AINS 102 PRACTICE EXAM | COMPLETE QUESTION
TEST BANK & PREP GUIDE
(330 questions & Answers)
1. John is a recent homeowner and is considering the insurance coverage’s he
needs for his home and contents. If damaged by a peril covered by a
homeowner’s policy, which one of the following would be considered part of
John's real property?
Select one:
a. the boat in the driveway
b. the detached garage
c. the desk top computer
d. the hockey net and equipment
b. the detached garage
2. Which one of the following is considered real property?
Select one:
A. An automobile
B. A house
C. Furniture
D. A motorhome
B. A house
3. All of the following could lead to a liability loss for a family, EXCEPT:
Select one:
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. 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.
A. The father trips on a broom he left lying in the driveway and breaks his arm.
4. Which one of the following is a form of compensatory damages?
Select one:
A. Real damages
B. Special damages
C. Punitive damages
D. Exemplary damages
B. Special damages
,5. 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
B. Tort liability system
6. 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.
C. State regulators require that rates be adequate, reasonable, and not unfairly
discriminatory.
7. All of the following are true of the HO-3 Special Form, EXCEPT:
Select one:
A. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
B. The HO-3 meets the property and liability coverage needs of most families.
C. The HO-3 is typically used as a basis for understanding other HO coverage forms.
D. The HO-3 can be modified for special needs through available endorsements.
A. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
8. Estelle and Richie are very conservative and want to purchase insurance to
"cover everything" in order to lessen the worries of home ownership. Which one
of the following ISO forms will provide them dwelling and personal property
insurance with the broadest possible coverage?
Select one:
A. HO-2 Broad Form
B. HO-3 Special Form
C. HO-5 Comprehensive Form
D. HO-8 Modified Form
C. HO-5 Comprehensive Form
9. The Agreement and Definitions page of the Personal Auto Policy (PAP)
includes
Select one:
A. The name of the insurer issuing the policy.
,B. A general agreement stating the insurer's duty to pay damages and defense costs
subject to the terms of the policy.
C. A general agreement stating that the insurer is providing the coverage subject to
payment of premium and to the terms of the policy.
D. The name and mailing address of the insured.
C. A general agreement stating that the insurer is providing the coverage subject to
payment of premium and to the terms of the policy.
10. In the Personal Auto Policy (PAP) definitions, "Your covered auto" includes all
of the following classes of vehicles, EXCEPT:
Select one:
A. A trailer owned by the insured
B. A temporary substitute auto or trailer
C. A newly acquired auto
D. A trailer rented by the insured
D. A trailer rented by the insured
11. Brendan and Sue were on a road trip along the coast of California, using Sue's
car. One day they were stuck in terrible traffic while Brendan was driving. He
became angry when another car merged in front of him. A few minutes later,
Brendan deliberately rammed into the car that had cut in front of him, causing
property damage to the other car. Both Brendan and Sure were surprised to learn
that Sue's Personal Auto Policy (PAP) would not cover the claim. Which one of
the following is the correct reason why Sue's PAP will not pay the claim for
property damage to the other car?
Select one:
A. Because the Part A insuring agreement excludes intentional harm.
B. Because Sue's PAP only covers property damage to her car.
C. Because Brendan, not Sue, was driving the car.
D. Because Brendan's PAP should cover the claim.
A. Because the Part A insuring agreement excludes intentional harm.
12. Miguel, an insured has a Personal Auto Policy (PAP) that includes medical
payments coverage. The insured crashed his car while trying to be the first car to
pull away from a stop at a red light when the light turned green. In this scenario,
Miguel
Select one:
A. Would be eligible for medical payments under the Personal Auto Policy (PAP)
because he wasn't caught speeding at the scene.
B. Would not be eligible for medical payments under the Personal Auto Policy (PAP) if
he was found at fault because of this accident.
C. Would be eligible for medical payments under the Personal Auto Policy (PAP) as the
named insured and an occupant of a covered auto.
D. Would not be eligible for medical payments under the Personal Auto Policy (PAP)
because he is being reckless.
, C. Would be eligible for medical payments under the Personal Auto Policy (PAP) as the
named insured and an occupant of a covered auto.
13. 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 first insurer to receive notice of the claim becomes primarily liable.
B. The courts will decide how to assess the payment amounts.
C. The insurer issuing the policy with the higher limits of liability will make the
determination.
D. The Other Insurance provision will address how to address the particular situation.
D. The Other Insurance provision will address how to address the particular situation.
14. 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. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages
D. Compensatory damages
15. 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. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages
B. Denied because coverage under these circumstances is excluded.
16. Which one of the following causes of loss is covered under the other than
collision (OTC) section of the Personal Auto Policy (PAP)?
Select one:
A. Hitting another car
B. Overturn from the driver losing control
C. Falling objects
D. Hitting a tree
C. Falling objects
TEST BANK & PREP GUIDE
(330 questions & Answers)
1. John is a recent homeowner and is considering the insurance coverage’s he
needs for his home and contents. If damaged by a peril covered by a
homeowner’s policy, which one of the following would be considered part of
John's real property?
Select one:
a. the boat in the driveway
b. the detached garage
c. the desk top computer
d. the hockey net and equipment
b. the detached garage
2. Which one of the following is considered real property?
Select one:
A. An automobile
B. A house
C. Furniture
D. A motorhome
B. A house
3. All of the following could lead to a liability loss for a family, EXCEPT:
Select one:
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. 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.
A. The father trips on a broom he left lying in the driveway and breaks his arm.
4. Which one of the following is a form of compensatory damages?
Select one:
A. Real damages
B. Special damages
C. Punitive damages
D. Exemplary damages
B. Special damages
,5. 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
B. Tort liability system
6. 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.
C. State regulators require that rates be adequate, reasonable, and not unfairly
discriminatory.
7. All of the following are true of the HO-3 Special Form, EXCEPT:
Select one:
A. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
B. The HO-3 meets the property and liability coverage needs of most families.
C. The HO-3 is typically used as a basis for understanding other HO coverage forms.
D. The HO-3 can be modified for special needs through available endorsements.
A. The HO-3 is designed for owners who occupy their dwelling or choose to rent it.
8. Estelle and Richie are very conservative and want to purchase insurance to
"cover everything" in order to lessen the worries of home ownership. Which one
of the following ISO forms will provide them dwelling and personal property
insurance with the broadest possible coverage?
Select one:
A. HO-2 Broad Form
B. HO-3 Special Form
C. HO-5 Comprehensive Form
D. HO-8 Modified Form
C. HO-5 Comprehensive Form
9. The Agreement and Definitions page of the Personal Auto Policy (PAP)
includes
Select one:
A. The name of the insurer issuing the policy.
,B. A general agreement stating the insurer's duty to pay damages and defense costs
subject to the terms of the policy.
C. A general agreement stating that the insurer is providing the coverage subject to
payment of premium and to the terms of the policy.
D. The name and mailing address of the insured.
C. A general agreement stating that the insurer is providing the coverage subject to
payment of premium and to the terms of the policy.
10. In the Personal Auto Policy (PAP) definitions, "Your covered auto" includes all
of the following classes of vehicles, EXCEPT:
Select one:
A. A trailer owned by the insured
B. A temporary substitute auto or trailer
C. A newly acquired auto
D. A trailer rented by the insured
D. A trailer rented by the insured
11. Brendan and Sue were on a road trip along the coast of California, using Sue's
car. One day they were stuck in terrible traffic while Brendan was driving. He
became angry when another car merged in front of him. A few minutes later,
Brendan deliberately rammed into the car that had cut in front of him, causing
property damage to the other car. Both Brendan and Sure were surprised to learn
that Sue's Personal Auto Policy (PAP) would not cover the claim. Which one of
the following is the correct reason why Sue's PAP will not pay the claim for
property damage to the other car?
Select one:
A. Because the Part A insuring agreement excludes intentional harm.
B. Because Sue's PAP only covers property damage to her car.
C. Because Brendan, not Sue, was driving the car.
D. Because Brendan's PAP should cover the claim.
A. Because the Part A insuring agreement excludes intentional harm.
12. Miguel, an insured has a Personal Auto Policy (PAP) that includes medical
payments coverage. The insured crashed his car while trying to be the first car to
pull away from a stop at a red light when the light turned green. In this scenario,
Miguel
Select one:
A. Would be eligible for medical payments under the Personal Auto Policy (PAP)
because he wasn't caught speeding at the scene.
B. Would not be eligible for medical payments under the Personal Auto Policy (PAP) if
he was found at fault because of this accident.
C. Would be eligible for medical payments under the Personal Auto Policy (PAP) as the
named insured and an occupant of a covered auto.
D. Would not be eligible for medical payments under the Personal Auto Policy (PAP)
because he is being reckless.
, C. Would be eligible for medical payments under the Personal Auto Policy (PAP) as the
named insured and an occupant of a covered auto.
13. 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 first insurer to receive notice of the claim becomes primarily liable.
B. The courts will decide how to assess the payment amounts.
C. The insurer issuing the policy with the higher limits of liability will make the
determination.
D. The Other Insurance provision will address how to address the particular situation.
D. The Other Insurance provision will address how to address the particular situation.
14. 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. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages
D. Compensatory damages
15. 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. Lost wages
B. Rehabilitation expenses
C. Medical expenses
D. Compensatory damages
B. Denied because coverage under these circumstances is excluded.
16. Which one of the following causes of loss is covered under the other than
collision (OTC) section of the Personal Auto Policy (PAP)?
Select one:
A. Hitting another car
B. Overturn from the driver losing control
C. Falling objects
D. Hitting a tree
C. Falling objects
