AINS 101 ACTUAL EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS A GRADE 2024;;100%
GUARANTEED PASS
Which of the following is an example of a legal requirement for individuals that could be met through
insurance?
a. contributing to the growth of the organization
b. paying for losses
c. obtaining personal auto insurance
d. providing a source of investment funds - ANSWER c. obtaining personal auto insurance
A fire destroys the kitchen in Rob and Laurie's home. Which insurance policy would provide coverage for
the damage?
a. Homeowners Policy (Personal Liability)
b. Homeowners Policy (Property)
c. Personal Umbrella Policy
d. Personal Auto Policy - ANSWER b. Homeowners Policy (Property)
Which insurance policy could protect Rob and Laurie's sandwich shop against losses from employee
theft?
a. Workers Compensation
b. Commercial Crime
c. Commercial Property
d. Commercial General Liability
e. Commercial Auto - ANSWER b. Commercial Crime
,The best indication of an insurer's overall financial health is the - ANSWER policyholders surplus (It
shows how much cash an insurer has on hand for emergencies, unexpected losses, and expansion of
business)
Combined ratio = - ANSWER loss ratio + expense ratio
expense ratio = - ANSWER incurred underwriting expenses / written premiums
loss ratio = - ANSWER incurred losses (including loss adjustment expenses) / earned premiums
Marco has been approved for a car insurance policy with a low premium because on his application he
gave an address in a low-crime area. However, the actual address at which he lives and parks his car is in
a high-crime area. What is this an example of?
a. Growing capacity
b. Adverse selection
c. Creating surplus
d. Following underwriting guidelines - ANSWER b. Adverse selection
Emily is the underwriter for Marco's account. What is one way she could detect and minimize instances
of adverse selection such as this?
a. Increase auto policy premiums
b. Ensure adequate policyholders' surplus
c. Monitor the book of business for unusual patterns of policy growth or losses
d. Alter the underwriting guidelines - ANSWER c. Monitor the book of business for unusual patterns of
policy growth or losses
These underwriters evaluate individual insurance applications and policy renewals and manage their
own books of business. In many ways, they are the public face of the Underwriting Department -
ANSWER field underwriters
These underwriters make large-scale decisions about coverage, pricing, lines of business, and the overall
risk selection process - ANSWER corporate underwriters
,What do underwriters evaluate to determine the appropriate classification for a commercial operation?
a. the insurer's book of business
b. specific characteristics of the insured's operation
c. the producer's years of experience on the job
d. policy holders' surplus - ANSWER b. specific characteristics of the insured's operation
Exposure unit to the type of insurance it's typically used for:
Each vehicle - ANSWER auto
Exposure unit to the type of insurance it's typically used for:
Each $100 of insured value - ANSWER commercial property
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of gross sales - ANSWER general liability
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of insured value - ANSWER homeowners
Exposure unit to the type of insurance it's typically used for:
Each $100 of payroll - ANSWER workers comp
Maria accidentally rear-ended Kenneth at a stop light. After the two made sure they were both
uninjured, they exchanged insurance information. Shortly afterward, Kenneth called Maria's insurer and
talked to Javier to report the damages to his car.
______ is the claim's representative. - ANSWER Javier
, Maria accidentally rear-ended Kenneth at a stop light. After the two made sure they were both
uninjured, they exchanged insurance information. Shortly afterward, Kenneth called Maria's insurer and
talked to Javier to report the damages to his car.
_____ is the claimant. - ANSWER Kenneth
Belinda is a claims professional who works outside her organization's office. She generally handles claims
that require investigating the scene of a loss; resolving complex investigative issues; and meeting with
insureds, claimants, lawyers, and others involved in a claim. What type of claims representative is she?
a. Telephone claims representative
b. Claims manager
c. Claims supervisor
d. Field claims representative - ANSWER d. Field claims representative
If Tania needed to consult an accident-scene reconstruction specialist, she would have been engaged in
which one of these claims hand
ling activities?
a. Investigating and documenting the claim.
b. Contacting the insured or the insured's representative
c. Identifying the policy that may cover the claim
d. Acknowledging a claim and assigning it to the claims representative - ANSWER a. Investigating and
documenting the claim.
Using the previous example, let's say the couch destroyed in the fire has a ten-year lifespan and
replacement value of $800. If it was four years old and insured for its actual cash value, how much would
the policyholder receive?
a. $480
b. $800
c. $380
d. $600 - ANSWER a. $480
CORRECT VERIFIED ANSWERS A GRADE 2024;;100%
GUARANTEED PASS
Which of the following is an example of a legal requirement for individuals that could be met through
insurance?
a. contributing to the growth of the organization
b. paying for losses
c. obtaining personal auto insurance
d. providing a source of investment funds - ANSWER c. obtaining personal auto insurance
A fire destroys the kitchen in Rob and Laurie's home. Which insurance policy would provide coverage for
the damage?
a. Homeowners Policy (Personal Liability)
b. Homeowners Policy (Property)
c. Personal Umbrella Policy
d. Personal Auto Policy - ANSWER b. Homeowners Policy (Property)
Which insurance policy could protect Rob and Laurie's sandwich shop against losses from employee
theft?
a. Workers Compensation
b. Commercial Crime
c. Commercial Property
d. Commercial General Liability
e. Commercial Auto - ANSWER b. Commercial Crime
,The best indication of an insurer's overall financial health is the - ANSWER policyholders surplus (It
shows how much cash an insurer has on hand for emergencies, unexpected losses, and expansion of
business)
Combined ratio = - ANSWER loss ratio + expense ratio
expense ratio = - ANSWER incurred underwriting expenses / written premiums
loss ratio = - ANSWER incurred losses (including loss adjustment expenses) / earned premiums
Marco has been approved for a car insurance policy with a low premium because on his application he
gave an address in a low-crime area. However, the actual address at which he lives and parks his car is in
a high-crime area. What is this an example of?
a. Growing capacity
b. Adverse selection
c. Creating surplus
d. Following underwriting guidelines - ANSWER b. Adverse selection
Emily is the underwriter for Marco's account. What is one way she could detect and minimize instances
of adverse selection such as this?
a. Increase auto policy premiums
b. Ensure adequate policyholders' surplus
c. Monitor the book of business for unusual patterns of policy growth or losses
d. Alter the underwriting guidelines - ANSWER c. Monitor the book of business for unusual patterns of
policy growth or losses
These underwriters evaluate individual insurance applications and policy renewals and manage their
own books of business. In many ways, they are the public face of the Underwriting Department -
ANSWER field underwriters
These underwriters make large-scale decisions about coverage, pricing, lines of business, and the overall
risk selection process - ANSWER corporate underwriters
,What do underwriters evaluate to determine the appropriate classification for a commercial operation?
a. the insurer's book of business
b. specific characteristics of the insured's operation
c. the producer's years of experience on the job
d. policy holders' surplus - ANSWER b. specific characteristics of the insured's operation
Exposure unit to the type of insurance it's typically used for:
Each vehicle - ANSWER auto
Exposure unit to the type of insurance it's typically used for:
Each $100 of insured value - ANSWER commercial property
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of gross sales - ANSWER general liability
Exposure unit to the type of insurance it's typically used for:
Each $1,000 of insured value - ANSWER homeowners
Exposure unit to the type of insurance it's typically used for:
Each $100 of payroll - ANSWER workers comp
Maria accidentally rear-ended Kenneth at a stop light. After the two made sure they were both
uninjured, they exchanged insurance information. Shortly afterward, Kenneth called Maria's insurer and
talked to Javier to report the damages to his car.
______ is the claim's representative. - ANSWER Javier
, Maria accidentally rear-ended Kenneth at a stop light. After the two made sure they were both
uninjured, they exchanged insurance information. Shortly afterward, Kenneth called Maria's insurer and
talked to Javier to report the damages to his car.
_____ is the claimant. - ANSWER Kenneth
Belinda is a claims professional who works outside her organization's office. She generally handles claims
that require investigating the scene of a loss; resolving complex investigative issues; and meeting with
insureds, claimants, lawyers, and others involved in a claim. What type of claims representative is she?
a. Telephone claims representative
b. Claims manager
c. Claims supervisor
d. Field claims representative - ANSWER d. Field claims representative
If Tania needed to consult an accident-scene reconstruction specialist, she would have been engaged in
which one of these claims hand
ling activities?
a. Investigating and documenting the claim.
b. Contacting the insured or the insured's representative
c. Identifying the policy that may cover the claim
d. Acknowledging a claim and assigning it to the claims representative - ANSWER a. Investigating and
documenting the claim.
Using the previous example, let's say the couch destroyed in the fire has a ten-year lifespan and
replacement value of $800. If it was four years old and insured for its actual cash value, how much would
the policyholder receive?
a. $480
b. $800
c. $380
d. $600 - ANSWER a. $480
