Lisa A. Gardner, Ph.D., CPCU, AIC, AIDA, API,
is the Associate Director, Content and Research, at the Risk & Insurance Education Alliance.
Are you studying for an insurance or risk management exam and looking for ways to supplement classroom learning and study materials? Artificial intelligence (AI) can help.
To demonstrate a few ways that AI can assist in studying, I wrote five different prompts and “asked” the Risk & Insurance Education Alliances, AI tool, AlliBot for some answers. Each prompt asked AlliBot to do something different, generating different results. The first prompt asked AlliBot to create an essay question and answer that requires recalling facts. In response to the second prompt, AlliBot generated a multiple-choice question (also focusing on recalling facts), an answer, and an explanation about why the answer was correct. The third prompt posed a scenario that required a simple calculation and recall of coverages and exclusions to answer; AlliBot provided answers along with an explanation. The fourth prompt asked AlliBot to compare and contrast two things and the fifth prompt asked for an explanation in non-insurance terms, something that might be helpful for someone who is not-so-familiar with insurance. Below are the prompts and results.
Prompt 1:
Generate one question and answer about Part A of the Personal Auto Policy.
Question: What is the primary function of Part A in the Personal Auto Policy and what are the limitations regarding its coverage areas?
Answer: Part A of the Personal Auto Policy primarily covers Liability Coverage. This part is crucial as it pays for bodily injury and property damage that the policyholder is legally responsible for causing to others. The coverage typically includes legal defense if the insured is sued because of a vehicle accident. However, the coverage is subject to the limits chosen by the insured and does not cover injury to the insured or damage to the insured vehicle. It also has geographical limitations, generally covering incidents within the United States, its territories, Canada, and sometimes includes Puerto Rico, but does not typically extend to other international scenarios without additional provisions.
Prompt 2:
Write and answer a multiple-choice question about the risk management process.
Question: Which step in the risk management process involves determining the potential frequency and severity of losses?
A. Risk Identification
B. Risk Analysis
C. Risk Control
D. Risk Financing
Correct Answer: B. Risk Analysis
Explanation: Risk Analysis is the correct answer because this step in the risk management process specifically involves analyzing the identified risks to understand their potential impact on the organization. This includes assessing the frequency (how often risks might occur) and the severity (the extent of damage or loss risks might cause) of potential risks. This analysis helps in prioritizing risks and preparing effective strategies to mitigate them, making it a critical component of the risk management process.
Prompt 3:
Suppose that your brand-new laptop, worth $2,000, is stolen from your car. Your Renter’s Insurance deductible for personal property claims is $250. How much will you likely recover from your Renter’s Insurance claim? Would this claim be covered under your Personal Auto Policy?
If a brand-new laptop worth $2,000 is stolen from your car, and you have renter’s insurance with a deductible of $250 for personal property claims, you would likely recover $1,750 from your renter’s insurance claim. This calculation is based on the total value of the laptop minus your deductible amount. It’s important to check your specific policy details, as coverage can vary, but generally, renter’s insurance covers personal belongings against theft, including items stolen from your car.
Regarding coverage under your personal auto policy, it’s unlikely that the theft of a laptop would be covered. Personal auto policies typically cover damage to the vehicle itself and liability for damage or injuries caused by the vehicle, not personal property stolen from the vehicle. For theft of personal items from a car, you would usually rely on homeowner’s or renter’s insurance. Therefore, in this scenario, you would not expect to receive a payout for the stolen laptop under your personal auto policy.
Prompt 4:
Compare and contrast self-insurance with insurance for Workers’ Compensation risks.
Self-insurance and purchasing insurance from an external provider are two different approaches to managing workers’ compensation risks, each with its own set of benefits and challenges.
Self-insurance involves a company setting aside a specific pool of funds to cover potential workers’ compensation claims. This method grants a company greater control over its claims management and loss prevention strategies, potentially leading to significant cost savings if managed effectively. Companies that opt for self-insurance must be financially stable enough to cover claims as they arise, and they must comply with state regulations, which often include requirements for proving financial stability and the ability to manage claims. This approach is often adopted by larger organizations that are capable of bearing the financial risk associated with self-insuring.
On the other hand, purchasing workers’ compensation insurance from an external provider offloads the risk to an insurance company. This method is simpler administratively and provides predictability in costs, as premiums are typically set in advance. Smaller companies or those not wanting to assume the risk of large claims may find this option more appealing. The insurance company handles claims processing and payments, reducing the administrative burden on the employer but at the cost of less control over how claims are managed.
Each method has its strategic advantages, and the choice between self-insurance and purchasing insurance will depend on the specific financial, administrative, and risk tolerance circumstances of the business.
Prompt 5:
Explain Health Insurance to me in non-insurance terms.
Health insurance is like a safety net that helps you pay for medical services when you need them. Imagine you have a jar where you and sometimes your employer, if you have a job that offers this benefit, put a little money regularly, every month. This money goes to a company that promises to help pay for your doctor visits, medications, and any treatments you might need if you get sick or hurt.
In exchange for keeping some money in that jar, this company helps cover the costs when your medical bills are high, which can be a relief because healthcare can be very expensive. Just like a library card lets you borrow books instead of buying them, health insurance allows you to access medical services that might be out of reach if you had to pay for everything on your own all at once.
However, it’s not all free; there’s a small amount you need to pay when you actually go to see the doctor or get a prescription. This is similar to a membership fee or a service charge. And if you choose to go to a doctor that agrees with your insurance company’s terms (often called ‘in-network’), it usually costs you less money than going to other doctors who may not have this agreement (‘out-of-network’). This way, health insurance helps make healthcare more manageable and prevents unexpected medical costs from overwhelming you financially.
These five prompts show a few of the many ways in which AI tools like AlliBot can support learning. One of the best ways to figure out how AI can help you is to start using it and then observe which prompts generate the best results for you. Here are a few tips to help you get started:
- Writing a good prompt is a key to the successful use of AI. Each word counts, and if you do not like the response because, say, it is too general, then write another prompt that asks something more specific.
- Customize answers by “feeding” (i.e. entering into Alli’s “Ask Alli” window) content from slides and notes and then ask Alli to create learning assessments like true/false, multiple-choice, and essay questions and answers using that information.
- Ask Alli to respond to a prompt and then compare Alli’s response to your notes or textbook; this helps you evaluate content. If errors do occur (no AI tool is perfect), you can catch them.
Those who work with insurance and risk management know the importance of life-long learning. Artificial intelligence can help make that learning more effective, helping you to achieve your career goals.
If you would like more information about AlliBot, please visit the Risk & Insurance Education Alliance’s website at: Risk & Insurance Education Alliance. Good luck with your studying!
AI Use Disclosure: All responses to prompts were generated by AlliBot 2.0.
Bibliography: Responses to Five Prompts About Insurance and Risk Management. AlliBot 2.0, Risk & Insurance Education Alliance, 30 April 2025.
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