AINS 101 EXAM QUESTIONS WITH ALL CORRECT ANSWERS
Sports, Inc. is looking to obtain a commercial property policy on its building for $400,000. If their insurer decides to charge them a rate of $0.50 per $100 of building insurance, what premium must Sports, Inc. pay?
Select one:
A. $1,000
B. $...
AINS 101 EXAM QUESTIONS WITH
ALL CORRECT ANSWERS
Sports, Inc. is looking to obtain a commercial property policy on its building for
$400,000. If their insurer decides to charge them a rate of $0.50 per $100 of building
insurance, what premium must Sports, Inc. pay?
Select one:
A. $1,000
B. $2,000
C. $4,000
D. $8,000 - Answer ✔ B. $2,000
Erin has recently graduated from college and relocated to Chicago. She has purchased
a car and rented an apartment and now needs to purchase insurance. She is
comfortable buying from social media recommendations and recently was impressed
with an insurer sending her coverage details online with a minimum of forms and
salesperson interactions. Which one of the following is likely the best distribution
channel to meet Erin's needs?
Select one:
A. Group marketing
B. Financial institution
C. Call center
D. Direct response - Answer ✔ D. Direct response
Rachel is considering investing in the stock of an insurance company. Which one of the
following is likely to provide the best indication of the insurer's financial position at this
point in time?
Select one:
A. Cash flow report
B. Sales report
C. Income statement
D. Balance sheet - Answer ✔ D. Balance sheet
Destructive competition in the insurance industry could result in
Select one:
A. Insurance shortages.
B. Oversupply of insurance.
C. Excess regulation.
, D. Inadequate regulation. - Answer ✔ A. Insurance shortages.
Jennie recently purchased a personal auto policy from Westcox Insurers. Three weeks
later, Jennie reported her car was stolen from her driveway during the middle of the day.
Upon further investigation, claims representative Harry finds out the home address he
has on file for Jennie does not match the location where the theft occurred. In light of
this scenario, which one of the following would be particularly helpful for Harry to pursue
concerning Jenny's claim?
Select one:
A. Harry can review any relevant statutory terms mentioned in the policy that would
apply to Jennie's particular type of claim.
B. Since Jennie purchased a modular policy, Harry will need to spend extra time
reviewing the length and complexity of her contract.
C. As Westcox is a mutual insurer owned by its policyholders, Harry will find it especially
helpful to review the insured's associated rights and duties.
D. Harry can verify Jennie's address - Answer ✔ D. Harry can verify Jennie's address
and other possible helpful information by reviewing her policy which has her original
application information attached.
Windsor Insurance has sold more personal auto policies in the recent quarter than ever
before in its history, thanks to new commission incentives for ambitious staff members.
Even though Windsor is collecting more money upfront, it is actually making less per
policy after remitting the higher commissions. Some claim payments are also now being
delayed, resulting in many complaints against the company. Which one of the following
objectives of insurance regulation is not being realized through this scenario?
Select one:
A. Maintaining insurer solvency
B. Safeguarding policy language
C. Restricting cancellations or renewals
D. Preventing destructive competition - Answer ✔ A. Maintaining insurer solvency
Why are insurance regulators concerned about the effects of large catastrophes?
Select one:
A. They could lead to destructive competition.
B. Insurers may become insolvent.
C. Insurance rates will rise.
D. Licensed insurers will be unable to handle demand. - Answer ✔ B. Insurers may
become insolvent.
For a loss exposure to be ideally insurable it must be definite in
Select one:
A. Scope, origin, and coverage.
B. Duration, damage, and cost.
C. Time, cause, and location.
D. Value, extent, and consequences. - Answer ✔ C. Time, cause, and location.
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