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AINS 102 Questions With Correct Answers 2023- 2024
All of the following items are examples of personal property, EXCEPT:
Select one:
A. Sports equipment
B. Silverware
C. A fishing boat
D. Underground pipes - ANS-Underground pipes
Which one of the following statements regarding assets exposed to loss is true?
Select one:
A. Real property includes only tangible property.Correct. All real property is tangible property having a physical form that can be seen or touched. Personal property can include intangible property such as patents or copyrights.
B. Earthquake damage to a swimming pool is an example of a personal property loss exposure.
C. Personal property includes only tangible property.
D. Hail damage to a motor vehicle is an example of a real property loss exposure. - ANS-A. Real property includes only tangible property.
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?
Select one:
A. Damages to the vehicle
B. Hospital and medical bills
C. Two months of lost wages
D. Mental distress compensation - ANS-D. Mental distress compensation
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
Select one:
A. General damages.
B. Punitive damages.
C. Special damages.
D. Necessary damages. - ANS-B. Punitive damages.
Which one of the following statements is true regarding automobile insurance 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. - ANS-C. State regulators require that rates be adequate, reasonable, and not unfairly discriminatory.
nsurers and other organizations that make insurance available to those who are unable to obtain coverage from the standard market are collectively called
Select one:
A. A reinsurance facility.
B. The residual market.
C. The secondary market.
A. Temporary substitute vehicle.
B. Newly acquired auto.
C. Replacement auto.
D. Trailer. - ANS-B. Newly acquired auto.
Phil, a claim representative, was assigned a claim for an auto theft. He needs to determine the applicable Other Than Collision deductible for the auto. Which one of the following sections of the Personal Auto Policy will provide Phil with this information?
Select one:
A. Part E—Insured Duties Following an Accident or Loss
B. Endorsements section of the Declarations page
C. Part D—Damage to Your Auto Coverage
D. Schedule of Coverages section of the Declarations page - ANS-D. Schedule of Coverages section of the Declarations page
Joel is a delivery driver for XYZ Auto Supply. He usually drives the company van, but one day, since he only had to deliver a small part, Joel used his own car that is insured with a Personal Auto Policy (PAP). While doing so, Joel was involved in a two-vehicle accident and a liability claim was made against Joel and XYZ Auto Supply. Which one of the following is an insured(s) under Joel's PAP in this situation?
Select one:
A. Joel only
B. None
C. Joel and XYZ Auto Supply
D. XYZ Auto Supply only - ANS-C. Joel and XYZ Auto Supply
The medical payments coverage in the Personal Auto Policy (PAP) applies to
Select one:
A. Any person occupying a covered auto.
B. Any insured who is also covered by workers compensation for the same accident.
C. Anyone occupying a car not owned by any insured but driven by an insured.
D. Anyone injured in an accident involving an insured. - ANS-A. Any person occupying a covered auto.
The Part B—Medical Payments Coverage of the Personal Auto Policy (PAP) contains an Other Insurance provision. If two automobile policies from different insurers cover the same owned vehicle,
Select one:
A. The insurer issuing the policy with the higher limits of liability will make the determination.
B. The Other Insurance provision will address how to address the particular situation.
C. The courts will decide how to assess the payment amounts.
D. The first insurer to receive notice of the claim becomes primarily liable. - ANS-B. The Other Insurance provision will address how to address the particular situation.
Uninsured motorist (UM) coverage under the Personal Auto Policy (PAP) does not apply to a claim that the insured settles without the insurer's consent if such a settlement prejudices the insurer's right to recover payment. In this context, "prejudice" means
Select one:
A. To create rights where none existed before.
B. To form opinions before hearing all of the facts.
C. To injure or damage another party's rights.
D. To put the insurer's interests ahead of the insured's interests. - ANS-C. To injure or damage another party's rights.
Under the uninsured motorists (UM) coverage in the Personal Auto Policy (PAP), the insurer agrees to pay damages that the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle. These damages are best identified as which one of the following?
Select one:
A. Medical expenses
C. Endorsements that provide coverage additions/modifications for customers who own vehicles other than cars, vans, or pickup trucks.
D. Endorsements that provide higher coverage limits for navigation systems permanently installed in the vehicles and various media owned by the named insured. - ANS-C. Endorsements that provide coverage additions/modifications for customers who own vehicles other than cars, vans, or pickup trucks.
The Millers insure their dwelling under an HO-3 policy. They recently purchased a shed for their back yard where they will store tools, bicycles, and other sporting equipment. Which one of the following property coverages under Section I of the HO-3 policy would apply to the shed?
Select one:
A. Coverage A—Dwelling
B. Coverage B—Other Structures
C. Coverage C—Personal Property
D. Additional Coverage - ANS-B. Coverage B—Other Structures
The insuring agreement of a homeowners policy specifies that
Select one:
A. Five property coverages are provided by the policy.
B. Defined words have special meanings when they are used within the policy.
C. The insurer will provide policy coverage in return for the premium and compliance with policy provisions.
D. Endorsements are available to modify the contract. - ANS-C. The insurer will provide policy coverage in return for the premium and compliance with policy provisions.
Alicia's house is insured under a HO-3 policy. When a fire damaged her garage, the claims representative told her that it would be covered under Coverage B—Other Structures. Under the HO-3 policy, Coverage B—Other Structures applies to structures
Select one:
A. On the residence premises that are not attached to the dwelling and are separated from the dwelling by clear space.
B. Not on the residence premises but owned by the insured.
C. On the residence premises and more than 100 feet from the dwelling.
D. On the residence premises and attached to the residence premises by permanent structures. - ANS-A. On the residence premises that are not attached to the dwelling and are separated from the dwelling by clear space.
he HO-3 policy Coverage D provides coverage for
Select one:
A. The dwelling.
B. Loss of Use.
C. Other Structures.
D. Personal property. - ANS-B. Loss of Use.
Sammy and Sally Oshua insure their home with an HO-3 policy. They own a cocker spaniel puppy. While a neighboring couple and their five-year-old daughter were visiting, the puppy bit the girl as she was playing with it. The child suffered a serious wound and the neighbors sued the Oshuas. Which one of the following statements is true?
Select one:
A. Defense costs are not covered for the Oshuas if the lawsuit is found to be groundless.
B. In addition to paying up to the limit of liability, the insurer will pay defense costs associated with the lawsuit.
C. Because the child is a minor, the insurer will pay the damages regardless of legal liability.
D. Because the dog was on the Oshuas' property, they are not covered for injury to the child. - ANS-B. In addition to paying up to the limit of liability, the insurer will pay defense costs associated with the lawsuit.
Under Coverage E—Personal Liability of the HO-3 policy, the insurer's obligation to defend ends
A. Nothing
B. $2,500, less any applicable deductible
C. $12,000, less any applicable deductible
D. $14,500, less any applicable deductible - ANS-B. $2,500, less any applicable deductible
Marcus is buying insurance for his recent home purchase that will be covered by a DP-3 policy. In reading his policy, which one of the following will Marcus find is true?
Select one:
A. Marcus needs to add an endorsement to the DP-3 to cover personal property damage.
B. The DP-3 provides named perils coverage for the dwelling and personal property.
C. Marcus wants to add a theft endorsement to his DP-3 to cover personal property damage caused by burglars.
D. The DP-3 excludes coverage for theft of property that isn't part of the covered structure. - ANS-D. The DP-3 excludes coverage for theft of property that isn't part of the covered structure.
The "Write Your Own" (WYO) flood insurance program allows
Select one:
A. Insureds to tailor flood coverage to their own specific needs.
B. Participating Insurers write flood insurance using National Flood Insurance Program guidelines.
C. Insureds to carry flood coverage regardless of the property's location.
D. Insureds to purchase flood coverage without an agent or representative. - ANS-B. Participating Insurers write flood insurance using National Flood Insurance Program guidelines.
Westgrove is in the initial phase of its community's participation in the National Flood Insurance Program (NFIP), during which property owners are allowed to purchase limited amounts of insurance at subsidized rates. This is known as
Select one:
A. The regular program.
B. The emergency program.
C. The "Write-Your-Own" flood insurance program.
D. A beachfront or windstorm plan. - ANS-B. The emergency program.
Which one of the following types of personal inland marine forms is designed for frequent travelers?
Select one:
A. Personal Articles Standard Loss Settlement Form
B. Personal Effects Form
C. Tenant Homeowners Form
D. Personal Property Form - ANS-B. Personal Effects Form
The Personal Effects Form is specifically designed for
Select one:
A. Frequent travelers.
B. Homeowners.
C. Salespersons.
D. Financial institutions. - ANS-A. Frequent travelers.
he ownership and use of watercraft create various unique categories of loss exposures. Which one of the following is true regarding small boat policies used to cover many of these exposures?
Select one:
A. Most are written on a replacement cost basis.
B. Coverage is included for Jet Skis and WaveRunners.
C. They usually include the boat, motor, equipment and trailer.
D. They cover boats up to 36 feet in length. - ANS-C. They usually include the boat, motor, equipment and trailer.
Christina and Carlos Thomas have decided to place their auto insurance needs with the Windspring Group, a type of insurance arrangement called peer-to-peer insurance. Which one of the following will the Thomas family experience with this situation?
Select one:
A. The Thomas' peer-to-peer group began on a local level and now has proven it can easily and quickly achieve a countrywide presence.
B. Peer-to-peer insurance offers the novel insurance approaches of self-selection of pool members and how to manage excess funds.
C. Because of the limited but consistent growth of peer-to-peer insurance, a majority of states have approved the diverse regulatory requirements.
D. Because of the consistent and reliable pool of funds, reinsurance will not usually be needed for this type of insurance. - ANS-B. Peer-to-peer insurance offers the novel insurance approaches of self- selection of pool members and how to manage excess funds.
Alex and his marketing team are evaluating various new insurance platforms to provide research to serve their customers better. Which one of the following best describes what the team has accurately discovered?
Select one:
A. These platforms' differentiation is providing a specialized, tech-driven, and individual customer response.
B. Providing smart devices to insured homeowners will not prevent losses, but rather lower claim payments.
C. Tech-driven insurance platforms offer very different types of property insurance than traditional insurers.
D. Startups do best when they quickly break into a new market and exclusively focus on established customers. - ANS-A. These platforms' differentiation is providing a specialized, tech-driven, and individual customer response.
The Transportation Network Driver Coverage (No Passenger) endorsement
Select one:
A. Specifies that coverage does not apply to Part C—Uninsured Motorists Coverage.
B. Provides coverage when the insured is logged into a transportation network platform until the driver accepts a passenger's request.
C. Provides coverage without passengers while the driver is logged into a transportation network platform.
D. Adds a transportation network platform definition. - ANS-C. Provides coverage without passengers while the driver is logged into a transportation network platform.
Which one of the following is correct regarding the Transportation Network Driver Coverage (No Passenger) endorsement and the Limited Transportation Network Driver Coverage (No Passenger) Endorsement to the personal auto policy?
Select one:
A. They both end coverage when an insured accepts a passenger's request.
B. They both exclude coverage when a passenger is occupying the vehicle.
C. They both provide the same coverage, but one requires more premium.
D. They both provide coverage until a passenger enters the vehicle. - ANS-B. They both exclude coverage when a passenger is occupying the vehicle.
Erin makes custom draperies in the basement of her home. Initially, she made these draperies for herself and family members, but she began to sell these draperies to a broader audience. Which one of the following exposures would likely be covered under an unendorsed homeowners policy should Erin's home be destroyed by a covered peril?
Select one:
A. The loss of customer data Erin stored on her computer
B. The cost to replace her sewing equipment
C. The loss of income from drapery sales while the home is rebuilt
D. The cost of materials purchased to aid in increasing sales - ANS-B. The cost to replace her sewing equipment
Because they interview the applicant first, see the property or operations to be insured, and evaluate the loss exposures, the most important primary source of information for the underwriters is the
Select one:
A. Risk control representative.
B. Property-valuation guide supplier.
C. Financial and credit-reporting service.
D. Producers. - ANS-D. Producers.
Applications and questionnaires for personal liability insurance should be carefully evaluated to look for issues that can increase potential loss frequency and severity, such as
Select one:
A. Stairways in good repair and free of obstructions.
B. Poor housekeeping and maintenance of premises or an unfenced pool.
C. Swimming pools surrounded by fences and well-lit porches.
D. The removal of dead trees and bicycles stored in a garage. - ANS-B. Poor housekeeping and maintenance of premises or an unfenced pool.
As an insurance agent, Lucy uses various ways to keep in touch with customers. Based on her experience, she knows that this will help improve customer retention. Which one of the following would be considered cross-selling?
Select one:
A. Sending e-newsletters explaining loss exposures
B. Sending out "Getting to Know You" surveys
C. Offering to quote other lines of coverage
D. Completing an annual policy review - ANS-C. Offering to quote other lines of coverage
Which one of the following is a way in which cross-selling benefits customers?
Select one:
A. Lower costs
B. Reduction of coverage gaps
C. Improved retention
D. Increased profitability - ANS-B. Reduction of coverage gaps
An insurance policy is an agreement between the insured and the insurer. Insureds purchase insurance so that
Select one:
A. Covered claims will be paid and their financial situation will be restored..
B. All claims will be paid and defended regardless of legal merit.
C. They can improve their financial situation in the event of a covered loss.
D. They can retain and budget for losses below the policy limits. - ANS-A. Covered claims will be paid and their financial situation will be restored.
Property insurers are subject to the possibility of many claims occurring from a single event and straining their resources. This type of event is called
Select one:
A. A catastrophe.
B. A simulation.
C. An occurrence.
D. An accident. - ANS-A. A catastrophe.
Installing burglar alarms, storing vehicles in a garage, and maintaining vehicles in good working order are all examples of which one of the following?
Select one:
C. A guest slips on an icy sidewalk in front of the family's home and breaks his leg.
D. The daughter, who is 16 years old, sideswipes a neighbor's car and dents its fender while driving her own car. - ANS-A. The father trips on a broom he left lying in the driveway and breaks his arm.
Under the tort liability system, injured accident victims must prove that
Select one:
A. Another party was at fault before they can collect damages.
B. They are unable to purchase insurance from another source before they can collect damages.
C. The insurance limits they have purchased are equal to or greater than the state minimum limits before they can collect damages.
D. They have met the financial responsibility laws of the state before they can collect damages. - ANS-A. Another party was at fault before they can collect damages.
Which one of the following is used by the majority of states to compensate auto accident victims?
Select one:
A. Personal injury protection coverage
B. Tort liability system
C. Uninsured motorist coverage
D. Unsatisfied judgment funds - ANS-B. Tort liability system
All of the following are true of the HO-3 Special Form, EXCEPT:
Select one:
A. The HO-3 meets the property and liability coverage needs of most families.
B. The HO-3 can be modified for special needs through available endorsements.
C. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
D. The HO-3 is typically used as a basis for understanding other HO coverage forms. - ANS-C. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
Which one of the following is true regarding the use of technology in home risk management?
Select one:
A. Technology is more prevalent, abundant, and useful in homes than in automotive environments.
B. Smart devices in the home have reaffirmed the need for existing claims data to assess risk.
C. Sensors are generally regarded as useful in loss prevention, but not in loss reduction.
D. Data gathered from sensors is used by insurers for personalized pricing and claims handling. - ANS-D. Data gathered from sensors is used by insurers for personalized pricing and claims handling.
All of the following will be shown under the Schedule of Coverages section on the Declarations page of the Personal Auto Policy (PAP), EXCEPT:
Select one:
A. Deductibles
B. Endorsements
C. Premiums
D. Limits of insurance - ANS-B. Endorsements
The timeframe, beginning with the inception date, during which insurance coverage applies, is known as the
Select one:
A. Expiration date.
B. Policy period.
C. Coverage date.
D. Rating period. - ANS-B. Policy period.
Under the liability coverage in the Personal Auto Policy (PAP), the insurer agrees to pay
Select one:
