AIC 302 FINAL EXAM STUDY GUIDE
2025/2026 COMPLETE QUESTIONS
AND CORRECT DETAILED ANSWERS ||
100% GUARANTEED PASS
<RECENT VERSION>
1. First-party claim - ANSWER ✓ A demand by an insured person or
organization seeking to recover from its insurer for a loss that its insurance
policy may cover.
2. Third-party claim - ANSWER ✓ A demand against an insured by a person
or organization other than the insured or the insurer, seeking to recover
damages that may be payable by the insured's liability insurance.
3. Negligence - ANSWER ✓ The failure to exercise the degree of care that a
reasonable person in a similar situation would exercise to avoid harming
others.
4. Proximate cause - ANSWER ✓ A cause that, in a natural and continuous
sequence unbroken by any new and independent cause, produces an event
and without which the event would not have happened.
5. Dram shop act - ANSWER ✓ A statute holding establishments that serve
alcoholic beverages responsible for harm that results from serving patrons
alcohol in violation of the statute.
6. Negligent entrustment - ANSWER ✓ The act of leaving a dangerous article
with a person who the lender knows, or should know, is likely to use it in an
unreasonably risky manner.
7. Negligence per se - ANSWER ✓ An act that is considered inherently
negligent because of a violation of a law or an ordinance.
,8. Vicarious liability - ANSWER ✓ A legal responsibility that occurs when
one party is held liable for the actions of a subordinate or an associate
because of the relationship between the two parties.
9. Agent - ANSWER ✓ In the agency relationship, the party that is authorized
by the principal to act on the principal's behalf.
10.Principal - ANSWER ✓ The party in an agency relationship that authorizes
the agent to act on that party's behalf.
11.Rescue doctrine - ANSWER ✓ A legal doctrine providing that a party
causing an accident can be liable to any people involved in rescue efforts as
a result of the accident.
12.Joint and several liability - ANSWER ✓ The liability of multiple defendants
either collectively or individually for the entire amount of damages sought
by the plaintiff regardless of their relative degree of responsibility.
13.Vehicles loaned to the insured. - ANSWER ✓ Auto dealers often loan
vehicles to insureds while making repairs. The standard dealer garage policy
makes the dealer's coverage primary; however, many states make the
insured's PAP responsible for losses occurring while the insured is driving
the loaner. A few state courts treat loaners as rentals, also making the PAP
coverage primary.
14.Self-insured rental car companies - ANSWER ✓ Self-insured rental car
companies may argue that the Other Insurance provision that would make
them primary does not apply to them because they don't have "insurance" on
the vehicle. Some states that don't accept this argument reason that self-
insureds are required by law to provide at least minimum liability limits, and
others reason that self-insurance is a functional equivalent of insurance.
15.Car-sharing services - ANSWER ✓ Car-sharing services allow members to
pay a fee and have access as needed to cars that are also driven by other
members. Car-sharing services provide liability coverage, but usually only
for minimum or low limits. While this may not be a problem for a driver
, with other auto coverage, many car-sharing members do not own an auto,
potentially leaving them liable for uncovered damages.
16.Pro rata contribution - ANSWER ✓ An approach to other insurance by
which the insurers contribute to the loss payment in the proportion to which
they contribute to the total amount of coverage purchased (their limits of
liability).
17.Contribution by equal shares - ANSWER ✓ Method of sharing loss when
two or more policies apply in which each insurer pays an equal amount until
the claim is fully paid or until one insurer exhausts its limit, in which case
the other insurer pays the remainder of the claim (up to its limit).
18.Determining Total Loss - ANSWER ✓ some use a threshold for a total loss,
such as 75 or 85 percent of the vehicle's ACV. Then, if the repair costs
exceed that threshold, the vehicle is determined to be a total loss and the
claim is paid accordingly.
19.Conor is handling an auto claim involving the death of a minor child in a
state that recognizes the intrinsic value of children. Conor's proposed
settlement amount will include - ANSWER ✓ A calculated value of the
child's future services to the parents.
A calculated value of the child's future services to the parents. Intrinsic value
of children is the assumption that parents invest in children knowing that
they will provide for them when they are older
20.Cristobal has several methods available to him as he evaluates the settlement
range for his claim:
individual case method, roundtable technique, formula method, and expert
system. Which method should Cristobal use if he is dealing with a minor
soft tissue claim and wants a simple approach to achieve an early, mutually
agreeable settlement? - ANSWER ✓ Formula method involves a
mathematical formula set by actuaries to set reserves.
21.Anna injured her back in a not-at-fault auto accident and has a bodily injury
claim with the other driver's insurance company. Later, she fell and her back
injury was aggravated. Her claims representative for the first accident told
her that the aggravation of her back injury - ANSWER ✓ Was covered
because it was an unavoidable consequence of the back injury. An
, intervening problem is covered if it is an unavoidable consequence of the
first injury.
22.Some personal auto policies provide that someone could reasonably expect
to be allowed to use an insured's vehicle even if they did not ask specifically,
such as a relative visiting from out of town. This is called - ANSWER ✓
Implied permission.
Some policies provide for implied permission for the use of an insured's
auto.
23.In determining coverage for emotional injury, a claims rep must understand
applicable policy language.
Which one of the following is correct? - ANSWER ✓ The term "harm" is
potentially broader than the term "injury"
in determining coverage for emotional injury.
24.An insurance policy is often construed to be a contract of adhesion. This
means that:
a. The insured can make changes to the policy wording before the
effective date of the policy.
b. The policy is offered to insureds on a take-it-or-leave-it basis.
c. The policy cannot be assigned to another without the insurer's
consent.
d. The policy coverage follows the vehicle. - ANSWER ✓ Most policies
are contracts of adhesion, meaning that the insurer, in most cases,
offers the insurance policy to insureds on a take-it-or-leave-it basis.
25.Claims representatives should take these steps after reviewing the facts of a
claim: - ANSWER ✓ - Review and apply the relevant law
- Determine the legal obligations and defenses that apply to the
facts
- Determine what choices, if any, the claimant might have in
applying the law
- Determine what category liability falls into—clear, probable,
questionable, or doubtful
- Review the facts and determine whether other potentially
liable parties have been overlooked
2025/2026 COMPLETE QUESTIONS
AND CORRECT DETAILED ANSWERS ||
100% GUARANTEED PASS
<RECENT VERSION>
1. First-party claim - ANSWER ✓ A demand by an insured person or
organization seeking to recover from its insurer for a loss that its insurance
policy may cover.
2. Third-party claim - ANSWER ✓ A demand against an insured by a person
or organization other than the insured or the insurer, seeking to recover
damages that may be payable by the insured's liability insurance.
3. Negligence - ANSWER ✓ The failure to exercise the degree of care that a
reasonable person in a similar situation would exercise to avoid harming
others.
4. Proximate cause - ANSWER ✓ A cause that, in a natural and continuous
sequence unbroken by any new and independent cause, produces an event
and without which the event would not have happened.
5. Dram shop act - ANSWER ✓ A statute holding establishments that serve
alcoholic beverages responsible for harm that results from serving patrons
alcohol in violation of the statute.
6. Negligent entrustment - ANSWER ✓ The act of leaving a dangerous article
with a person who the lender knows, or should know, is likely to use it in an
unreasonably risky manner.
7. Negligence per se - ANSWER ✓ An act that is considered inherently
negligent because of a violation of a law or an ordinance.
,8. Vicarious liability - ANSWER ✓ A legal responsibility that occurs when
one party is held liable for the actions of a subordinate or an associate
because of the relationship between the two parties.
9. Agent - ANSWER ✓ In the agency relationship, the party that is authorized
by the principal to act on the principal's behalf.
10.Principal - ANSWER ✓ The party in an agency relationship that authorizes
the agent to act on that party's behalf.
11.Rescue doctrine - ANSWER ✓ A legal doctrine providing that a party
causing an accident can be liable to any people involved in rescue efforts as
a result of the accident.
12.Joint and several liability - ANSWER ✓ The liability of multiple defendants
either collectively or individually for the entire amount of damages sought
by the plaintiff regardless of their relative degree of responsibility.
13.Vehicles loaned to the insured. - ANSWER ✓ Auto dealers often loan
vehicles to insureds while making repairs. The standard dealer garage policy
makes the dealer's coverage primary; however, many states make the
insured's PAP responsible for losses occurring while the insured is driving
the loaner. A few state courts treat loaners as rentals, also making the PAP
coverage primary.
14.Self-insured rental car companies - ANSWER ✓ Self-insured rental car
companies may argue that the Other Insurance provision that would make
them primary does not apply to them because they don't have "insurance" on
the vehicle. Some states that don't accept this argument reason that self-
insureds are required by law to provide at least minimum liability limits, and
others reason that self-insurance is a functional equivalent of insurance.
15.Car-sharing services - ANSWER ✓ Car-sharing services allow members to
pay a fee and have access as needed to cars that are also driven by other
members. Car-sharing services provide liability coverage, but usually only
for minimum or low limits. While this may not be a problem for a driver
, with other auto coverage, many car-sharing members do not own an auto,
potentially leaving them liable for uncovered damages.
16.Pro rata contribution - ANSWER ✓ An approach to other insurance by
which the insurers contribute to the loss payment in the proportion to which
they contribute to the total amount of coverage purchased (their limits of
liability).
17.Contribution by equal shares - ANSWER ✓ Method of sharing loss when
two or more policies apply in which each insurer pays an equal amount until
the claim is fully paid or until one insurer exhausts its limit, in which case
the other insurer pays the remainder of the claim (up to its limit).
18.Determining Total Loss - ANSWER ✓ some use a threshold for a total loss,
such as 75 or 85 percent of the vehicle's ACV. Then, if the repair costs
exceed that threshold, the vehicle is determined to be a total loss and the
claim is paid accordingly.
19.Conor is handling an auto claim involving the death of a minor child in a
state that recognizes the intrinsic value of children. Conor's proposed
settlement amount will include - ANSWER ✓ A calculated value of the
child's future services to the parents.
A calculated value of the child's future services to the parents. Intrinsic value
of children is the assumption that parents invest in children knowing that
they will provide for them when they are older
20.Cristobal has several methods available to him as he evaluates the settlement
range for his claim:
individual case method, roundtable technique, formula method, and expert
system. Which method should Cristobal use if he is dealing with a minor
soft tissue claim and wants a simple approach to achieve an early, mutually
agreeable settlement? - ANSWER ✓ Formula method involves a
mathematical formula set by actuaries to set reserves.
21.Anna injured her back in a not-at-fault auto accident and has a bodily injury
claim with the other driver's insurance company. Later, she fell and her back
injury was aggravated. Her claims representative for the first accident told
her that the aggravation of her back injury - ANSWER ✓ Was covered
because it was an unavoidable consequence of the back injury. An
, intervening problem is covered if it is an unavoidable consequence of the
first injury.
22.Some personal auto policies provide that someone could reasonably expect
to be allowed to use an insured's vehicle even if they did not ask specifically,
such as a relative visiting from out of town. This is called - ANSWER ✓
Implied permission.
Some policies provide for implied permission for the use of an insured's
auto.
23.In determining coverage for emotional injury, a claims rep must understand
applicable policy language.
Which one of the following is correct? - ANSWER ✓ The term "harm" is
potentially broader than the term "injury"
in determining coverage for emotional injury.
24.An insurance policy is often construed to be a contract of adhesion. This
means that:
a. The insured can make changes to the policy wording before the
effective date of the policy.
b. The policy is offered to insureds on a take-it-or-leave-it basis.
c. The policy cannot be assigned to another without the insurer's
consent.
d. The policy coverage follows the vehicle. - ANSWER ✓ Most policies
are contracts of adhesion, meaning that the insurer, in most cases,
offers the insurance policy to insureds on a take-it-or-leave-it basis.
25.Claims representatives should take these steps after reviewing the facts of a
claim: - ANSWER ✓ - Review and apply the relevant law
- Determine the legal obligations and defenses that apply to the
facts
- Determine what choices, if any, the claimant might have in
applying the law
- Determine what category liability falls into—clear, probable,
questionable, or doubtful
- Review the facts and determine whether other potentially
liable parties have been overlooked
