AINS 102 (Latest 2023/ 2024 Update) Understanding
Personal Insurance Exam Prep| Questions and Verified
Answers| 100% Correct
Which one of the following statements regarding assets exposed to loss is true?
A. Real property includes only tangible property.
B. Earthquake damage to a swimming pool is an example of a personal property loss exposure.
C. Personal property includes only tangible property.
D. Hail damage to a motor vehicle is an example of a real property loss exposure. - (answers)A. Real
property includes only tangible property.
When property is damaged, individuals sustain certain financial consequences as a result of the damage.
These consequences can include:
A. Increased premiums.
B. Increased expenses.
C. Coverage termination.
D. Policy endorsements. - (answers)B. Increased expenses
All of the following could lead to a liability loss for a family, EXCEPT:
A. A guest slips on an icy sidewalk in front of the family's home and breaks his leg.
B. The father trips on a broom he left lying in the driveway and breaks his arm.
C. The daughter, who is 16 years old, sideswipes a neighbor's car and dents its fender while driving her
own car.
D. The son, who is 13 years old, throws a rock at a classmate who requires stitches for an injury to his
head. - (answers)A. A guest slips on an icy sidewalk in front of the family's home and breaks his leg.
Which one of the following is a form of compensatory damages?
,Select one:
A. Punitive damages
B. Special damages
C. Exemplary damages
D. Real damages - (answers)B. Special damages
Which one of the following statements is true regarding automobile insurance rating?
Select one:
A. State regulators require that all insurers offer discounts on auto rates for passive restraints.
B. Most insurers base automobile rates on primary rating factors and do not consider any other factors
in establishing rates.
C. State regulators require that rates be adequate, reasonable, and not unfairly discriminatory.
D. Drivers with lower-than-average loss exposure are charged higher rates. - (answers)C. State
regulators require that rates be adequate, reasonable, and not unfairly discriminatory.
States A, B, C, and D have addressed the problem of compensating auto accident victims differently.
Which one of the following most accurately describes the way that states are handling this issue?
Select one:
A. State A, unlike most states, has enacted a compulsory auto insurance law, requiring motorists to
provide proof they have some means to pay for auto accident damages.
B. State C, a no-fault state, has enacted auto insurance covering accident victims on a first-party basis,
usually applying both to bodily injury and to property damage.
C. State D, a no-fault state, has enacted auto insurance covering accident victims on a first-party basis,
usually applying to bodily injury and not to property damage.
D. State B has enacted a financial responsibility law that requires auto owners to carry auto liability
insurance at least equal to certain minimum limits. - (answers)C. State D, a no-fault state, has enacted
auto insurance covering accident victims on a first-party basis, usually applying to bodily injury and not
to property damage.
,Estelle and Richie are very conservative and want to purchase insurance to "cover everything" in order
to lessen the worries of home ownership. Which one of the following ISO forms will provide them
dwelling and personal property insurance with the broadest possible coverage?
Select one:
A. HO-2 Broad Form
B. HO-3 Special Form
C. HO-5 Comprehensive Form
D. HO-8 Modified Form - (answers)C. HO-5 Comprehensive Form
Rick and Jamie have chosen their first home and now are asking their insurance agent Franklin to help
advise them as to appropriate and affordable insurance coverage. Which one of the following will most
accurately reflect the best coverage choice for Rick and Jamie?
Select one:
A. As Rick and Jamie are buying and remodeling an older home, Franklin suggests an HO-8 modified
coverage form to provide appropriate coverage for a building with a comparatively high replacement
cost.
B. As Rick and Jamie are buying a residential condo, Franklin suggests the HO-3 special form as they will
be needing limited dwelling coverage.
C. As Rick and Jamie will be buying a mansion, Franklin suggests an HO-5 comprehensive form as it
provides the highest dollar amounts of any coverage available.
D. As Rick and Jamie will be renting an apartment for a few years, Franklin suggests an HO-2 broad form
as they will not need any dwelling cove - (answers)A. As Rick and Jamie are buying and remodeling an
older home, Franklin suggests an HO-8 modified coverage form to provide appropriate coverage for a
building with a comparatively high replacement cost.
John is a recent homeowner and is considering the insurance coverages he needs for his home and
contents. If damaged by a peril covered by a homeowners policy, which one of the following would be
considered part of John's real property?
Select one:
A. The desk top computer
B. The hockey net and equipment
, C. The detached garage
D. The boat in the driveway - (answers)C. The detached garage
All of the following items are examples of personal property, EXCEPT:
Select one:
A. A diamond wedding ring
B. A set of cookware
C. A fishing boat
D. A detached garage - (answers)D. A detached garage
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
Select one:
A. Necessary damages.
B. Special damages.
C. Punitive damages.
D. General damages. - (answers)C. Punitive damages.
Paul was charged with assault and battery after he punched and injured his neighbor Tom, who
repeatedly walked his dog on Paul's property. Which one of the following types of tort does this
represent?
Select one:
A. Strict liability
B. Intentional tort
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