AINS 101 EXAM QUESTIONS AND
ANSWERS 2026 VERIFIED.
Risk - ANS Uncertainty about outcomes. Can be negative or positive
Transferring - ANS The act of transferring the financial consequences of unanticipated events
to an insurer
Pooling - ANS All insureds share the costs of eachothers' losses. Insurers combine all
premiums collected to pay losses as they occur
Personal Insurance (Property) - ANS Protects an insured's assets by covering the cost of
repairing or replacing property that is damaged, lost, or destroyed.
Personal Insurance (Liability) - ANS Provides payments for injury to others or damage to
other's property for which the insured is legally responsible. Also covers the cost to defend the
insured against related lawsuits
Personal Insurance (Health) - ANS Protects individuals and families from financial losses
caused by sickness or accidents
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 24
,Personal P&C Insurance (Homeowners) - ANS 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 desk
Personal Auto Insurance - ANS If insured is at fault in an accident, provides coverage for
personal bodily injury to another person or damage to another person's auto. Also provides
coverage for damaged to insured auto (not wear + tear). Legally required
Personal Umbrella Insurance - ANS Provides additional protection for people with a high
potential for large liability losses
Commercial Property Insurance - ANS Covers damage to buildings or their contents that
results from fire, vandalism, and other causes of loss
Commercial Crime Insurance - ANS Protects against losses from theft of business property
and money, including employee theft
Commercial General Liability - ANS Protects a business against its legal liability to others for
bodily injury or property damage
Commercial Auto Insurance - ANS Covers liability for bodily injury and property damage
caused by the use of the businesses' autos and also damage to the business own autos when
they are in an accident
Workers Compensation - ANS Covers legally required benefits that businesses are required to
pay to their employees for job-related injuries and illnesses
Commercial Umbrella Insurance - ANS Provides additional liability limits beyond those
provided by other commercial policies, protecting a business in the event of large liability loss
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 24
, Stock Insurers (Private Insurers) - ANS Objective is to earn a profit, and they attract
stockholders by the expectation of investment returns. Many large PC insurers are this.
Mutual Insurers (Private Insurers) - ANS Share profits, pay dividends to policyholders as a
return of a portion of premiums paid. Some large insurers and many regional insurers are this.
Surplus Lines Insurers (Private Insurers) - ANS Provide insurance coverages unavailable in the
standard market
Reinsurance (Private Insurers) - ANS Allows a primary insurer to transfer some loss exposures
to another insurer, the reinsurer. It can help a small insurer provide insurance for large accounts.
What role does the government play in insurance? - ANS - If a type of insurance is required,
the government makes sure it is available at a reasonable price
- Reduces time or resources needed to obtain insurance coverage
- Can help find insurance for accounts that private insurers are unwilling or unable to provide
Pure Risk - ANS A chance of loss or no loss, but no chance of gain.
Speculative Risk - ANS A chance of loss, no loss, or gain.
Hazard Risk - ANS Arises from property, liability, or personnel loss exposures
Operational Risk - ANS Arises from people, processes, systems, or controls
Financial Risk - ANS Arises from the effect of market forces on financial assets or liabilities
@COPYRIGHT ALL RIGHTS RESERVED PAGE 3 OF 24
ANSWERS 2026 VERIFIED.
Risk - ANS Uncertainty about outcomes. Can be negative or positive
Transferring - ANS The act of transferring the financial consequences of unanticipated events
to an insurer
Pooling - ANS All insureds share the costs of eachothers' losses. Insurers combine all
premiums collected to pay losses as they occur
Personal Insurance (Property) - ANS Protects an insured's assets by covering the cost of
repairing or replacing property that is damaged, lost, or destroyed.
Personal Insurance (Liability) - ANS Provides payments for injury to others or damage to
other's property for which the insured is legally responsible. Also covers the cost to defend the
insured against related lawsuits
Personal Insurance (Health) - ANS Protects individuals and families from financial losses
caused by sickness or accidents
@COPYRIGHT ALL RIGHTS RESERVED PAGE 1 OF 24
,Personal P&C Insurance (Homeowners) - ANS 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 desk
Personal Auto Insurance - ANS If insured is at fault in an accident, provides coverage for
personal bodily injury to another person or damage to another person's auto. Also provides
coverage for damaged to insured auto (not wear + tear). Legally required
Personal Umbrella Insurance - ANS Provides additional protection for people with a high
potential for large liability losses
Commercial Property Insurance - ANS Covers damage to buildings or their contents that
results from fire, vandalism, and other causes of loss
Commercial Crime Insurance - ANS Protects against losses from theft of business property
and money, including employee theft
Commercial General Liability - ANS Protects a business against its legal liability to others for
bodily injury or property damage
Commercial Auto Insurance - ANS Covers liability for bodily injury and property damage
caused by the use of the businesses' autos and also damage to the business own autos when
they are in an accident
Workers Compensation - ANS Covers legally required benefits that businesses are required to
pay to their employees for job-related injuries and illnesses
Commercial Umbrella Insurance - ANS Provides additional liability limits beyond those
provided by other commercial policies, protecting a business in the event of large liability loss
@COPYRIGHT ALL RIGHTS RESERVED PAGE 2 OF 24
, Stock Insurers (Private Insurers) - ANS Objective is to earn a profit, and they attract
stockholders by the expectation of investment returns. Many large PC insurers are this.
Mutual Insurers (Private Insurers) - ANS Share profits, pay dividends to policyholders as a
return of a portion of premiums paid. Some large insurers and many regional insurers are this.
Surplus Lines Insurers (Private Insurers) - ANS Provide insurance coverages unavailable in the
standard market
Reinsurance (Private Insurers) - ANS Allows a primary insurer to transfer some loss exposures
to another insurer, the reinsurer. It can help a small insurer provide insurance for large accounts.
What role does the government play in insurance? - ANS - If a type of insurance is required,
the government makes sure it is available at a reasonable price
- Reduces time or resources needed to obtain insurance coverage
- Can help find insurance for accounts that private insurers are unwilling or unable to provide
Pure Risk - ANS A chance of loss or no loss, but no chance of gain.
Speculative Risk - ANS A chance of loss, no loss, or gain.
Hazard Risk - ANS Arises from property, liability, or personnel loss exposures
Operational Risk - ANS Arises from people, processes, systems, or controls
Financial Risk - ANS Arises from the effect of market forces on financial assets or liabilities
@COPYRIGHT ALL RIGHTS RESERVED PAGE 3 OF 24
