AIC 301 EXAMINATION ANSWERS AND QUESTIONS
SET A+
✔✔Sean and Rick live in a large city. They own 5 SUVs and provide discounted
services to students at a number of the colleges in the area. They transport students
between campus and the airport and local train stations. They also will transport the
students' belongings and deliver them right to their rooms or apartments. Which one of
the following is the appropriate auto coverage form for Sean and Rick? - ✔✔The Motor
Carrier Coverage Form is correct coverage form for Sean and Rick because they are in
the business of providing transportation by property and passengers by auto.
✔✔Paul left his car at a valet parking garage. When he returned to pick up his car
several hours later, he noticed that there was a large scratch and dent along the driver's
side of the car. Paul asked what happened, and the valet said that based on the signs
posted at the entrance and on the parking receipt, the parking garage disclaimed all
liability. Which one of the following statements is correct regarding this bailment
situation? - ✔✔Many courts would consider this disclaimer an illegal contract issue,
contrary to public policy. In this situation the parking garage is the bailee and owes at
least an ordinary degree of care.
✔✔Chelsea is injured in an accident caused by an uninsured motorist and signs a UM
release. Which one of the following is correct? - ✔✔She must cooperate with her insurer
in pursuing subrogation.
A UM release requires the insured to cooperate with the insurer in pursuing
subrogation.
✔✔Larry owns two trucks and works as an owner-operator. Larry was hired by Carrier A
to transport a trailer of goods from Texas to Maine. Rather than bobtailing back to
Texas, Larry entered into a trip lease to haul a return load of cargo for Carrier Z. Which
one of the following will provide liability coverage for Larry's backhaul trip? - ✔✔Carrier
Z's MCCF would provide the liability coverage for Larry's backhaul trip.
✔✔Carla is evaluating a bodily injury claim for a claimant who was injured in an auto
accident. She is considering the claimant's occupation and wages, age, expected work
, life, life expectancy, education and training, and previous job history. Carla is evaluating
the claimant's damages for - ✔✔Diminished earning capacity. This occurs when
permanent injuries or disabilities prevent claimants from working in the same capacity
as they did before the loss occurred.
✔✔Jackson Manufacturing covers its commercial auto exposure with the Business Auto
Coverage Form (BACF). Because it has operations in several no-fault states, it has
Personal Injury Protection (PIP) endorsements added to its BACF. While the
endorsements vary by state, a typical PIP endorsement provides coverage for all of the
following benefits, EXCEPT: - ✔✔Substitute vehicle expenses
The typical PIP endorsement includes benefits for medical and rehabilitation expenses,
lost wages, and death benefits to survivors. It does not include benefits for substitute
vehicle expenses.
✔✔Jose was injured in an auto accident caused by the other driver. Jose's injuries were
covered by his medical insurance. At trial, the court did not allow the insurer to reduce
Jose's award by the amount his medical insurance paid. Its decision was based on the -
✔✔Collateral source rule. This bars the introduction of evidence that a claimant has
other sources of recover.
✔✔Pete's car is stopped at a red light behind Cindy's car. Tony fails to stop for the red
light, and his car his Pete's car which is then pushed into Cindy's car. Cindy is injured
and all of the cars are damaged. Under joint and several liability, which one of the
following statements is correct? - ✔✔Tony is the lone tortfeasor.
There are no joint tortfeasors.
✔✔James Industries is insured by the Business Auto Coverage Form. The auto policy
includes the Medical Payments endorsement with a $10,000 limit. Lisa, one of the
executives at James Industries, is provided with a private passenger vehicle for
business and personal use. She was in a multi-car accident while driving three clients
from the airport to a meeting at the office. Two of the passengers were injured, one with
medical expenses of $4,500 and the other $9,000. Lisa also suffered a minor injury with
medical expenses of $3,500. How much will the insurer for James Industries pay under
the Medical Payments endorsement? - ✔✔The insure will pay $13,500 ($4,500 +
$9,000) under the Medical Payments endorsement regardless of fault. The $10,000 limit
applies per person and coverage is excluded for employees injured in the course of
employment.
✔✔Seriously injured in an auto accident, Damien accepts a settlement agreement that
offers some immediate payment, with the bulk of the payment disbursed over a number
of years. This is called a(n) - ✔✔A structured settlement gives the claimant some
payment immediately but defers much of the payment into the future.
✔✔All states require that denials be prompt, timely and - ✔✔Fair.
All states require that denials be prompt, timely and fair.
SET A+
✔✔Sean and Rick live in a large city. They own 5 SUVs and provide discounted
services to students at a number of the colleges in the area. They transport students
between campus and the airport and local train stations. They also will transport the
students' belongings and deliver them right to their rooms or apartments. Which one of
the following is the appropriate auto coverage form for Sean and Rick? - ✔✔The Motor
Carrier Coverage Form is correct coverage form for Sean and Rick because they are in
the business of providing transportation by property and passengers by auto.
✔✔Paul left his car at a valet parking garage. When he returned to pick up his car
several hours later, he noticed that there was a large scratch and dent along the driver's
side of the car. Paul asked what happened, and the valet said that based on the signs
posted at the entrance and on the parking receipt, the parking garage disclaimed all
liability. Which one of the following statements is correct regarding this bailment
situation? - ✔✔Many courts would consider this disclaimer an illegal contract issue,
contrary to public policy. In this situation the parking garage is the bailee and owes at
least an ordinary degree of care.
✔✔Chelsea is injured in an accident caused by an uninsured motorist and signs a UM
release. Which one of the following is correct? - ✔✔She must cooperate with her insurer
in pursuing subrogation.
A UM release requires the insured to cooperate with the insurer in pursuing
subrogation.
✔✔Larry owns two trucks and works as an owner-operator. Larry was hired by Carrier A
to transport a trailer of goods from Texas to Maine. Rather than bobtailing back to
Texas, Larry entered into a trip lease to haul a return load of cargo for Carrier Z. Which
one of the following will provide liability coverage for Larry's backhaul trip? - ✔✔Carrier
Z's MCCF would provide the liability coverage for Larry's backhaul trip.
✔✔Carla is evaluating a bodily injury claim for a claimant who was injured in an auto
accident. She is considering the claimant's occupation and wages, age, expected work
, life, life expectancy, education and training, and previous job history. Carla is evaluating
the claimant's damages for - ✔✔Diminished earning capacity. This occurs when
permanent injuries or disabilities prevent claimants from working in the same capacity
as they did before the loss occurred.
✔✔Jackson Manufacturing covers its commercial auto exposure with the Business Auto
Coverage Form (BACF). Because it has operations in several no-fault states, it has
Personal Injury Protection (PIP) endorsements added to its BACF. While the
endorsements vary by state, a typical PIP endorsement provides coverage for all of the
following benefits, EXCEPT: - ✔✔Substitute vehicle expenses
The typical PIP endorsement includes benefits for medical and rehabilitation expenses,
lost wages, and death benefits to survivors. It does not include benefits for substitute
vehicle expenses.
✔✔Jose was injured in an auto accident caused by the other driver. Jose's injuries were
covered by his medical insurance. At trial, the court did not allow the insurer to reduce
Jose's award by the amount his medical insurance paid. Its decision was based on the -
✔✔Collateral source rule. This bars the introduction of evidence that a claimant has
other sources of recover.
✔✔Pete's car is stopped at a red light behind Cindy's car. Tony fails to stop for the red
light, and his car his Pete's car which is then pushed into Cindy's car. Cindy is injured
and all of the cars are damaged. Under joint and several liability, which one of the
following statements is correct? - ✔✔Tony is the lone tortfeasor.
There are no joint tortfeasors.
✔✔James Industries is insured by the Business Auto Coverage Form. The auto policy
includes the Medical Payments endorsement with a $10,000 limit. Lisa, one of the
executives at James Industries, is provided with a private passenger vehicle for
business and personal use. She was in a multi-car accident while driving three clients
from the airport to a meeting at the office. Two of the passengers were injured, one with
medical expenses of $4,500 and the other $9,000. Lisa also suffered a minor injury with
medical expenses of $3,500. How much will the insurer for James Industries pay under
the Medical Payments endorsement? - ✔✔The insure will pay $13,500 ($4,500 +
$9,000) under the Medical Payments endorsement regardless of fault. The $10,000 limit
applies per person and coverage is excluded for employees injured in the course of
employment.
✔✔Seriously injured in an auto accident, Damien accepts a settlement agreement that
offers some immediate payment, with the bulk of the payment disbursed over a number
of years. This is called a(n) - ✔✔A structured settlement gives the claimant some
payment immediately but defers much of the payment into the future.
✔✔All states require that denials be prompt, timely and - ✔✔Fair.
All states require that denials be prompt, timely and fair.
