AIIM Certified Automotive Insurance Adjuster
CAIA Exam
**Question 1. Which type of automobile insurance policy provides coverage for damage to the
insured vehicle caused by a collision with another vehicle or object?**
A) Liability
B) Comprehensive
C) Collision
D) Uninsured/Underinsured Motorist
Answer: C
Explanation: Collision coverage pays for damage to the insured’s own vehicle resulting from a
collision, regardless of fault.
**Question 2. In an auto insurance policy, the amount the insured must pay out‑of‑pocket
before the insurer’s liability begins is called the**
A) Premium
B) Deductible
C) Endorsement
D) Rider
Answer: B
Explanation: A deductible is the specified sum the policyholder agrees to pay before the
insurance company pays a claim.
**Question 3. The principle that requires an insurer to compensate the insured only for the
actual loss suffered, without allowing a profit, is known as**
A) Subrogation
B) Indemnity
C) Insurable interest
D) Utmost good faith
Answer: B
, AIIM Certified Automotive Insurance Adjuster
CAIA Exam
Explanation: Indemnity limits recovery to the amount of the loss, preventing the insured from
receiving more than the loss incurred.
**Question 4. Which of the following best defines “insurable interest” in the context of
automotive insurance?**
A) The insured’s desire to purchase coverage
B) A legal right to protect a property from loss
C) The insurer’s financial stake in the claim
D) The requirement to disclose all facts truthfully
Answer: B
Explanation: Insurable interest exists when the policyholder would suffer a financial loss if the
insured vehicle were damaged or destroyed.
**Question 5. When an insurer pays a claim to a third‑party plaintiff and then seeks
reimbursement from the at‑fault driver, this process is called**
A) Subrogation
B) Indemnification
C) Reinstatement
D) Adjustment
Answer: A
Explanation: Subrogation allows the insurer to step into the shoes of the insured to recover
costs from the party responsible for the loss.
**Question 6. A claim filed by the policyholder for damage to their own vehicle after a hailstorm
is an example of a**
A) First‑party claim
B) Third‑party claim
, AIIM Certified Automotive Insurance Adjuster
CAIA Exam
C. Cross‑claim
D. Counter‑claim
Answer: A
Explanation: First‑party claims involve the insured seeking compensation under their own policy
for covered losses.
**Question 7. Which component of an automobile insurance policy can be added to extend
coverage for rental reimbursement while the insured vehicle is being repaired?**
A) Rider
B) Endorsement
C. Exclusion
D. Deductible
Answer: B
Explanation: An endorsement modifies the original policy, such as adding rental reimbursement
coverage.
**Question 8. The legal duty of an insurer to provide a defense for the insured in a lawsuit
arising from a covered claim is called**
A) Duty to settle
B) Duty to defend
C. Duty of utmost good faith
D. Duty of indemnity
Answer: B
Explanation: Duty to defend obligates the insurer to furnish legal representation when the
insured is sued for a claim potentially covered by the policy.
, AIIM Certified Automotive Insurance Adjuster
CAIA Exam
**Question 9. Which of the following is NOT typically considered a primary cause of vehicle
damage in an accident investigation?**
A) Impact force
B. Weather conditions
C. Driver’s age
D. Vehicle speed
Answer: C
Explanation: Primary causes focus on physical factors; driver’s age is a risk factor but not a direct
cause of damage.
**Question 10. When decoding a Vehicle Identification Number (VIN), the 10th character
indicates**
A) Model year
B) Plant of manufacture
C) Engine type
D) Body style
Answer: A
Explanation: The 10th position of the VIN encodes the model year of the vehicle.
**Question 11. Modern vehicles increasingly use high‑strength steel for structural components
because**
A) It is cheaper than aluminum
B) It offers superior crash energy absorption
C. It reduces vehicle weight more than carbon fiber
D. It eliminates the need for airbags
Answer: B
CAIA Exam
**Question 1. Which type of automobile insurance policy provides coverage for damage to the
insured vehicle caused by a collision with another vehicle or object?**
A) Liability
B) Comprehensive
C) Collision
D) Uninsured/Underinsured Motorist
Answer: C
Explanation: Collision coverage pays for damage to the insured’s own vehicle resulting from a
collision, regardless of fault.
**Question 2. In an auto insurance policy, the amount the insured must pay out‑of‑pocket
before the insurer’s liability begins is called the**
A) Premium
B) Deductible
C) Endorsement
D) Rider
Answer: B
Explanation: A deductible is the specified sum the policyholder agrees to pay before the
insurance company pays a claim.
**Question 3. The principle that requires an insurer to compensate the insured only for the
actual loss suffered, without allowing a profit, is known as**
A) Subrogation
B) Indemnity
C) Insurable interest
D) Utmost good faith
Answer: B
, AIIM Certified Automotive Insurance Adjuster
CAIA Exam
Explanation: Indemnity limits recovery to the amount of the loss, preventing the insured from
receiving more than the loss incurred.
**Question 4. Which of the following best defines “insurable interest” in the context of
automotive insurance?**
A) The insured’s desire to purchase coverage
B) A legal right to protect a property from loss
C) The insurer’s financial stake in the claim
D) The requirement to disclose all facts truthfully
Answer: B
Explanation: Insurable interest exists when the policyholder would suffer a financial loss if the
insured vehicle were damaged or destroyed.
**Question 5. When an insurer pays a claim to a third‑party plaintiff and then seeks
reimbursement from the at‑fault driver, this process is called**
A) Subrogation
B) Indemnification
C) Reinstatement
D) Adjustment
Answer: A
Explanation: Subrogation allows the insurer to step into the shoes of the insured to recover
costs from the party responsible for the loss.
**Question 6. A claim filed by the policyholder for damage to their own vehicle after a hailstorm
is an example of a**
A) First‑party claim
B) Third‑party claim
, AIIM Certified Automotive Insurance Adjuster
CAIA Exam
C. Cross‑claim
D. Counter‑claim
Answer: A
Explanation: First‑party claims involve the insured seeking compensation under their own policy
for covered losses.
**Question 7. Which component of an automobile insurance policy can be added to extend
coverage for rental reimbursement while the insured vehicle is being repaired?**
A) Rider
B) Endorsement
C. Exclusion
D. Deductible
Answer: B
Explanation: An endorsement modifies the original policy, such as adding rental reimbursement
coverage.
**Question 8. The legal duty of an insurer to provide a defense for the insured in a lawsuit
arising from a covered claim is called**
A) Duty to settle
B) Duty to defend
C. Duty of utmost good faith
D. Duty of indemnity
Answer: B
Explanation: Duty to defend obligates the insurer to furnish legal representation when the
insured is sued for a claim potentially covered by the policy.
, AIIM Certified Automotive Insurance Adjuster
CAIA Exam
**Question 9. Which of the following is NOT typically considered a primary cause of vehicle
damage in an accident investigation?**
A) Impact force
B. Weather conditions
C. Driver’s age
D. Vehicle speed
Answer: C
Explanation: Primary causes focus on physical factors; driver’s age is a risk factor but not a direct
cause of damage.
**Question 10. When decoding a Vehicle Identification Number (VIN), the 10th character
indicates**
A) Model year
B) Plant of manufacture
C) Engine type
D) Body style
Answer: A
Explanation: The 10th position of the VIN encodes the model year of the vehicle.
**Question 11. Modern vehicles increasingly use high‑strength steel for structural components
because**
A) It is cheaper than aluminum
B) It offers superior crash energy absorption
C. It reduces vehicle weight more than carbon fiber
D. It eliminates the need for airbags
Answer: B
