AIC 304 PRACTICE EXAM QUESTIONS
WITH COMPLETE SOLUTIONS
(ALREADY PASSED!!)
An insured's 5-year-old computer is damaged in a house fire and must be replaced.
Which one of the following is a method of depreciation that is most likely to be used by
the property insurer? - Answer- A. Straight line depreciation
B. Decelerated depreciation
C. Accelerated depreciation
D. Physical wear and tear depreciation
C
Mathias is preparing to negotiate a serious merchandise damage claim. He has
consulted with a salvor to understand the income potential of the merchandise. This is
so that Mathias can - Answer- A. Minimize the insurer's exposure.
B. Negotiate a fair settlement.
C. Sell the merchandise for as much as possible.
D. Sell the merchandise for as little as possible.
B
Coverage D—Loss of Use under ISO homeowners policy forms only applies to rental
property under which one of the following circumstances? - Answer- A. If it is located
separately from the residence premises
B. If it is currently occupied
C. If it is currently vacant
D. If it is within the residence premises
D
A commercial property damages claims rep can determine book value by using three
other values: value of stock as of last physical inventory; value of additions to stock from
last inventory date to date of loss; and - Answer- A. Value of stock at time of acquisition.
B. Slippage documented in last physical inventory.
C. Value of stock sold from last inventory date to date of loss.
D. Depreciation of stock since last inventory date.
C
, With most property insurance policies, the loss or damage claimed must have occurred
during the policy period in order to be covered. This is called a(n) - Answer- A.
Occurrence basis.
B. Policy basis.
C. Period of restoration basis.
D. Calendar basis.
A
Katie is adjusting a homeowners insurance claim for property damage from windstorm
and hail. The claim includes repair to a fishing boat and trailer that were in the insured's
driveway; replacement of roof surface and flashing that were blown away by the wind
and damaged by hail; replacement of trees and shrubs that were uprooted by the wind;
removal of trees that were blown onto the ground in the back yard. Which one of the
following policyholder's requests does Katie approve? - Answer- A. Roof replacement
B. Boat and trailer repair
C. Tree removal
D. Tree and shrub replacement
A
Molly is the claims representative assigned to a contractors equipment claim for a large
bulldozer. During her initial investigation she learned that the bulldozer is leased from
an equipment dealer. Which part of the contractors equipment policy will Molly want to
review for more information about the obligations to the equipment dealer? - Answer- A.
Loss payable provision
B. Conditions
C. Equipment schedule
D. Coinsurance provision
A
To determine a loss payment under the BPP's coinsurance provision, you would divide
the amount of insurance carried by the amount of insurance required, multiply that
figure by the loss amount, and subtract - Answer- A. Depreciation.
B. The agreed value.
C. The deductible.
D. Any loss payments from reinsurance.
C
Aaron is handling a property claim for damage from a fire. He has hired experts,
consultants and service providers and relayed his needs to them; he has gathered
damage patterns, a reconstruction of the scene, eliminated other sources, and made a
determination of cause; he has prepared his report with the understanding that it might
WITH COMPLETE SOLUTIONS
(ALREADY PASSED!!)
An insured's 5-year-old computer is damaged in a house fire and must be replaced.
Which one of the following is a method of depreciation that is most likely to be used by
the property insurer? - Answer- A. Straight line depreciation
B. Decelerated depreciation
C. Accelerated depreciation
D. Physical wear and tear depreciation
C
Mathias is preparing to negotiate a serious merchandise damage claim. He has
consulted with a salvor to understand the income potential of the merchandise. This is
so that Mathias can - Answer- A. Minimize the insurer's exposure.
B. Negotiate a fair settlement.
C. Sell the merchandise for as much as possible.
D. Sell the merchandise for as little as possible.
B
Coverage D—Loss of Use under ISO homeowners policy forms only applies to rental
property under which one of the following circumstances? - Answer- A. If it is located
separately from the residence premises
B. If it is currently occupied
C. If it is currently vacant
D. If it is within the residence premises
D
A commercial property damages claims rep can determine book value by using three
other values: value of stock as of last physical inventory; value of additions to stock from
last inventory date to date of loss; and - Answer- A. Value of stock at time of acquisition.
B. Slippage documented in last physical inventory.
C. Value of stock sold from last inventory date to date of loss.
D. Depreciation of stock since last inventory date.
C
, With most property insurance policies, the loss or damage claimed must have occurred
during the policy period in order to be covered. This is called a(n) - Answer- A.
Occurrence basis.
B. Policy basis.
C. Period of restoration basis.
D. Calendar basis.
A
Katie is adjusting a homeowners insurance claim for property damage from windstorm
and hail. The claim includes repair to a fishing boat and trailer that were in the insured's
driveway; replacement of roof surface and flashing that were blown away by the wind
and damaged by hail; replacement of trees and shrubs that were uprooted by the wind;
removal of trees that were blown onto the ground in the back yard. Which one of the
following policyholder's requests does Katie approve? - Answer- A. Roof replacement
B. Boat and trailer repair
C. Tree removal
D. Tree and shrub replacement
A
Molly is the claims representative assigned to a contractors equipment claim for a large
bulldozer. During her initial investigation she learned that the bulldozer is leased from
an equipment dealer. Which part of the contractors equipment policy will Molly want to
review for more information about the obligations to the equipment dealer? - Answer- A.
Loss payable provision
B. Conditions
C. Equipment schedule
D. Coinsurance provision
A
To determine a loss payment under the BPP's coinsurance provision, you would divide
the amount of insurance carried by the amount of insurance required, multiply that
figure by the loss amount, and subtract - Answer- A. Depreciation.
B. The agreed value.
C. The deductible.
D. Any loss payments from reinsurance.
C
Aaron is handling a property claim for damage from a fire. He has hired experts,
consultants and service providers and relayed his needs to them; he has gathered
damage patterns, a reconstruction of the scene, eliminated other sources, and made a
determination of cause; he has prepared his report with the understanding that it might
