2025 ains 101 exam Study guides, Class notes & Summaries

Actual cash value (ACV) ️ The cost to replace property with new property of like kind and quality less depreciation. Adverse selection ️ Insuring individuals with a high probability of loss at a cost lower than the insurer would normally charge for that risk because it wasn't aware of the actual risk involved. Binder ️ A temporary written or oral agreement to provide insurance coverage until a formal written policy is issued. Book of business ️ A group of policies with a common c...

Loss exposure ️ any condition or situation that presents a possibility of loss, whether or not an actual loss occurs Premium ️ the price of the insurance coverage provided for a specified period Indemnify ️ to restore a party who has sustained a loss to the same financial position that party held before the loss occurred Insured ️ any person or organization who is insured under an insurance policy Property-casualty insurance ️ one of the two main sectors of the insurance indus...

Bill is an insurance producer for and employed by ABC Insurance Company (ABC). He represents only ABC when marketing insurance products, and uses an administrative staff also employed by ABC. Bill is a producer in the ️ Direct writer marketing system 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 ️ Contract of adhesion Which one of the following best explains why producers sho...

As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance. However, her friend Mehmet tells her not to skimp on insurance, because it will help manage her cash flows. Which one of the following examples best illustrates Mehmet's point? A. Ciara needs her car to get to her job, and she needs her job to make car payments and pay for her car insurance. B. When her car's windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing it. C. When her ...

Exclusive agency is contracted to sell insurance for one insurer or group of insurers ️ The difference between an independent agency and an exclusive agency is that an Insurance shortages ️ Destructive competition in the insurance industry could result in 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 ️ Maria is a new producer who wears many hats when forming relations...

AINS 101 Exam Question with 100 % correct answers | Verified 2024/2025 Risk - answerUncertainty about an outcome, positive or negative Pooling - answerAll insureds share costs of each others losses. All put money into a fund that is used to pay losses as they occur. Helps keep the premium affordable Helps cover large losses Benefits of Insurance - answer- Pay for losses - Manage cash flow uncertainty - Comply with legal requirements - Promote risk control activity - Efficient use of i...

AINS 101 Exam Question with 100 % correct answers | Verified 2024/2025 Which one of the following statements is correct regarding the benefits provided by insurance? A. Insurance reduces the financial consequences of loss exposures but not the related uncertainty. B. The reduction in losses paid by insurers due to risk control measures benefits individual insureds but not society as a whole. C. Insurance helps reduce the financial burden to society by compensating accident victims. D. Th...

AINS 101 Exam Question with 100 % correct answers | Verified 2024/2025 What is loss exposure? Any condition or situation that presents a possibility of loss, regardless of whether that loss actually occurs. What is risk? Uncertainty of outcomes, which can be positive or negative. What is pooling? All insureds share the costs of each other's loss. How does insurance pay for losses? Insurance indemnifies (restores to pre-loss status) individuals and organizations for covered losses. H...

AINS 101 Exam Question with 100 % correct answers | Verified 2024/2025 Risk - answerUncertainty about an outcome, positive or negative Pooling - answerAll insureds share costs of each others losses. All put money into a fund that is used to pay losses as they occur. Helps keep the premium affordable Helps cover large losses Benefits of Insurance - answer- Pay for losses - Manage cash flow uncertainty - Comply with legal requirements - Promote risk control activity - Efficient use of i...

AINS 101 Exam Question with 100 % correct answers | Verified 2024/2025 What is loss exposure? Any condition or situation that presents a possibility of loss, regardless of whether that loss actually occurs. What is risk? Uncertainty of outcomes, which can be positive or negative. What is pooling? All insureds share the costs of each other's loss. How does insurance pay for losses? Insurance indemnifies (restores to pre-loss status) individuals and organizations for covered losses. H...