AINS 21 Segment A Exam Questions with
correct Answers 2025/2026 A+ Graded
100% Verified
Though premiums are an obvious cost of insurance, many insureds believe they are too
high because - ANS- Benefits are intangible until a loss occurs.
Pravalt Construction Company pays less than its competitors for workers compensation
insurance because Pravalt has had substantially fewer employee injuries than other firms
in its class. This illustrates which one of the following benefits of insurance? - ANS-
Promote risk control
Which one of the following statements is correct regarding the benefits that insurance
provides? - ANS- Investment income helps keep insurance premiums at a reasonable
level.
As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance.
However, her friend Mehmet tells her not to skimp on insurance, because it will help
manage her cash flows. Which one of the following examples best illustrates Mehmet's
point? - ANS- When her car's windshield breaks, Ciara has to pay only $100 of the $600
cost of replacing it.
The primary role of insurance is to - ANS- Indemnify individuals and organizations for
covered losses.
Insurance is not the only risk management transfer technique. When circumstances are
appropriate, transfer can be accomplished through - ANS- Noninsurance transfer
techniques.
Retention is often used in combination with insurance as a way of treating loss
exposures. One of the major downsides of individuals using retention alone is - ANS-
The potential for financial ruin.
Harry has a new sports car that is insured with an Insurance Services Office, Inc. (ISO)
Personal Auto Policy sold through his neighborhood agent. Because this is the first new
car he's ever owned, Harry is interested in making sure he is fully covered and
knowledgeable about his insurance policy. Which one of the following is true for Harry? -
, ANS- An insurance contract, like the ISO policy Harry purchased, has certain additional
characteristics other than those of typical valid contracts.
Sally is a recent college graduate who lives in the suburbs and drives to work daily in the
city. She recognizes that owning a car creates both property damage and liability
exposures for her and at the same time she has the burden of student loans. For
someone in Sally's circumstances the most practical risk management technique for
dealing with her auto-related loss exposures is - ANS- Risk transfer.
From a risk management viewpoint, insurance is used to - ANS- Transfer the cost of
losses.
Coverage for miscellaneous types of property such as movable property, goods in
domestic transit, and property used in transportation and communication, typically is
provided by - ANS- Inland marine insurance.
A policy that combines property, crime, and liability coverages into one policy is referred
to as a(n) - ANS- Commercial package policy (CPP).
The type of insurance that provides periodic income payments to an insured who is
unable to work because of sickness or injury is - ANS- Disability income insurance.
If a customer slips and falls in an insured's store, which one of the following provides
protection in the event of a lawsuit? - ANS- Commercial general liability (CGL) insurance
The two primary types of health insurance coverage are - ANS- Medical and Disability
Income.
A reinsurance company - ANS- Assumes loss exposures from a primary insurer.
Properties of Insurtech Companies include all of the following, EXCEPT: - ANS-
Elimination for the need of underwriters given the technological advances in this space.
All of the following are types of private insurers, EXCEPT - ANS- State workers
compensation funds
A type of insurer that has a board of directors elected by policyholders and that may pay
dividends to policyholders as a return of a portion of premiums paid is a - ANS- Mutual
insurer.
A reciprocal insurance exchange - ANS- Is an unincorporated association providing
insurance coverage to its subscribers.
correct Answers 2025/2026 A+ Graded
100% Verified
Though premiums are an obvious cost of insurance, many insureds believe they are too
high because - ANS- Benefits are intangible until a loss occurs.
Pravalt Construction Company pays less than its competitors for workers compensation
insurance because Pravalt has had substantially fewer employee injuries than other firms
in its class. This illustrates which one of the following benefits of insurance? - ANS-
Promote risk control
Which one of the following statements is correct regarding the benefits that insurance
provides? - ANS- Investment income helps keep insurance premiums at a reasonable
level.
As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance.
However, her friend Mehmet tells her not to skimp on insurance, because it will help
manage her cash flows. Which one of the following examples best illustrates Mehmet's
point? - ANS- When her car's windshield breaks, Ciara has to pay only $100 of the $600
cost of replacing it.
The primary role of insurance is to - ANS- Indemnify individuals and organizations for
covered losses.
Insurance is not the only risk management transfer technique. When circumstances are
appropriate, transfer can be accomplished through - ANS- Noninsurance transfer
techniques.
Retention is often used in combination with insurance as a way of treating loss
exposures. One of the major downsides of individuals using retention alone is - ANS-
The potential for financial ruin.
Harry has a new sports car that is insured with an Insurance Services Office, Inc. (ISO)
Personal Auto Policy sold through his neighborhood agent. Because this is the first new
car he's ever owned, Harry is interested in making sure he is fully covered and
knowledgeable about his insurance policy. Which one of the following is true for Harry? -
, ANS- An insurance contract, like the ISO policy Harry purchased, has certain additional
characteristics other than those of typical valid contracts.
Sally is a recent college graduate who lives in the suburbs and drives to work daily in the
city. She recognizes that owning a car creates both property damage and liability
exposures for her and at the same time she has the burden of student loans. For
someone in Sally's circumstances the most practical risk management technique for
dealing with her auto-related loss exposures is - ANS- Risk transfer.
From a risk management viewpoint, insurance is used to - ANS- Transfer the cost of
losses.
Coverage for miscellaneous types of property such as movable property, goods in
domestic transit, and property used in transportation and communication, typically is
provided by - ANS- Inland marine insurance.
A policy that combines property, crime, and liability coverages into one policy is referred
to as a(n) - ANS- Commercial package policy (CPP).
The type of insurance that provides periodic income payments to an insured who is
unable to work because of sickness or injury is - ANS- Disability income insurance.
If a customer slips and falls in an insured's store, which one of the following provides
protection in the event of a lawsuit? - ANS- Commercial general liability (CGL) insurance
The two primary types of health insurance coverage are - ANS- Medical and Disability
Income.
A reinsurance company - ANS- Assumes loss exposures from a primary insurer.
Properties of Insurtech Companies include all of the following, EXCEPT: - ANS-
Elimination for the need of underwriters given the technological advances in this space.
All of the following are types of private insurers, EXCEPT - ANS- State workers
compensation funds
A type of insurer that has a board of directors elected by policyholders and that may pay
dividends to policyholders as a return of a portion of premiums paid is a - ANS- Mutual
insurer.
A reciprocal insurance exchange - ANS- Is an unincorporated association providing
insurance coverage to its subscribers.
