequate, reasonable, and not unfairly
discriminatory. - ✔✔Which one of the following statements is true regarding automobile
insurance rating?
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.
✔✔A. Data gathered from sensors is used by insurers for personalized pricing and
claims handling. - ✔✔Which one of the following is true regarding the use of technology
in home risk management?
A. Data gathered from sensors is used by insurers for personalized pricing and claims
handling.
B. Sensors are generally regarded as useful in loss prevention, but not in loss reduction.
C. Smart devices in the home have reaffirmed the need for existing claims data to
assess risk.
D. Technology is more prevalent, abundant, and useful in homes than in automotive
environments.
✔✔D. The HO-3 is designed for owners who occupy their dwelling or choose to rent it. -
✔✔All of the following are true of the HO-3 Special Form, EXCEPT:
A. The HO-3 is typically used as a basis for understanding other HO coverage forms.
, B. The HO-3 can be modified for special needs through available endorsements.
C. The HO-3 meets the property and liability coverage needs of most families.
D. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
✔✔A. Lost income - ✔✔A family rents its vacation home to others for several months
each year. A fire caused extensive damage to the home just before the rental season
began one year, and the family was unable to collect any rent on the property until it
was repaired. This inability to collect rent is an example of which one of the following
outcomes of loss?
A. Lost income
B. Increased expenses
C. Reduction in value of property
D. Special damages
✔✔D. A detached garage - ✔✔All of the following items are examples of personal
property, EXCEPT:
A. A diamond wedding ring
B. A set of cookware
C. A fishing boat
D. A detached garage
✔✔A. Punitive damages. - ✔✔SF Poultry learned that a number of individuals had
become ill and hospitalized after eating chicken from one of its processing plants. The
company did not advise the public or its distributors of the problem, and made no effort
to recall the spoiled product. Over 50 individuals ended-up becoming ill from the spoiled
chicken. SF Poultry was found liable in court. In addition to having to pay the medical
and hospital bills for the injured individuals, damages were levied against SF Poultry to
punish the company for its reckless and deceitful actions. These damages that were
levied against SF Poultry are known as
A. Punitive damages.
B. General damages.
C. Necessary damages.
D. Special damages.
✔✔A. The father trips on a broom he left lying in the driveway and breaks his arm. -
✔✔All of the following could lead to a liability loss for a family, EXCEPT:
A. The father trips on a broom he left lying in the driveway and breaks his arm.
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 daughter, who is 16 years old, sideswipes a neighbor's car and dents its fender
while driving her own car.
D. A guest slips on an icy sidewalk in front of the family's home and breaks his leg.
✔✔C. State D, a no-fault state, has enacted auto insurance covering accident victims
on a first-party basis, usually applying to bodily injury and not to property damage. -
