AIC 302 EXAMINATION ANSWERS AND QUESTIONS
SET A+
✔✔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.
✔✔While driving a rental car, Arthur has an accident and is found to have been
intoxicated. Which one of the following scenarios regarding primary coverage is likely to
occur? - ✔✔His PAP would become primary.
Most rental car agreements will void coverage in the case of impaired driving, so the
insured's PAP would become primary.
✔✔In handling an auto claim, subrogation by an insurer may be warranted if - ✔✔The
insured party is paid by the insurer and a party other than the insured is at fault.
✔✔Goshen Trucking is insured under a Motor Carrier Coverage Form (MCCF). It has a
lease agreement with owner-operator Anthony to use his trucks to haul cargo for
Goshen Trucking during its peak seasons. The lease agreement does not include a hold
harmless requirement. Which one of the following is correct regarding the coverage that
will be provided for Anthony under Goshen Trucking's MCCF? - ✔✔Anthony is
automatically a named insured under Goshen's MCCF while driving his trucks as part of
Goshen Trucking's operations under the lease agreement.
✔✔Luis is completing an impairment rating report for a patient. This includes the
anticipated effect of the medical condition on the patient's daily activities, a comparison
of clinical findings with the AMA guide's criteria, his conclusion on whether the medical
condition will result in incapacitation, and the expected recovery date and prediction of
full or partial recovery. Which one of the following is a component of Luis's report
relating to the impairment criteria? - ✔✔Comparison of clinical findings with the AMA
guide's criteria relates to the impairment criteria.
✔✔Joe insures his auto under a personal auto policy (PAP) with Part C-Uninsured
Motorists (UM) split limits of $25,000/$100,000/$10,000. He is struck by a hit-and-run
driver while driving his children to school. Joe was seriously injured with $20,000 in
SET A+
✔✔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.
✔✔While driving a rental car, Arthur has an accident and is found to have been
intoxicated. Which one of the following scenarios regarding primary coverage is likely to
occur? - ✔✔His PAP would become primary.
Most rental car agreements will void coverage in the case of impaired driving, so the
insured's PAP would become primary.
✔✔In handling an auto claim, subrogation by an insurer may be warranted if - ✔✔The
insured party is paid by the insurer and a party other than the insured is at fault.
✔✔Goshen Trucking is insured under a Motor Carrier Coverage Form (MCCF). It has a
lease agreement with owner-operator Anthony to use his trucks to haul cargo for
Goshen Trucking during its peak seasons. The lease agreement does not include a hold
harmless requirement. Which one of the following is correct regarding the coverage that
will be provided for Anthony under Goshen Trucking's MCCF? - ✔✔Anthony is
automatically a named insured under Goshen's MCCF while driving his trucks as part of
Goshen Trucking's operations under the lease agreement.
✔✔Luis is completing an impairment rating report for a patient. This includes the
anticipated effect of the medical condition on the patient's daily activities, a comparison
of clinical findings with the AMA guide's criteria, his conclusion on whether the medical
condition will result in incapacitation, and the expected recovery date and prediction of
full or partial recovery. Which one of the following is a component of Luis's report
relating to the impairment criteria? - ✔✔Comparison of clinical findings with the AMA
guide's criteria relates to the impairment criteria.
✔✔Joe insures his auto under a personal auto policy (PAP) with Part C-Uninsured
Motorists (UM) split limits of $25,000/$100,000/$10,000. He is struck by a hit-and-run
driver while driving his children to school. Joe was seriously injured with $20,000 in
