AINS 101 Exam Questions With
Correct Marking Scheme
/. Actual cash value (ACV) - Answer-✅The cost to replace property with new property of
like kind and quality less depreciation.
/.Adverse selection - Answer-✅Insuring individuals with a high probability of loss at a
cost lower than the insurer would normally charge for that risk because it wasn't aware
of the actual risk involved.
/.Binder - Answer-✅A temporary written or oral agreement to provide insurance
coverage until a formal written policy is issued.
/.Book of business - Answer-✅A group of policies with a common characteristic, such
as territory or type of coverage, or all policies written by a particular insurer or agency.
/.Broker - Answer-✅An independent producer who represents insurance customers.
/.Brokerage - Answer-✅Compensation in the form of a flat fee or a commission that is
paid by the reinsurer to the reinsurance intermediary for services provided.
/.Capacity - Answer-✅The amount of business an insurer is able to write, usually based
on a comparison of the insurer's written premiums to its policyholders' surplus
/.Catastrophe model - Answer-✅A type of computer program that estimates losses from
future potential catastrophic events.
/.Certificate of insurance - Answer-✅A brief description of insurance coverage prepared
by an insurer or its agent and commonly used by policyholders to provide evidence of
insurance.
/.Claim - Answer-✅A demand by a person or business seeking to recover from an
insurer for a loss that may be covered by an insurance policy.
/.Claimant - Answer-✅A party that makes a claim and that can be either a first-party
claimant or a third-party claimant.
/.Claims representative - Answer-✅A person responsible for investigating, evaluating,
and settling claims.
, /.Compensatory damages - Answer-✅A payment awarded by a court to reimburse a
victim for actual harm.
/.Condition - Answer-✅Any provision in an insurance policy that qualifies an otherwise
enforceable promise of the insurer.
/.Conditional contract - Answer-✅A contract that one or more parties must perform only
under certain conditions.
/.Contract of adhesion - Answer-✅Any contract in which one party must either accept
the agreement as written by the other party or reject it.
/.Contract of indemnity - Answer-✅A contract in which the insurer agrees, in the event
of a covered loss, to pay an amount directly related to the amount of the loss.
/.Damages - Answer-✅Money claimed by, or a monetary award to, a party who has
suffered loss or injury for which another party is legally responsible
/.Declarations page - Answer-✅An insurance policy information page or pages
providing specific details about the insured and the subject of the insurance
/.Deductible - Answer-✅A portion of a covered loss that is not paid by an insurer.
/.Depreciation - Answer-✅The reduction in value caused by the physical wear and tear
or technological or economic obsolescence of property.
/.Exclusion - Answer-✅A policy provision that eliminates coverage for specified
exposures.
/.Exposure unit - Answer-✅The unit of measure (for example, area, gross receipts,
payroll) used to determine an insurance policy premium.
/.Fortuitous loss - Answer-✅A loss that is accidental and unexpected.
/.General damages - Answer-✅A monetary award to compensate a victim for losses,
such as pain and suffering that does not involve specific, measurable expenses.
/.Indemnify - Answer-✅To restore a party who has sustained a loss to the same
financial position that party held before the loss occurred.
/.Independent exposures - Answer-✅Group of many persons purchasing insurance
independently and not affected by the losses of others
Correct Marking Scheme
/. Actual cash value (ACV) - Answer-✅The cost to replace property with new property of
like kind and quality less depreciation.
/.Adverse selection - Answer-✅Insuring individuals with a high probability of loss at a
cost lower than the insurer would normally charge for that risk because it wasn't aware
of the actual risk involved.
/.Binder - Answer-✅A temporary written or oral agreement to provide insurance
coverage until a formal written policy is issued.
/.Book of business - Answer-✅A group of policies with a common characteristic, such
as territory or type of coverage, or all policies written by a particular insurer or agency.
/.Broker - Answer-✅An independent producer who represents insurance customers.
/.Brokerage - Answer-✅Compensation in the form of a flat fee or a commission that is
paid by the reinsurer to the reinsurance intermediary for services provided.
/.Capacity - Answer-✅The amount of business an insurer is able to write, usually based
on a comparison of the insurer's written premiums to its policyholders' surplus
/.Catastrophe model - Answer-✅A type of computer program that estimates losses from
future potential catastrophic events.
/.Certificate of insurance - Answer-✅A brief description of insurance coverage prepared
by an insurer or its agent and commonly used by policyholders to provide evidence of
insurance.
/.Claim - Answer-✅A demand by a person or business seeking to recover from an
insurer for a loss that may be covered by an insurance policy.
/.Claimant - Answer-✅A party that makes a claim and that can be either a first-party
claimant or a third-party claimant.
/.Claims representative - Answer-✅A person responsible for investigating, evaluating,
and settling claims.
, /.Compensatory damages - Answer-✅A payment awarded by a court to reimburse a
victim for actual harm.
/.Condition - Answer-✅Any provision in an insurance policy that qualifies an otherwise
enforceable promise of the insurer.
/.Conditional contract - Answer-✅A contract that one or more parties must perform only
under certain conditions.
/.Contract of adhesion - Answer-✅Any contract in which one party must either accept
the agreement as written by the other party or reject it.
/.Contract of indemnity - Answer-✅A contract in which the insurer agrees, in the event
of a covered loss, to pay an amount directly related to the amount of the loss.
/.Damages - Answer-✅Money claimed by, or a monetary award to, a party who has
suffered loss or injury for which another party is legally responsible
/.Declarations page - Answer-✅An insurance policy information page or pages
providing specific details about the insured and the subject of the insurance
/.Deductible - Answer-✅A portion of a covered loss that is not paid by an insurer.
/.Depreciation - Answer-✅The reduction in value caused by the physical wear and tear
or technological or economic obsolescence of property.
/.Exclusion - Answer-✅A policy provision that eliminates coverage for specified
exposures.
/.Exposure unit - Answer-✅The unit of measure (for example, area, gross receipts,
payroll) used to determine an insurance policy premium.
/.Fortuitous loss - Answer-✅A loss that is accidental and unexpected.
/.General damages - Answer-✅A monetary award to compensate a victim for losses,
such as pain and suffering that does not involve specific, measurable expenses.
/.Indemnify - Answer-✅To restore a party who has sustained a loss to the same
financial position that party held before the loss occurred.
/.Independent exposures - Answer-✅Group of many persons purchasing insurance
independently and not affected by the losses of others
