AINS 101 EXAM QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)
AGRADE 2024 ACTUAL EXAM
Which one of these is most directly associated with a
... [Show More] satisfied customer? - ANS-Leads
and referrals that can be used to generate new business
The two main sectors of the insurance industry are - ANS-Property-casualty insurance
and life-health insurance.
Joe and Helene are married with two teenage children and two dogs. They own three
cars and a large house with a swimming pool in the back yard. Their insurance agent
advised them that the pool, teenage drivers, and dogs put them at risk for large liability
losses. Which one of the following personal property-casualty insurance policies would
provide them with protection for their high potential for large liability losses? - ANSPersonal Umbrella
Because the insurance company usually determines policy wording and the insured has
little choice but to "take it or leave it, an insurance contract is a - ANS-Contract of
adhesion
Which two of the four quadrants of risk are classified as pure risk? - ANS-Hazard risks
and operational risks
At Greenfield Insurance Company, Bernadette and Rachel are corporate underwriters,
and Tomas and Jose are field underwriters. All of the following are underwriting
activities typically performed by corporate (or staff) underwriters like Bernadette and
Rachel, EXCEPT: - ANS-Support producers and insureds
The processing of almost every claim involves which one of the following activities? -
ANS-Determining the amount of damages or extent of loss
The financial report for Hometown Insurer contains the following information:
Earned premiums$4,000,000
Written premiums$5,000,000
Net investment income$1,000,000
Incurred losses$3,000,000
Incurred underwriting expenses$2,000,000
What is Hometown Insurer's loss ratio? - ANS-75% (3,000,000/4,000,000)
Earned premiums are shown on an insurer's income statement because they are - ANSRevenues
Why are insurance regulators concerned about the effects of large catastrophes? -
ANS-Insurers may become insolvent.
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
Risk control can assist the claims department by - ANS-Providing laboratory analyses.
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? - ANS-$2,000
Which one of the following is the correct formula for calculating an insurer's combined
ratio? - ANS-Loss ratio + expense ratio
Maria is a new producer who wears many hats when forming relationships and then
serving her established customers. In this capacity, which one of the following scenarios
most accurately describes her ongoing work wearing the hat of "claims handler"? -
ANS-Veronica directly contacts Maria for guidance on how to report a stolen car, Maria
provides that, and claims rep Sean takes over after an introduction from Maria.
Riley Turner is performing a comprehensive evaluation of Hardwick Enterprises to make
sure its insurance and risk management efforts are serving the organization
appropriately. Which one of the following will be true in regard to this effort? - ANSBesides risk management goals being attainable, they should also pose a challenge.
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. Erin is looking for
minimum coverages and the lowest price available. Which one of the following is likely
the best distribution system to meet Erin's needs? - ANS-Direct response
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? - ANS-Harry can verify Jennie's address and other possible
helpful information by reviewing her policy which has her original application information
attached.
If an insured wants to receive "new for old" in the event of a property loss, he or she
would purchase: - ANS-Replacement cost
James West is a claims rep with Hatters Insurance. As he learns how to handle a claim
from start to finish, which one of the following best describes the correct order for him [Show Less]