AINS 102 EXAM TEST BANK QUESTIONS
WITH 100% CORRECT ANSWERS
What does PAP stand for? - Answer- personal auto policy
What Initial Contact With a Claimant Should Look Like - Answer- listen to the claimants
full story
show empathy
verify coverage
explain how details of the policy relate to the loss, including any exclusions or limitations
that could affect coverage
outline what will happen next in the investigation, what forms must be completed, and
how long the claims process will take
tell them what is required to protect property from further damage
supply the insured with any necessary paperwork, such as forms for recording personal
property losses
when necessary, make emergency advance payments to the insured for clothing, living
expenses, or food
what happens if a situation doesn't seem to fit anything covered under PAP - Answer-
one or more endorsements could customize the PAP to bridge the gap
If the policy and the endorsement contains conflicting terms, which one takes
precedence over the other? - Answer- the endorsement
PAP endorsements 2 main categories - Answer- 1. endorsements that provide coverage
additions or modifications for customers who own vehicles other than cars, cans or
pickup trucks
2. endorsements that can be added to an insureds personal auto policy (PAP) to
address specific loss exposures that wouldn't be covered by an unendorsed PAP
miscellaneous type vehicle endorsement - Answer- covers motor homes, motorcycles,
all-terrain vehicles, dune buggies, golf carts, and other vehicles with fewer than 4
wheels as well as other vehicles designed for use off public roads
snowmobile endorsement - Answer- can be added to the PAP
maximum liability
trailer/camper body coverage endorsement - Answer- another type of auto coverage
maximum liability
coverage for damage to your auto endorsement - Answer- allows owners of high value
antique cars or restored show cars to insert a stated amount of insurance in the policy
,the stated amount may be less than the appraised value of the vehicle allowing the
driver to insure it for a lower premium than would be paid based on its appraised value
Endorsements That Address Coverage Gaps - Answer- excess electronic equipment
coverage
named non-owner coverage
auto loan/lease coverage
towing and labor costs
individuals and families property loss exposures stem from ownership of 2 main
categories of property - Answer- real property (realty) and personal property
real property - Answer- land, buildings, other structures attached to the land, and
anything embedded in the land
personal property - Answer- dwelling contents (furniture), high-value property, rare or
unique property, business personal property, intangible property, motor vehicles,
trailers, watercraft, and aircraft
damaged or destroyed property can result in... - Answer- Reduction in property value—
The difference between the value of the property before the loss (pre-loss value) and
after the loss (post-loss value)
Increased expenses—Expenses in addition to normal living expenses that are
necessary because of the loss, such as the cost of renting a hotel room following a
house fire
Lost income—Loss of income that results when property is damaged or destroyed, such
as the loss of rent that can be collected on a property that is damaged by a hurricane
all risk management techniques fall into two categories - Answer- risk control
techniques and risk financing techniques
risk control techniquies - Answer- reduce the frequency and severity of a loss or make
losses more predictable
risk financing techniques - Answer- generate the funds to pay for losses and risk control
measures
risk control technique 6 categories - Answer- avoidance: stopping or not engaging in an
activity (not purchase boat)
loss prevention: reduces frequency of a particular loss (put a fence around the building)
loss reduction: reduces the severity of a loss (install burglar alarm)
separation: isolate to minimize effects of a single loss (keep some valuable items at
home, others off site in a safe)
duplication: creating backups, spares, or copies of property or information (make
copies)
, diversification: spreads loss exposures over numerous areas or projects (purchase
properties in different areas)
risk financing techniques 2 categories - Answer- retention: funds are generated or set
aside for losses that are retained by the individual or family (budget for replacement)
transfer: shifting the financial responsibility for losses onto another party (purchase an
insurance policy that transfers the risk to an insurer)
financial consequences are limited to... - Answer- the total wealth of the responsible
party
2 forms of damages awarded in a liability lawsuit - Answer- special damages
general damages
special damages - Answer- also called particular damages or out of pocket losses
can include amount spent to restore lost property, hospital and doctor bills and related
expenses for bodily injury, and loss of wages and earnings
general damages - Answer- also called direct damages or necessary damages
often presumed when special damages are proven
can include compensation for pain and suffering; future effect of disfigurement, loss of a
limb, sight, or hearing; as well as emotional distress
punitive or exemplary damages - Answer- can also be imposed, but its more common
for them to be levied against companies
these damages are meant to punish a defendant for reckless, malicious, or deceitful
acts and need not bear any relation to a party's actual damages
civil law - Answer- classification of law that protects rights and provides remedies for
breaches of duties owed to others
separate from criminal law, which deals with conduct that endangers the public welfare,
such as the crimes of murder, rape, and fraud
provides the legal foundation of insurance
tort - Answer- wrongful act or omission other than a crime or breach of contract that
invades a legally protected right
tort of negligence - Answer- when someone fails to act in a sensible manner
intentional tort - Answer- deliberate act of causing harm to someone
strict liability - Answer- inherently dangerous activities
compulsory auto insurance laws - Answer- to insure that at fault victims have a way to
compensate other victims
