AIC 302, 4, AND 5 EXAM QUESTIONS WITH VERIFIED SOLUTIONS
LATEST UPDATE 2026
When a claims rep sets out to determine the cause of loss in an auto physical damage
claim, he or she should request a - Answers written or recorded statement from the
driver of the insured vehicle, even if that person does not own the vehicle. Copies of
the police report, witness statements, and an estimate of damage can also provide
important details of the loss.
After receiving a loss report for damage to an insured vehicle, a claims rep will
usually contact the insured to obtain the loss details. Depending on insurer guidelines,
he or she may take a - Answers recorded statement from the insured so that there is a
record of the loss details in the insured's own words. The insured should be asked to
verify ownership, describe the circumstances surrounding the accident, and describe
any injuries.
Rather than have claims reps take recorded statements, some insurers use statement
forms, which request accident details and, often, a diagram. Insurers send these forms
to - Answers the insured or the driver (if other than the insured) and any passengers
or witnesses to collect as much information as possible.
The claims rep may arrange for an appraiser to inspect the damaged vehicles and
prepare damage estimates. Some insurers use auto-estimating services, which act in
many ways like traditional appraisers but also take a more holistic approach to dealing
with auto losses. Auto-estimating services often - Answers assess vehicle damage on-
site and provide a detailed report on the vehicle's condition, including photos. In
addition to performing the initial assessment, these services can help insurers close
out losses, provide check-delivery services, and arrange for autos that are considered
total losses to be moved to a salvage yard or auto shop.
The claims rep or appraiser should verify the vehicle identification number (VIN),
which is unique to the specific vehicle. Verifying the VIN is critical because it reveals
whether the vehicle in question was - Answers actually the vehicle insured by the
policy. The VIN can also indicate the specific parts needed for repair.
Finally, an appraiser will prepare a damage estimate that includes the items to be
repaired or replaced, the amount of labor involved, and the parts needed. The
expected costs of materials and labor will be - Answers added in. Everything is then
communicated to the claims rep, the insured or claimant, and the repair facility. The
claims rep uses this estimate to conclude the claim.
Documentation for an auto physical damage claim usually includes these items: -
Answers Statements from the insured, drivers, and witnesses
Photos of the damaged vehicle
A police report
A fire marshal report (if applicable)
Damage estimates
Reports by experts (if applicable)
Any reports prepared by the claims rep
File activity notes
Copies of all correspondence
If the vehicle is a total loss, whether from damage or a theft, the file should also
contain an explanation of how the total loss was - Answers calculated, the vehicle's
title, and a statement about the vehicle's disposition (whether it was taken to a salvage
yard or returned to the insured).
, In the event of a fire, the claims rep may assign an - Answers origin and cause expert
to inspect the vehicle and determine how the fire started.
Fires are caused by accident, intent (arson), or negligence. If the origin and cause
expert determines that the fire was - Answers accidental, the claims rep may not need
any further information to conclude the claim.
If the fire is found to be intentional, the claims rep should work with - Answers
special investigation unit (SIU) staff to determine whether the insured was involved.
If the part was defective or installed incorrectly, the claims rep may pursue
subrogation against the manufacturer or installer. - Answers
special investigation unit (SIU) - Answers A division set up to investigate suspicious
claims, premium fraud, or application fraud.
If the expert determines that the fire was caused by negligence, such as a faulty part or
incorrect installation, the claims rep will - Answers need to determine who installed
the part and whether that party is responsible for the loss.
If an insured claims that a vehicle was stolen, one of four outcomes will occur: -
Answers The vehicle is not recovered.
The vehicle is recovered and repaired.
The vehicle is recovered but is a total loss.
The claim is denied because of fraud or another coverage defense.
When assigned a theft claim, the claims rep should take a recorded statement from the
insured - Answers regarding the vehicle and the loss circumstances. When
questioning the insured about the loss, the claims rep should consider all possibilities.
The statement should include when and where the vehicle was acquired, the VIN,
whether it was financed, and whether it had any - Answers recent repairs. In addition,
the statement should include information that will help calculate the vehicle's value,
such as the vehicle's overall condition, optional equipment, and mileage.
When a vehicle is recovered, it may require repairs. The claims rep should have the
recovered vehicle - Answers inspected and any damage appraised. Most insurers will
declare the vehicle a total loss if it's not recovered within a designated period of time.
Replacement cost - Answers The cost to repair or replace property using new
materials of like kind and quality with no deduction for depreciation.
Actual cash value (ACV) - Answers The cost to replace property with new property
of like kind and quality less depreciation. To calculate ACV, claims reps must
determine the replacement cost and then subtract depreciation.
Auto physical damage claims generally involve one of three scenarios: - Answers
The vehicle is damaged and repairable.
The vehicle is damaged beyond repair.
The vehicle is stolen and not recovered.
When a vehicle is repairable, the claims rep - Answers obtains an estimate and then
concludes the claim by paying the insured the amount needed to repair the damage,
minus the deductible.
When a vehicle is declared a total loss because it's not recovered or because of
damage, the claims rep must determine two things: - Answers the vehicle's pre-
accident ACV and any salvage value the damaged vehicle may have.
Salvage value is the amount that a - Answers salvage yard pays for the damaged
vehicle minus expenses, such as towing and storage.
How would you determine a car's pre-accident ACV and salvage value? - Answers A
claims rep can determine pre-accident ACV by using reference material such as that
provided by Kelley Blue Book or the National Automobile Dealers Association. The
LATEST UPDATE 2026
When a claims rep sets out to determine the cause of loss in an auto physical damage
claim, he or she should request a - Answers written or recorded statement from the
driver of the insured vehicle, even if that person does not own the vehicle. Copies of
the police report, witness statements, and an estimate of damage can also provide
important details of the loss.
After receiving a loss report for damage to an insured vehicle, a claims rep will
usually contact the insured to obtain the loss details. Depending on insurer guidelines,
he or she may take a - Answers recorded statement from the insured so that there is a
record of the loss details in the insured's own words. The insured should be asked to
verify ownership, describe the circumstances surrounding the accident, and describe
any injuries.
Rather than have claims reps take recorded statements, some insurers use statement
forms, which request accident details and, often, a diagram. Insurers send these forms
to - Answers the insured or the driver (if other than the insured) and any passengers
or witnesses to collect as much information as possible.
The claims rep may arrange for an appraiser to inspect the damaged vehicles and
prepare damage estimates. Some insurers use auto-estimating services, which act in
many ways like traditional appraisers but also take a more holistic approach to dealing
with auto losses. Auto-estimating services often - Answers assess vehicle damage on-
site and provide a detailed report on the vehicle's condition, including photos. In
addition to performing the initial assessment, these services can help insurers close
out losses, provide check-delivery services, and arrange for autos that are considered
total losses to be moved to a salvage yard or auto shop.
The claims rep or appraiser should verify the vehicle identification number (VIN),
which is unique to the specific vehicle. Verifying the VIN is critical because it reveals
whether the vehicle in question was - Answers actually the vehicle insured by the
policy. The VIN can also indicate the specific parts needed for repair.
Finally, an appraiser will prepare a damage estimate that includes the items to be
repaired or replaced, the amount of labor involved, and the parts needed. The
expected costs of materials and labor will be - Answers added in. Everything is then
communicated to the claims rep, the insured or claimant, and the repair facility. The
claims rep uses this estimate to conclude the claim.
Documentation for an auto physical damage claim usually includes these items: -
Answers Statements from the insured, drivers, and witnesses
Photos of the damaged vehicle
A police report
A fire marshal report (if applicable)
Damage estimates
Reports by experts (if applicable)
Any reports prepared by the claims rep
File activity notes
Copies of all correspondence
If the vehicle is a total loss, whether from damage or a theft, the file should also
contain an explanation of how the total loss was - Answers calculated, the vehicle's
title, and a statement about the vehicle's disposition (whether it was taken to a salvage
yard or returned to the insured).
, In the event of a fire, the claims rep may assign an - Answers origin and cause expert
to inspect the vehicle and determine how the fire started.
Fires are caused by accident, intent (arson), or negligence. If the origin and cause
expert determines that the fire was - Answers accidental, the claims rep may not need
any further information to conclude the claim.
If the fire is found to be intentional, the claims rep should work with - Answers
special investigation unit (SIU) staff to determine whether the insured was involved.
If the part was defective or installed incorrectly, the claims rep may pursue
subrogation against the manufacturer or installer. - Answers
special investigation unit (SIU) - Answers A division set up to investigate suspicious
claims, premium fraud, or application fraud.
If the expert determines that the fire was caused by negligence, such as a faulty part or
incorrect installation, the claims rep will - Answers need to determine who installed
the part and whether that party is responsible for the loss.
If an insured claims that a vehicle was stolen, one of four outcomes will occur: -
Answers The vehicle is not recovered.
The vehicle is recovered and repaired.
The vehicle is recovered but is a total loss.
The claim is denied because of fraud or another coverage defense.
When assigned a theft claim, the claims rep should take a recorded statement from the
insured - Answers regarding the vehicle and the loss circumstances. When
questioning the insured about the loss, the claims rep should consider all possibilities.
The statement should include when and where the vehicle was acquired, the VIN,
whether it was financed, and whether it had any - Answers recent repairs. In addition,
the statement should include information that will help calculate the vehicle's value,
such as the vehicle's overall condition, optional equipment, and mileage.
When a vehicle is recovered, it may require repairs. The claims rep should have the
recovered vehicle - Answers inspected and any damage appraised. Most insurers will
declare the vehicle a total loss if it's not recovered within a designated period of time.
Replacement cost - Answers The cost to repair or replace property using new
materials of like kind and quality with no deduction for depreciation.
Actual cash value (ACV) - Answers The cost to replace property with new property
of like kind and quality less depreciation. To calculate ACV, claims reps must
determine the replacement cost and then subtract depreciation.
Auto physical damage claims generally involve one of three scenarios: - Answers
The vehicle is damaged and repairable.
The vehicle is damaged beyond repair.
The vehicle is stolen and not recovered.
When a vehicle is repairable, the claims rep - Answers obtains an estimate and then
concludes the claim by paying the insured the amount needed to repair the damage,
minus the deductible.
When a vehicle is declared a total loss because it's not recovered or because of
damage, the claims rep must determine two things: - Answers the vehicle's pre-
accident ACV and any salvage value the damaged vehicle may have.
Salvage value is the amount that a - Answers salvage yard pays for the damaged
vehicle minus expenses, such as towing and storage.
How would you determine a car's pre-accident ACV and salvage value? - Answers A
claims rep can determine pre-accident ACV by using reference material such as that
provided by Kelley Blue Book or the National Automobile Dealers Association. The
