AIC 302 SIMULATED EXAM QUESTIONS WITH
VERIFIED ANSWERS
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 - Answers - 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
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? - Answers
- Formula method involves a mathematical formula set by actuaries to set reserves.
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 - Answers - 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.
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 - Answers - Implied permission.
Some policies provide for implied permission for the use of an insured's auto.
In determining coverage for emotional injury, a claims rep must understand applicable
policy language.
Which one of the following is correct? - Answers - The term "harm" is potentially broader
than the term "injury"
in determining coverage for emotional injury.
Mehmet was seriously injured in an automobile collision and died after a stay in the
hospital. His family is bringing a survival action claim for medical expenses, pain and
suffering, loss of earnings, and automobile repairs. Which one of the following claims
will be allowed only if the family can demonstrate that Mehmet was conscious after the
accident but before dying? - Answers - Pain and suffering can only be claimed if the
decedent was conscious of the pain and suffering before dying.
, Claims reps can isolate specific coverage issues that should be investigated to
determine whether exclusions apply by using a series of yes-or-no questions in the form
of a - Answers - Decision tree.
Claims reps can isolate specific coverage issues that should be investigated to
determine whether exclusions apply by using a series of yes-or-no questions in the form
of a decision tree.
Caitlin was involved in a multi-car accident on a highway. The claims representative for
her insurance company is making a case that distracted driving by Mike, one of the
other drivers involved in the accident, was a contributing cause of the accident. The
records indicate that Mike was using a hands-free device at the time of the accident.
Which one of the following statements is true regarding the use of a hands-free device
while driving? - Answers - The use of a hands-free device while driving can lead to a
cognitive distraction.
Sean is an auto liability claims representative. He is working on a claim involving an
insured driver who rear-ended another vehicle while driving in heavy traffic. No one was
injured, but there was $3,400 in damage to the other vehicle. Which one of the following
statements is correct regarding this accident? - Answers - All four elements of
negligence exist in this accident. There was a duty owed to others to operate the vehicle
safely, that duty was breached, and was the proximate cause of the resulting $3,400 in
damages. There is no clear evidence of negligence per se provided.
Hilltop Auto Dealership (Hilltop) is insured by the Auto Dealers Coverage Form (ADCF)
with a $4 million limit for physical damage coverage on a nonreporting basis. The
dealership experienced a fire loss that resulted in $100,000 in damage to the dealer's
covered autos. The actual value of the inventory of covered autos at the time of the loss
was $5 million. How much will Hilltop's ADCF insurer pay for this covered loss?
Disregard any deductibles that may apply. - Answers - $80,000
Hilltop's insurer will pay $80,000 for this covered loss. The policy limit was 80% ($4
million/$5 million) of the actual value at the time of the loss, so the insurer will only pay
80% of the loss. $100,000 x .80 = $80,000
A technician repairing auto damage must replace a body panel as well as the running
light/turn signal mounted within the panel. The replacement of the light assembly is
called a(n) - Answers - Included operation.
An included operation is any operation completed in its entirety while another,
concurrent, operation is performed.
One of the primary questions that must be answered in investigating an emotional injury
claim is whether, under the applicable policy, emotional distress is considered a(n) -
Answers - Bodily injury.
Mark was involved in a rear-end collision on a highway, and is likely liable for not
keeping a clear, assured distance from the other vehicle. Joe, a passenger in the other
VERIFIED ANSWERS
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 - Answers - 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
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? - Answers
- Formula method involves a mathematical formula set by actuaries to set reserves.
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 - Answers - 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.
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 - Answers - Implied permission.
Some policies provide for implied permission for the use of an insured's auto.
In determining coverage for emotional injury, a claims rep must understand applicable
policy language.
Which one of the following is correct? - Answers - The term "harm" is potentially broader
than the term "injury"
in determining coverage for emotional injury.
Mehmet was seriously injured in an automobile collision and died after a stay in the
hospital. His family is bringing a survival action claim for medical expenses, pain and
suffering, loss of earnings, and automobile repairs. Which one of the following claims
will be allowed only if the family can demonstrate that Mehmet was conscious after the
accident but before dying? - Answers - Pain and suffering can only be claimed if the
decedent was conscious of the pain and suffering before dying.
, Claims reps can isolate specific coverage issues that should be investigated to
determine whether exclusions apply by using a series of yes-or-no questions in the form
of a - Answers - Decision tree.
Claims reps can isolate specific coverage issues that should be investigated to
determine whether exclusions apply by using a series of yes-or-no questions in the form
of a decision tree.
Caitlin was involved in a multi-car accident on a highway. The claims representative for
her insurance company is making a case that distracted driving by Mike, one of the
other drivers involved in the accident, was a contributing cause of the accident. The
records indicate that Mike was using a hands-free device at the time of the accident.
Which one of the following statements is true regarding the use of a hands-free device
while driving? - Answers - The use of a hands-free device while driving can lead to a
cognitive distraction.
Sean is an auto liability claims representative. He is working on a claim involving an
insured driver who rear-ended another vehicle while driving in heavy traffic. No one was
injured, but there was $3,400 in damage to the other vehicle. Which one of the following
statements is correct regarding this accident? - Answers - All four elements of
negligence exist in this accident. There was a duty owed to others to operate the vehicle
safely, that duty was breached, and was the proximate cause of the resulting $3,400 in
damages. There is no clear evidence of negligence per se provided.
Hilltop Auto Dealership (Hilltop) is insured by the Auto Dealers Coverage Form (ADCF)
with a $4 million limit for physical damage coverage on a nonreporting basis. The
dealership experienced a fire loss that resulted in $100,000 in damage to the dealer's
covered autos. The actual value of the inventory of covered autos at the time of the loss
was $5 million. How much will Hilltop's ADCF insurer pay for this covered loss?
Disregard any deductibles that may apply. - Answers - $80,000
Hilltop's insurer will pay $80,000 for this covered loss. The policy limit was 80% ($4
million/$5 million) of the actual value at the time of the loss, so the insurer will only pay
80% of the loss. $100,000 x .80 = $80,000
A technician repairing auto damage must replace a body panel as well as the running
light/turn signal mounted within the panel. The replacement of the light assembly is
called a(n) - Answers - Included operation.
An included operation is any operation completed in its entirety while another,
concurrent, operation is performed.
One of the primary questions that must be answered in investigating an emotional injury
claim is whether, under the applicable policy, emotional distress is considered a(n) -
Answers - Bodily injury.
Mark was involved in a rear-end collision on a highway, and is likely liable for not
keeping a clear, assured distance from the other vehicle. Joe, a passenger in the other
