AIC 30 REAL ESTATE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS

AIC 30 REAL ESTATE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS The claim rep received a letter from an insured claiming damage to his property under a homeowners policy. Which one of the following statements about the letter is true? a) this is not an actual loss notice because the producer must submit an ACORD form by mail, email or fax b) this is an actual loss notice because losses can be reported by mail c) this is not an actual loss notice because an actual loss notice must follow a standardized format and be submitted electronically d) this can be an actual loss notice only if it contains all of the information concerning the loss and its causes - Answer-b) this is an actual loss notice because losses can be reported by mail Which one of the following statements is true concerning the six activities in the claim handling process? a) they are not always undertaken sequentially b) activities cannot be repeated for a particular claim c) only one activity should be performed at a time d) not all activities are performed in every claim - Answer-a) they are not always undertaken sequentially A claim rep acknowledging receipt of a claim should advise - Answer-that the claim was received and provide the name of the claim rep, his/her telephone number and the claim number A basic identification of the policy should occur before the claim - Answer-investigation occurs Successful insurers follow a systematic approach to handling claims. The first step in the claims process is the - Answer-loss notice and acknowledgment and assignment A hospital patient slips on a wet floor in her room but is not injured is an example of a _______________________ claim. - Answer-record-only A rep investigating a third-party claim is very concerned about waiving any rights under the policy. She decides to send a reservation of rights letter to the third-party claimant. This action is - Answer-not advisable because a third-party claimant has no obligations under the policy When speaking with an insured, claim reps must realize that many insureds - Answer-do not understand the details of their insurance coverage and require explanations of coverages, limitation, and possible exclusions What is a tool that claim reps commonly use to avoid waiver and estoppel? - Answer-reservation of rights letter Medical documentation helps determine - Answer-the costs of treatment and the amount of pain and suffering that resulted from the injury or accident Which of the following pieces of information is most important for a claim rep to obtain upon first contact with a liability claimant? a) claimant's medical history b) nature and extent of the injury c) claimant's accident history d) claimant's sources of additional income - Answer-b) nature and extent of the injury Mary refuses to give testimony to assist her insurer in a subrogation claim against the liable third party involved in her auto accident. What may the insurer do? - Answer-the insurer may pursue Mary to pay the amount that the insurer could have collected from the liable third party How does legal liability differ from criminal liability/responsibility? - Answer-Criminal liability arises from laws that apply to wrongful acts that society deems harmful to the public welfare When does contractual liability arise? - Answer-when someone's rights under a contract's terms are violated Workers compensation statutes impose strict liability on ______________ to pay ________________ to ______________. - Answer-employers, specified benefits, injured workers Damages that courts award in order to compensate claimants for such things as pain and suffering that do not involve specific measurable expenses are referred to as - Answer-general damages Compensatory damages normally covered by a liability policy include - Answer-pain and suffering and out-of-pocket expenses claimed up to the policy limit Information gained during the investigation of a claim helps the claims rep to determine - Answer-the cause of loss, liability for the loss, and the amount of loss For liability claims, damages for which the insured may be found liable include compensatory and - Answer-punitive Prior to issuing a claim payment, claims reps should review _______________ databases for - Answer-delinquent child support payments Which one of the following alternative dispute resolution methods enables parties to test the validity of their positions and continue negotiations? a) mediation b) arbitration c) mini-trial d) appraisal provision - Answer-c) mini-trial The main reason an insurer would pay claims using a "draft" rather than a check is that - Answer-a draft gives the insurer opportunity to verify that the payment is proper when the draft is presented to the bank A mini-trial is a cost-effective alternative to a jury trial because it allows lawyers to present a(n) ____________ to a(n) ____________ who give ___________ on the ____________________________ of a case. - Answer-abbreviated version of a trial, panel, feedback, strengths and weaknesses The individual case method is one of ______________________ based on the _________________________ and __________________________ in ______________________. - Answer-claim's circumstances, claim rep's experience, handling similar claims The expert system method uses ____________________ or the name of the _____________________________ in creating a reserve. - Answer-subjective information, treating physician Reserve adequacy are important for supporting an insurer's continued __________ and ___________. - Answer-solvency, capacity A claim rep should change a reserve - Answer-when new info is received that warrants a change in the overall cost of the claim Underrated reserves can affect an insurer by - Answer-causing errors in ratemaking, eventually affecting an insurer's ability to write business competitively and ultimately affecting its solvency The average value method of reserving is useful in setting reserves when - Answer-there are small variations in the loss amounts paid for specific types of claims