AINS 101 FIRST EXAM
PRACTICE QUESTIONS WITH
100% CORRECT ANSWERS
A. $3,200 - correct answer- Bob is shopping for
auto insurance. Insurance Company A's rating system
determines that Bob should be charged $800 per auto. If
Bob is looking to insure four autos, what premium will he
be charged by Insurance Company A?
Select one:
A. $3,200
B. $200
C. $2,400
D. $800
A. Adverse selection. - correct 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 is
known as
,Select one:
A. Adverse selection.
B. Policyholders' surplus.
C. Unprofitable business.
D. Capacity.
A. Draft a manuscript form to meet the customer's needs.
- correct answer- When preprinted forms do
not provide the terms of coverage needed by a particular
insured or small group of insureds, the insurer may
Select one:
A. Draft a manuscript form to meet the customer's needs.
B. Incorporate statutes into a policy.
C. Ask the customer to resubmit an application.
D. Work with an advisory organization to develop a form.
A. Easily converted to cash. - correct answer-
Admitted assets are types of property that regulators
allow insurers to show as assets on their financial
statements because they are
,Select one:
A. Easily converted to cash.
B. Generally increasing in value.
C. Very stable in value.
D. Never subject to decreases in value.
A. Insuring Agreements - correct answer- The
big differences between property and liability policies are
found in their
Select one:
A. Insuring Agreements
B. Exclusions
C. Conditions
D. Definitions
A. Investments. - correct answer- Most of the
income an insurer receives is either from underwriting or
Select one:
A. Investments.
, B. Policyholders' surplus.
C. Nonadmitted assets.
D. Losses.
A. Is free to work with as many different insurers as it
wants. - correct answer- Spencer Insurance
Associates is an independent agency selling primarily
homeowners policies. This agency
Select one:
A. Is free to work with as many different insurers as it
wants.
B. Can use the policyholder expiration lists, but they are
owned by insurers.
C. Generally represents its customers rather than
insurance companies.
D. Cannot commit an insurer to write a policy, unlike a
broker, who usually can.
A. Personal property-casualty insurance policy. -
correct answer- A homeowners policy is a type
of
PRACTICE QUESTIONS WITH
100% CORRECT ANSWERS
A. $3,200 - correct answer- Bob is shopping for
auto insurance. Insurance Company A's rating system
determines that Bob should be charged $800 per auto. If
Bob is looking to insure four autos, what premium will he
be charged by Insurance Company A?
Select one:
A. $3,200
B. $200
C. $2,400
D. $800
A. Adverse selection. - correct 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 is
known as
,Select one:
A. Adverse selection.
B. Policyholders' surplus.
C. Unprofitable business.
D. Capacity.
A. Draft a manuscript form to meet the customer's needs.
- correct answer- When preprinted forms do
not provide the terms of coverage needed by a particular
insured or small group of insureds, the insurer may
Select one:
A. Draft a manuscript form to meet the customer's needs.
B. Incorporate statutes into a policy.
C. Ask the customer to resubmit an application.
D. Work with an advisory organization to develop a form.
A. Easily converted to cash. - correct answer-
Admitted assets are types of property that regulators
allow insurers to show as assets on their financial
statements because they are
,Select one:
A. Easily converted to cash.
B. Generally increasing in value.
C. Very stable in value.
D. Never subject to decreases in value.
A. Insuring Agreements - correct answer- The
big differences between property and liability policies are
found in their
Select one:
A. Insuring Agreements
B. Exclusions
C. Conditions
D. Definitions
A. Investments. - correct answer- Most of the
income an insurer receives is either from underwriting or
Select one:
A. Investments.
, B. Policyholders' surplus.
C. Nonadmitted assets.
D. Losses.
A. Is free to work with as many different insurers as it
wants. - correct answer- Spencer Insurance
Associates is an independent agency selling primarily
homeowners policies. This agency
Select one:
A. Is free to work with as many different insurers as it
wants.
B. Can use the policyholder expiration lists, but they are
owned by insurers.
C. Generally represents its customers rather than
insurance companies.
D. Cannot commit an insurer to write a policy, unlike a
broker, who usually can.
A. Personal property-casualty insurance policy. -
correct answer- A homeowners policy is a type
of
