Associate in Insurance (AINS) 103 Practice Exam

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• Using data analytics to predict liability costs across geographic areas generally leads to what outcome?
• Which statement best describes the purpose of Extra Expense coverage?
• Breach notification requirements in insurance typically apply to breaches involving which data?
• In a Building and Personal Property Coverage Form with a $275,000 limit and a $1,500 deductible, a fire causes $310,000 in covered damages. How much would the insurer pay under the BPP?
• Consequences of misrepresentation when applying for insurance?
• Which statement about occurrence and claims-made liability forms and retroactive dates is true?
• A company-owned land used for a softball game hosts a nonprofit; the nonprofit director is injured during the game. Under an unendorsed CGL, does the policy cover the director's injuries?
• Under the Commercial General Liability Coverage Form, medical payments coverage applies to which scenario?
• Which term describes the chance of loss being accidental and unexpected, reflecting the insurability concept?
• What is the role of catastrophe modeling in pricing and capital planning?
• Under a bailees' customers policy, what property is covered by the insurer?
• Karma Tea Shop has three locations with a single $300,000 limit applying to all locations, a 70 percent coinsurance provision, and is written on a Blanket basis. The arrangement is described as what?
• In many liability policies, where do defense costs count relative to the policy limits?
• Why might insureds need separate coverage for contractual liability?
• Employers liability insurance covers the employer's liability for which exposure?
• Which of the following best describes the function of endorsements in an insurance policy?
• Under Inflation Guard on Building and Personal Property Coverage Form, how does the limit adjust over time?
• In layering, what is the sequence of payment between primary and excess?
• What is the primary purpose of an 'additional insured' endorsement in a liability policy?
• Which statement about eligibility for ISO Commercial Crime Program is true for entities seeking financial institution bonds?
• What is an endorsement, and how does it differ from a policy provision?
• Which policy would typically cover a furnace explosion?
• In a commercial auto policy, which part covers uninsured/underinsured motorists?
• Which scenario demonstrates how technology is changing underwriting decisions?
• Which data analysis method is used to map the actual workflow of a process by examining event data?
• Which item is included in the building definition under BOP?
• Under Coverage A of the Commercial General Liability coverage form, property damage would include all of the following EXCEPT:
• Define proximate cause and its role in determining coverage.
• Anita wants to predict the final settlement amount for slip and falls claims that stay open for more than one year, and to understand geographic variation. Which method would help?
• What may happen if misrepresentation or concealment occurs while obtaining a policy?
• What is a practical reason for naming an additional insured on a liability policy?
• What is the primary purpose of fraud detection in the claims process?
• Under CGL Coverage C Medical Payments, medical expenses are payable only if incurred within what time frame after the accident?
• Which sequence correctly lists the five steps of the risk management process?
• Which policy provides coverage for goods or equipment while in transit between locations?
• Under the BOP, which item is typically considered part of the building rather than personal property?
• What is an inflation guard endorsement and how does it help prevent underinsurance?
• Which statement describes the potential reduction in property value after loss?
• A claim alleging personal and advertising injury arises from a brochure published before policy inception. Which exclusion would apply under Coverage B?
• Employers liability insurance covers the employer's liability for which type of injury or disease?
• Under The Malvern Company's BOP, which item would be included in the building definition?
• Grace's work-related disability scenario best fits which type of workers' compensation disability?
• What method is used to add PIP coverage to a monoline commercial auto policy?
• Which elements are commonly included in incident response planning for cyber risk?
• Which factor would make a business ineligible for BOP?
• What factor most influences premises liability exposure in a shopping mall environment?
• Which factor would make Mr. Cooper's Café ineligible for a businessowners policy (BOP)?
• A furnace explosion would typically be addressed by which policy form?
• What is a Businessowners Policy (BOP), and what coverages does it typically combine?
• Advancements in technology have made underwriting data more abundant and reliable. How has this typically changed underwriting?
• In the described incident, the auto insurer pays how much for windshield damage and dents?
• A single limit applies to multiple locations in a BIC; this arrangement is described as which basis?
• Where would you find the policy limit and deductible for a property or liability policy?
• Which data analysis method begins with data analysis of claims activity logs to identify steps taken for claims and the timing of them?
• Explain how endorsements interact with underlying commercial property and liability policies to shape coverage.
• Under the Commercial General Liability policy, personal and advertising injury liability covers offenses that arise from which of the following?
• Which exclusion is associated with post-loss costs for code upgrades under BOP?
• Which statement describes contractual liability coverage?
• In cyber coverage, what is the typical approach to regulatory notices and credit monitoring?
• Which is NOT a typical rating factor for commercial policies?
• Which of the following would be covered under the Extra Expense insuring agreement of the Business Income (and Extra Expense) Coverage Form?
• Which Part of a typical commercial auto policy specifies the insured's duties after a loss, such as notifying the insurer and protecting the loss site?
• Which of the following is NOT a characteristic of an insurable risk?
• Which statement best describes a claims-made liability policy with a retroactive date?
• Which statement best describes the scope of Coverage B (Personal and Advertising Injury) in a CGL policy?
• Which main street business would be ineligible for BOP coverage?
• With advancements in technology, underwriting data is becoming increasingly abundant and more reliable. Which of the following is an example of how technological advancements are changing underwriting?
• What are the two distinct benefits of enterprise risk management (ERM)?
• Underwriters evaluate risk using exposure units and rating factors. Which of the following is a rating factor?
• Which statement best describes the risk addressed by a motor truck cargo liability policy?
• Under Coverage C—Medical Payments of a Commercial General Liability policy, medical expenses must be incurred and reported within what time frame after the accident?
• If misrepresentation is found, what is the retroactive effect on coverage?
• Differentiate appraisal from valuation and explain when each is used in property claims.
• What is a Personal Articles Floater (PAF), and when is it typically used?
• The CGL Coverage B—Personal and Advertising Injury Liability provides coverage for which of the following?
• What is the first step in the enterprise risk management (ERM) process?
• Lawn Chemical Company applies fertilizer and weed killer. Which liability exposure is most significant?
• Which statement accurately describes eligibility for financial institution bonds in relation to the ISO Commercial Crime Program?
• Outline typical claims-handling steps from notice to settlement.
• Which statement best describes primary vs excess layering?
• What is a loss reserve, and who determines it?
• Umbrella liability insurance may cover some claims not covered by underlying liability insurance.
• Under a businessowners policy (BOP), if torrential rain causes flood damage to the building and business personal property, which statement is true?
• Which is the correct outline and general purpose of each Part in a commercial auto policy?
• Loss of freight refers to which of the following in the context of maritime transport?
• In process mining of a claims process, which data source is primarily used to analyze the flow of activities?
• What form of analysis is Ava using when evaluating past auto losses, including location and severity, to guide loss prevention resources?
• Completed operations liability covers damages arising from which scenario?
• Which section of a policy lists the insured's name, policy period, limits, and endorsements?
• Shelton Industries has two claims: a furnace explosion and an explosion of unfired pressure vessels. How are these losses covered under the policies?
• For a commercial trucking company seeking coverage for cargo during shipment, which inland marine policy is most appropriate?
• To what extent are extra expenses covered under the ISO Business Income Coverage (without Extra Expense) Form?
• How do endorsements interact with underlying commercial policies?
• Under the Business Income (and Extra Expense) Coverage Form, which item would be considered an extra expense?
• Are floods typically covered under standard homeowners policies, and how is flood risk insured?
• Which policy best covers crime losses for financial institutions?
• How do underwriters evaluate risk using exposure units and rating factors in commercial policies?
• Explain the concept of subrogation and its purpose after a claim is paid.
• What is the main data source used in the process mining of the claims process?
• Which statement about prior approval and file-and-use is true?
• Which policy covers crime loss exposures of financial institutions such as banks, savings and loan institutions, and insurance companies?
• Which statement correctly distinguishes general liability from products-completed operations liability and describes where defense costs typically fit?
• Which statement correctly describes Inflation Guard optional coverage for the Building and Personal Property Coverage Form?
• Which type of physical damage coverage under the Business Auto Coverage Form would cover damage caused by an animal damaging the interior of an insured vehicle?
• Which statement best describes the Businessowners Policy (BOP) and its coverage combination?
• Which statement about excess liability insurance and umbrella liability coverage is most accurate?
• Which describes direct vs indirect loss in property insurance?
• Which section of the coverage form would provide information about endorsements applying to a general liability policy?
• Which statement about how technology affects underwriting data is most accurate?
• Under the Workers Compensation and Employers Liability Insurance Policy, the insured is responsible to reimburse the insurer in which situation?
• Which is an advantage to insurers of nonfiled classes compared with filed classes of inland marine insurance?
• Which data analysis method would you use to discover the actual sequence of steps employees take when processing claims?
• Which of the following is an example of an exposure unit?
• List the four elements of negligence required for a successful tort claim.
• What is insurable interest?
• Which statement best describes coinsurance in property insurance and the penalty for underinsuring?
• Which cost would be excluded under BOP due to ordinance requirements?
• In a multi-policy loss scenario, anti-stacking provisions typically do what?
• What is the purpose of an umbrella (excess) liability policy?
• What is environmental impairment liability (pollution) coverage, and why might it be needed beyond standard policies?
• Differentiate the insurer's duty to defend from its duty to indemnify.
• In a typical PIP endorsement scenario, how much will the auto insurer pay of the following expenses: $4,000 lost wages, $6,000 nanny, $5,000 equipment, $30,000 medical bills?
• In property/casualty insurance, when must insurable interest exist?
• In auto physical damage coverage, which perils are typically covered under Collision and which under Comprehensive, and how do deductibles apply?
• How is the loss ratio calculated, and why is it important for pricing and profitability?
• Which statement about deductibles and premiums is accurate?
• A furnace explosion causing damage to a building is most directly covered by which policy form?
• Under a BOP, which item is considered building property?
• What does it mean when a Commercial General Liability policy is unendorsed?
• Which of the following perils are typically covered under Comprehensive in auto insurance?
• What is the purpose of a deductible, and how does it affect premium and claim payouts?
• Medical payments coverage under CGL would apply to which of the following individuals injured on the insured's premises during an activity?
• Which combination is true about rating factors used in commercial policies?
• In ERM, the first step is to scan the environment. Which description best captures this step?
• A furnace explosion would most likely be covered by which policy form?
• Under an unendorsed CGL policy, which reason might cause the insurer to refuse payment for a slip-and-fall claim?
• Which describes the purpose of exposure units in rating?
• What is the primary purpose of workers' compensation coverage and what does the exclusive remedy concept mean?
• What is the purpose of rating factors in underwriting?
• Which situation would prompt reimbursement for penalties under the workers compensation policy?
• Which statement most accurately describes umbrella liability versus underlying liability coverage?
• How do underwriters determine premium for a commercial policy?
• Ethical considerations in underwriting and claims handling include which of the following?
• How do HO-2 and HO-3 homeowners forms differ in terms of peril coverage for dwelling and contents?
• Define reinsurance and differentiate facultative and treaty reinsurance.
• Which policy form is typically associated with covering damage to a building caused by an explosion in heating equipment?
• What is the purpose of an excess or umbrella liability policy?
• Permanent partial disability, in workers' compensation terms, indicates a permanent impairment in part of the body.
• What role do data analytics play in fraud detection?
• Business income insurance, when triggered by a fire, covers which type of losses?
• Which statement about priority of payment and anti-stacking provisions is true?
• Process mining is a data analysis approach used to do what?
• What is a credit-based insurance score and common regulatory concerns in its use?
• Which of the following is an example of an indirect loss?
• The Grandfather Clock Company ships clocks by common carrier; best insurance advice? Which transit coverage would be most appropriate for a company that ships goods frequently by common carrier and wants protection against damage during shipment?
• Which laws or standards govern privacy and data security in insurance?
• In the loss ratio calculation, what does LAE stand for?
• A company uses a network of objects that transmit data to each other and to central hubs through the internet to monitor loss exposures. What is this network commonly called?
• Which statement about inflation guard endorsements is true?
• Which statement best matches the four risk management techniques with practical examples?
• What is catastrophe modeling and how is it used?
• Distinguish hazard, risk, and peril with brief definitions and examples.
• In a primary vs excess layering arrangement, which statement is correct?
• Which is an example of intangible property exposed to theft resulting from a cyber attack?
• Which policy section outlines the duties and policy provisions?
• Danforth Grocery Store experiences congestion in the rear parking area and has a high slip-and-fall claim rate. The store is most exposed to which type of liability?
• What is the purpose of using excess coverage in layering?
• Which risk management decision involves transferring risk by purchasing insurance?
• Which of the following is an example of a peril?
• What scenario is covered by business interruption overlap with civil authority coverage?
• Which reason would the CGL insurer use for denying Austin's Coverage C claim?
• Which statement best describes how insurers respond to a cyber incident with regard to confidentiality, data breach, and notice obligations?
• What is a Personal Articles Floater (PAF), and when is it typically used?
• To predict final settlement amounts for bodily injury claims open over two years based on store area and location, which analytics method should be used?
• Which of the following would be insured under the liability coverage of a partnership's businessowners policy (BOP) EXCEPT?
• Under BOP, which statement about Ordinance or Law exclusion is accurate?
• Explain rate-making basics: what are rates, classes, and how experience rating can influence premiums.
• Which statement compares replacement cost and actual cash value (ACV) valuations in property claims?
• Which statement about the BOP is true?
• Why would an insured use primary and excess layering?
• In a standard BOP, flood damage to insured property is typically excluded.
• Which policy would cover the costs to relocate to a temporary facility after a covered loss?
• Identify the three major policy sections: insuring agreement, conditions, and exclusions—give a brief purpose for each.
• Which is a valid example of an exposure unit for rating?
• Under the bailees' customers policy, when a customer's property is damaged in the custodian's care due to unrelated party negligence, how is the claim handled?
• Which statement about the BOP is true?
• Injury arising out of which offense could be covered under Coverage B of the Commercial General Liability policy?
• What is the relationship between regulators' oversight and ethical considerations in underwriting and claims handling?
• In a Commercial General Liability policy, which exclusion would apply to a copyright infringement claim arising from a video advertisement?
• Medical expense coverage under Business Section II-Liability Coverage of the ISO BOP would cover small and reasonable medical claims for which group?
• In order for a loss to be covered under the Business Income coverage, which of the following must also be true?
• Which statement best describes what a typical businessowners policy covers for a small business?
• Facing a multi-million dollar project, which action should Joshua take to address the possibility of losses exceeding primary limits?
• Under HO-3, which form typically provides dwelling coverage on open perils?