AINS 102 EXAM UNDERSTANDING PERSONAL

Page 1 of 103

1

AINS 102 EXAM (UNDERSTANDING PERSONAL

INSURANCE EXAM ) ACTUAL EXAM 400+

QUESTIONS AND CORRECT ANSWERS

(VERIFIED ANSWERS)

RATED

Alicia's house is insured under a HO-3 policy. When a fire damaged her garage, the claims representative told her that it would be covered under Coverage B—Other Structures. Under the HO-3 policy, Coverage B—Other Structures applies to structures

Select one:

• On the residence premises that are not attached to the dwelling and are separated from the

dwelling by clear space.

• Not on the residence premises but owned by the insured.
• On the residence premises and more than 100 feet from the dwelling.
• On the residence premises and attached to the residence premises by permanent structures.
• ANSWER>>A. On the residence premises that are not attached to the dwelling and are

separated from the dwelling by clear space.

he HO-3 policy Coverage D provides coverage for 1 / 4

Page 2 of 103

2

Select one:

• The dwelling.
• Loss of Use.
• Other Structures.
• Personal property. - ANSWER>>B. Loss of Use.

Sammy and Sally Oshua insure their home with an HO-3 policy. They own a cocker spaniel puppy. While a neighboring couple and their five-year-old daughter were visiting, the puppy bit the girl as she was playing with it. The child suffered a serious wound and the neighbors sued the Oshuas. Which one of the following statements is true?

Select one:

• Defense costs are not covered for the Oshuas if the lawsuit is found to be groundless.
• In addition to paying up to the limit of liability, the insurer will pay defense costs associated

with the lawsuit.

• Because the child is a minor, the insurer will pay the damages regardless of legal liability.
• Because the dog was on the Oshuas' property, they are not covered for injury to the child. -

ANSWER>>B. In addition to paying up to the limit of liability, the insurer will pay defense costs associated with the lawsuit.

Under Coverage E—Personal Liability of the HO-3 policy, the insurer's obligation to defend ends 2 / 4

Page 3 of 103

3

Select one:

• When policy limits are exhausted by the claim expenses.
• When the cost of defense exceeds the personal liability limits.
• When the liability limit for the occurrence is exhausted by payment of a settlement or

judgment.

• When the costs of defense limits are exhausted. - ANSWER>>C. When the liability limit for

the occurrence is exhausted by payment of a settlement or judgment.

Coverage F—Medical Payments to Others in the homeowners policy applies to bodily injury to a

residence employee in all of the following situations, EXCEPT:

Select one:

• The residence employee is away from the insured location but is working
• The residence employee is on the insured location but is not working
• The residence employee is on the insured location and is working
• The residence employee is away from the insured location and is not working - ANSWER>>D.

The residence employee is away from the insured location and is not working

The medical payments coverage in a homeowners policy covers certain medical expenses incurred by

Select one: 3 / 4

Page 4 of 103

4

• Regular household residents other than residence employees.
• Insureds.
• Nonresidents of the insured's household.
• A person uninvited to the insured's home. - ANSWER>>C. Nonresidents of the insured's

household.

Sota owns and lives in a house insured under an unendorsed Dwelling Property 3—Special Form (DP-3) with a Coverage A—Dwelling limit of $200,000. Burglars caused $2,500 in damage to Sota's front door while breaking in, and stole $12,000 worth of personal property. Sota made a claim for $14,500. How much of this loss, if any, will be covered by Sota's DP-3 policy?

Select one:

• Nothing
• $2,500, less any applicable deductible
• $12,000, less any applicable deductible
• $14,500, less any applicable deductible - ANSWER>>B. $2,500, less any applicable deductible

Marcus is buying insurance for his recent home purchase that will be covered by a DP-3 policy.In reading his policy, which one of the following will Marcus find is true?

Select one:

• Marcus needs to add an endorsement to the DP-3 to cover personal property damage.
• / 4