Associate in Claims (AIC) Exam Questions and
Correct Answers (Verified Answers) Plus
Rationale 2027 Q&A| Instant Download Pdf
1. What is the primary responsibility of a claims adjuster after
receiving notice of a loss?
A. Determine the insurer's annual premium rates
B. Investigate the loss and determine whether coverage and payment
are appropriate
C. Sell additional insurance policies to the claimant
D. Establish the insurer's investment strategy
Answer: B. Investigate the loss and determine whether coverage and
payment are appropriate
Rationale: A claims adjuster's central responsibility is to investigate
reported losses, interpret the applicable policy provisions, evaluate
liability and damages, and determine the appropriate claim resolution.
Premium-setting and investment decisions are generally handled by
other departments.
,2. Which principle requires an insurer to restore an insured financially
after a covered loss without allowing the insured to profit from the
loss?
A. Subrogation
B. Contribution
C. Indemnity
D. Salvage
Answer: C. Indemnity
Rationale: The principle of indemnity is designed to place the insured in
approximately the same financial position occupied immediately before
the covered loss. It prevents insurance from becoming a mechanism for
financial gain from a loss.
3. Which document generally contains the agreement between the
insurer and insured and defines the coverage provided?
A. Claim diary
B. Insurance policy
C. Adjuster's report
D. Proof of loss
,Answer: B. Insurance policy
Rationale: The insurance policy is the contractual document establishing
the rights and duties of the insurer and insured. It identifies covered
risks, exclusions, conditions, limits, definitions, and other provisions
governing the insurance relationship.
4. An adjuster is determining whether a reported loss falls within the
policy's insuring agreement. What is the adjuster primarily
evaluating?
A. Whether the insured has a good credit score
B. Whether the basic requirements for coverage have been met
C. Whether the insurer wants to renew the policy
D. Whether the claimant has purchased another policy
Answer: B. Whether the basic requirements for coverage have been
met
Rationale: The insuring agreement establishes the fundamental promise
of coverage. The adjuster must first determine whether the reported
event and resulting loss potentially fall within that grant of coverage
before proceeding to exclusions, conditions, limits, and other
considerations.
, 5. What is the purpose of an insurance policy exclusion?
A. To expand coverage automatically
B. To identify circumstances or losses that are not covered
C. To increase the policy limit after a loss
D. To eliminate the need for an investigation
Answer: B. To identify circumstances or losses that are not covered
Rationale: Exclusions remove specific risks, causes of loss, property, or
circumstances from coverage. Adjusters must carefully review
exclusions because a loss may initially appear covered under the
insuring agreement but subsequently be excluded.
6. Which principle allows an insurer that has paid a covered loss to
pursue recovery from a responsible third party?
A. Indemnity
B. Subrogation
C. Utmost good faith
D. Adhesion
Answer: B. Subrogation
Correct Answers (Verified Answers) Plus
Rationale 2027 Q&A| Instant Download Pdf
1. What is the primary responsibility of a claims adjuster after
receiving notice of a loss?
A. Determine the insurer's annual premium rates
B. Investigate the loss and determine whether coverage and payment
are appropriate
C. Sell additional insurance policies to the claimant
D. Establish the insurer's investment strategy
Answer: B. Investigate the loss and determine whether coverage and
payment are appropriate
Rationale: A claims adjuster's central responsibility is to investigate
reported losses, interpret the applicable policy provisions, evaluate
liability and damages, and determine the appropriate claim resolution.
Premium-setting and investment decisions are generally handled by
other departments.
,2. Which principle requires an insurer to restore an insured financially
after a covered loss without allowing the insured to profit from the
loss?
A. Subrogation
B. Contribution
C. Indemnity
D. Salvage
Answer: C. Indemnity
Rationale: The principle of indemnity is designed to place the insured in
approximately the same financial position occupied immediately before
the covered loss. It prevents insurance from becoming a mechanism for
financial gain from a loss.
3. Which document generally contains the agreement between the
insurer and insured and defines the coverage provided?
A. Claim diary
B. Insurance policy
C. Adjuster's report
D. Proof of loss
,Answer: B. Insurance policy
Rationale: The insurance policy is the contractual document establishing
the rights and duties of the insurer and insured. It identifies covered
risks, exclusions, conditions, limits, definitions, and other provisions
governing the insurance relationship.
4. An adjuster is determining whether a reported loss falls within the
policy's insuring agreement. What is the adjuster primarily
evaluating?
A. Whether the insured has a good credit score
B. Whether the basic requirements for coverage have been met
C. Whether the insurer wants to renew the policy
D. Whether the claimant has purchased another policy
Answer: B. Whether the basic requirements for coverage have been
met
Rationale: The insuring agreement establishes the fundamental promise
of coverage. The adjuster must first determine whether the reported
event and resulting loss potentially fall within that grant of coverage
before proceeding to exclusions, conditions, limits, and other
considerations.
, 5. What is the purpose of an insurance policy exclusion?
A. To expand coverage automatically
B. To identify circumstances or losses that are not covered
C. To increase the policy limit after a loss
D. To eliminate the need for an investigation
Answer: B. To identify circumstances or losses that are not covered
Rationale: Exclusions remove specific risks, causes of loss, property, or
circumstances from coverage. Adjusters must carefully review
exclusions because a loss may initially appear covered under the
insuring agreement but subsequently be excluded.
6. Which principle allows an insurer that has paid a covered loss to
pursue recovery from a responsible third party?
A. Indemnity
B. Subrogation
C. Utmost good faith
D. Adhesion
Answer: B. Subrogation
