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Free AINS Practice Questions

10 free, exam-style Associate in Insurance (AINS) practice questions with answers and explanations. No signup required. Work through them below, then take the full free AINS practice test to study every exam domain.

Question 1

A new bakery owner identifies several risks facing the business. Which of the following is BEST classified as a speculative risk and therefore generally NOT insurable?

  1. Fire damaging the bakery's commercial oven and surrounding equipment
  2. A customer slipping on a wet floor and suffering bodily injury
  3. Investing the bakery's reserve funds in cryptocurrency
  4. Spoilage of perishable inventory due to a refrigeration failure
Show answer & explanation

Correct answer: C - Investing the bakery's reserve funds in cryptocurrency

Question 2

An insurance company reports the following financial figures for the year: incurred losses of $600,000; earned premiums of $1,000,000; underwriting expenses of $300,000; and written premiums of $1,200,000. What is the company's combined ratio, and what does it indicate?

  1. 75% - the insurer experienced an underwriting loss
  2. 85% - the insurer experienced an underwriting profit
  3. 90% - the insurer broke even on underwriting
  4. 115% - the insurer experienced an underwriting loss
Show answer & explanation

Correct answer: B - 85% - the insurer experienced an underwriting profit

Question 3

All of the following are typical activities of a corporate (staff) underwriter EXCEPT:

  1. Researching new markets and product opportunities
  2. Formulating underwriting guidelines and coverage forms
  3. Processing policy endorsements and quotations for an individual producer's accounts
  4. Arranging treaty reinsurance for the line of business
Show answer & explanation

Correct answer: C - Processing policy endorsements and quotations for an individual producer's accounts

Question 4

A homeowner's insurer pays a $50,000 fire claim. The insurer's investigation reveals that the fire originated from a neighbor's negligently maintained electrical panel. The insurer then pursues recovery from the neighbor. What is the PRIMARY purpose of the insurer's right of subrogation in this situation?

  1. To punish the negligent neighbor and deter future negligence
  2. To uphold the principle of indemnity by preventing the insured from recovering more than the actual loss
  3. To allow the insurer to reduce the insured's future deductibles
  4. To increase the insurer's profit margin on the insured's policy
Show answer & explanation

Correct answer: B - To uphold the principle of indemnity by preventing the insured from recovering more than the actual loss

Question 5

Joe and Kitty Clements' 19-year-old granddaughter Katherine has lived with them for the past two years while she attends the local community college. Joe and Kitty list only themselves as named insureds on their Personal Auto Policy. Under the standard ISO PAP, Katherine is BEST classified as:

  1. A guest of the named insureds, not covered while driving Joe and Kitty's auto
  2. A 'family member' because she is related by blood and is a resident of the household
  3. An additional named insured who must be specifically listed on the Declarations to receive coverage
  4. A non-relative resident who is covered only if a Resident Driver endorsement is added
Show answer & explanation

Correct answer: B - A 'family member' because she is related by blood and is a resident of the household

Question 6

A homeowner with an unendorsed ISO HO 00 03 (Special Form, 2022 edition) suffers a burglary in which two firearms with a documented value of $5,000 are stolen. The homeowner has not scheduled the firearms on a Personal Articles Floater or any endorsement. The maximum the policy will pay for the theft of the firearms is:

  1. $1,500
  2. $2,500
  3. $3,000
  4. $5,000
Show answer & explanation

Correct answer: C - $3,000

Question 7

A Florida homeowner watches a tropical storm strengthen offshore and, for the first time, decides to purchase a National Flood Insurance Program (NFIP) policy. She completes the application and pays the full premium five days before the storm makes landfall. When the storm causes flood damage to her home, what coverage is available under her new NFIP policy?

  1. Full coverage, since the policy was paid in full before the loss occurred
  2. Coverage on a pro-rata basis reflecting the portion of the 30-day waiting period elapsed
  3. No coverage, because the standard NFIP 30-day waiting period has not been satisfied
  4. Coverage for personal property only, with the dwelling subject to the waiting period
Show answer & explanation

Correct answer: C - No coverage, because the standard NFIP 30-day waiting period has not been satisfied

Question 8

A painting contractor is hired to paint the exterior walls of a customer's office building. While an employee is painting the east wall, paint spills and causes two distinct damages: (1) the east wall itself becomes streaked and must be stripped and repainted, and (2) the customer's landscaping shrubs growing immediately next to the wall are damaged by the spilled paint. Under the contractor's standard CGL policy, Coverage A (Bodily Injury and Property Damage Liability) applies to:

  1. Both the damage to the wall and the damage to the shrubs
  2. The damage to the wall only
  3. The damage to the shrubs only
  4. Neither, because both are excluded under the property damage exclusions
Show answer & explanation

Correct answer: C - The damage to the shrubs only

Question 9

A growing logistics company wants the broadest possible commercial auto liability coverage. The company needs coverage for: (1) the vehicles it owns, (2) trucks it rents short-term from a leasing firm for peak-season jobs, and (3) employees' personal vehicles used occasionally for company errands. Which single Business Auto Coverage Form covered auto designation symbol provides the BROADEST coverage to address all three needs?

  1. Symbol 2 - Owned 'Autos' Only
  2. Symbol 7 - Specifically Described 'Autos'
  3. Symbol 1 - Any 'Auto'
  4. Symbols 8 and 9 - Hired 'Autos' Only combined with Nonowned 'Autos' Only
Show answer & explanation

Correct answer: C - Symbol 1 - Any 'Auto'

Question 10

Mr. Cooper operates a 2,800-square-foot café that has historically served breakfast and lunch and has been written on a Businessowners Policy (BOP) for several years. He recently added a full cocktail bar and is now staying open for evening service. His agent reviews the policy. Under typical BOP eligibility rules, the addition of the cocktail bar:

  1. Has no effect on BOP eligibility because the café still meets the size and sales eligibility limits
  2. Makes the operation ineligible for the BOP, because restaurants with cocktail lounges or full bars are typically excluded from BOP eligibility
  3. Requires only the addition of liquor liability coverage by endorsement, with no impact on BOP eligibility
  4. Reduces the available liability limits under the BOP but does not affect overall eligibility
Show answer & explanation

Correct answer: B - Makes the operation ineligible for the BOP, because restaurants with cocktail lounges or full bars are typically excluded from BOP eligibility

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