Associate in Claims
(AIC) Exam Questions
And Correct Answers
(Verified Answers)
Plus Rationales
2025/2026 Q&A |
Instant Download Pdf
1. What is the primary purpose of insurance claims
handling?
A. Maximize insurer profits
B. Provide fair indemnification to policyholders
C. Reduce policyholder coverage
D. Increase premiums
Answer: B
Claims handling exists to restore the insured as closely as
possible to their pre-loss condition, within policy limits.
,2. Which principle states that an insured cannot profit from
a loss?
A. Utmost good faith
B. Subrogation
C. Indemnity
D. Contribution
Answer: C
Indemnity ensures compensation equals the actual loss, not a
profit.
3. What is subrogation?
A. Transfer of policy ownership
B. Insurer’s right to recover from a third party after
payment
C. Policy cancellation
D. Loss adjustment expense
Answer: B
Subrogation allows insurers to pursue recovery from
responsible third parties.
4. Which document initiates the claims process?
A. Proof of loss
B. First Notice of Loss (FNOL)
C. Claim settlement letter
D. Appraisal report
,Answer: B
FNOL is the initial report of an incident to the insurer.
5. What is “moral hazard”?
A. Natural disaster risk
B. Dishonest behavior increasing loss likelihood
C. Policy exclusions
D. Reinsurance risk
Answer: B
Moral hazard occurs when insureds act less carefully because
they have coverage.
6. Which coverage pays regardless of fault in auto
insurance?
A. Liability
B. Collision
C. Personal Injury Protection (PIP)
D. Property damage
Answer: C
PIP covers medical expenses regardless of fault.
7. What is an adjuster’s primary role?
A. Sell policies
B. Underwrite risks
, C. Investigate and settle claims
D. Set premiums
Answer: C
Adjusters evaluate losses and determine fair settlement
amounts.
8. What does “proximate cause” refer to?
A. Remote cause
B. Insured cause only
C. Direct, efficient cause of loss
D. Excluded cause
Answer: C
It is the primary cause that sets others in motion.
9. Which is NOT part of a standard liability claim
investigation?
A. Interview witnesses
B. Review policy
C. Increase policy limits
D. Inspect damage
Answer: C
Policy limits are not changed during claims investigation.
10. What is “loss adjustment expense”?
(AIC) Exam Questions
And Correct Answers
(Verified Answers)
Plus Rationales
2025/2026 Q&A |
Instant Download Pdf
1. What is the primary purpose of insurance claims
handling?
A. Maximize insurer profits
B. Provide fair indemnification to policyholders
C. Reduce policyholder coverage
D. Increase premiums
Answer: B
Claims handling exists to restore the insured as closely as
possible to their pre-loss condition, within policy limits.
,2. Which principle states that an insured cannot profit from
a loss?
A. Utmost good faith
B. Subrogation
C. Indemnity
D. Contribution
Answer: C
Indemnity ensures compensation equals the actual loss, not a
profit.
3. What is subrogation?
A. Transfer of policy ownership
B. Insurer’s right to recover from a third party after
payment
C. Policy cancellation
D. Loss adjustment expense
Answer: B
Subrogation allows insurers to pursue recovery from
responsible third parties.
4. Which document initiates the claims process?
A. Proof of loss
B. First Notice of Loss (FNOL)
C. Claim settlement letter
D. Appraisal report
,Answer: B
FNOL is the initial report of an incident to the insurer.
5. What is “moral hazard”?
A. Natural disaster risk
B. Dishonest behavior increasing loss likelihood
C. Policy exclusions
D. Reinsurance risk
Answer: B
Moral hazard occurs when insureds act less carefully because
they have coverage.
6. Which coverage pays regardless of fault in auto
insurance?
A. Liability
B. Collision
C. Personal Injury Protection (PIP)
D. Property damage
Answer: C
PIP covers medical expenses regardless of fault.
7. What is an adjuster’s primary role?
A. Sell policies
B. Underwrite risks
, C. Investigate and settle claims
D. Set premiums
Answer: C
Adjusters evaluate losses and determine fair settlement
amounts.
8. What does “proximate cause” refer to?
A. Remote cause
B. Insured cause only
C. Direct, efficient cause of loss
D. Excluded cause
Answer: C
It is the primary cause that sets others in motion.
9. Which is NOT part of a standard liability claim
investigation?
A. Interview witnesses
B. Review policy
C. Increase policy limits
D. Inspect damage
Answer: C
Policy limits are not changed during claims investigation.
10. What is “loss adjustment expense”?
