AINS 102 EXAM QUIZ AND ITS
CORRECT ANSWERS
Patrick's car is 12 years-old and has been driven for
over 100,000 miles. He has decided that instead of
continuing to pay insurance premium for coverage for
property damage to his car, he will put the money
aside to save for a new car. Which one of the following
risk management techniques is Patrick using?
A) Loss reduction
B) Avoidance
C) Retention
D) Diversification
C
Heather and Jeff had the roof blown off their home
during a recent storm. Which one of the following best
expresses the financial outcome they are currently
experiencing?
A) Lost income
B) Reduction in property value
C) Increased expenses
D) No change in their financial outcome
B
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?
A) Damages to the vehicle
B) Hospital and medical bills
C) Two months of lost wages
D) Mental distress compensation
D
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
A) Punitive damages.
B) Special damages.
C) General damages.
D) Necessary damages.
A
, Which one of the following is considered a high-risk
driver?
A) Stacey was involved in a deadly car accident.
B) Mark was caught and convicted of driving under
the influence of alcohol
C) Martin can only qualify for the most expensive auto
insurance
D) Cyndy cannot obtain insurance from a private
insurer
B
Coverage that pays benefits, regardless of fault, for
medical expense, income loss, and other benefits,
resulting from bodily injury to occupants of a covered
auto is
A) Compulsory auto insurance law coverage
B) Residual market coverage
C) Personal injury protection coverage
D) Financial responsibility law coverage
C
All of the following are true of the HO-3 Special Form,
EXCEPT:
A) The HO-3 is designed for owners who occupy their
dwelling or choose to rent it.
B) The HO-3 can be modified for special needs
through available endorsements.
C) The HO-3 is typically used as a basis for
understanding other HO coverage forms.
CORRECT ANSWERS
Patrick's car is 12 years-old and has been driven for
over 100,000 miles. He has decided that instead of
continuing to pay insurance premium for coverage for
property damage to his car, he will put the money
aside to save for a new car. Which one of the following
risk management techniques is Patrick using?
A) Loss reduction
B) Avoidance
C) Retention
D) Diversification
C
Heather and Jeff had the roof blown off their home
during a recent storm. Which one of the following best
expresses the financial outcome they are currently
experiencing?
A) Lost income
B) Reduction in property value
C) Increased expenses
D) No change in their financial outcome
B
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?
A) Damages to the vehicle
B) Hospital and medical bills
C) Two months of lost wages
D) Mental distress compensation
D
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
A) Punitive damages.
B) Special damages.
C) General damages.
D) Necessary damages.
A
, Which one of the following is considered a high-risk
driver?
A) Stacey was involved in a deadly car accident.
B) Mark was caught and convicted of driving under
the influence of alcohol
C) Martin can only qualify for the most expensive auto
insurance
D) Cyndy cannot obtain insurance from a private
insurer
B
Coverage that pays benefits, regardless of fault, for
medical expense, income loss, and other benefits,
resulting from bodily injury to occupants of a covered
auto is
A) Compulsory auto insurance law coverage
B) Residual market coverage
C) Personal injury protection coverage
D) Financial responsibility law coverage
C
All of the following are true of the HO-3 Special Form,
EXCEPT:
A) The HO-3 is designed for owners who occupy their
dwelling or choose to rent it.
B) The HO-3 can be modified for special needs
through available endorsements.
C) The HO-3 is typically used as a basis for
understanding other HO coverage forms.
