AIC 304 PRACTICE TEST 2026: 100
QUESTIONS & CORRECT ANSWERS –
SUCCESSFULLY EVALUATING
PROPERTY CLAIMS
1. Alex is a claims adjuster handling a claim for theft of covered property. Alex's first
step should be to:
A. Confirm who owns the property that has been reported stolen.
B. Determine if theft is a covered loss and identify policy limitations.
C. Determine who has an insurable interest in the property.
D. Obtain a police report of the incident.
Correct Answer: B
2. Francesca is handling a claim for theft of property. She has asked the insured to
provide documentation of the theft of his television. The insured provided copies of
the warranty, the instruction manual, a photo of the television in his house, and the
original receipt. Which one of the following pieces of documentation provided by the
policyholder does Francesca consider to be the best?
A. Photograph
B. Instruction manual
C. Warranty
D. Original receipt
Correct Answer: D
3. Adam is adjusting a claim for fire damage to insured property and has gathered
the following facts: multiple fires were involved; the building typically contained
flammable materials; the insured's full warehouse of inventory was damaged; and the
fire protection system sounded normally. Which one of Adam's findings could lead
him to believe the fire was incendiary?
A. Flammable materials
B. Fire protection system
C. Damaged inventory
D. Multiple fires
Correct Answer: D
4. Mia has submitted a claim to her property insurer for damage to her building
caused by fire. In order for her claim to progress, Mia's duties include:
A. Completing a nonwaiver agreement, production of documents, and examination
under oath.
,B. Submission of proof of loss, completing a nonwaiver agreement, and examination
under oath.
C. Submission of proof of loss, production of documents, and completing a
nonwaiver agreement.
D. Submission of proof of loss, production of documents, and examination under
oath.
Correct Answer: D
5. Virtually all insurance policies have an option to repair or replace property instead
of paying a claim, and that decision always rests with:
A. The insured.
B. The state insurance commissioner's office.
C. An arbitrator.
D. The insurer.
Correct Answer: D
6. The most challenging part of the catastrophe-response process for an insurer is:
A. Having adequate reserves to pay numerous losses.
B. Getting to the site.
C. Denying claims for causes that are excluded.
D. Providing adequate staff.
Correct Answer: D
7. In the states that do not require licensure, public adjusting is:
A. Subject to the same qualification requirements as those of a claims representative.
B. Allowed only in losses totaling $100,000 or less.
C. Allowed only on a flat-fee basis.
D. Considered an unauthorized practice of law.
Correct Answer: D
8. Greene Café rents retail space on the first floor of an office building. Greene Café's
Commercial General Liability (CGL) Coverage Form provides "fire legal liability" or
"damage to premises rented to you". The "fire legal liability" coverage:
A. Applies to both real and personal property in the Greene's care, custody, and
control.
B. Provides for a broad range of perils when the property is rented over seven
consecutive days.
C. Excludes coverage for premises temporarily used by Greene Café.
D. Provides limited coverage for liability arising out of the part of the building rented
to Greene.
Correct Answer: D
9. In business income insurance, the expenses that an organization would not have
incurred if the business interruption had not occurred are called:
, A. Continuing expenses.
B. Excludable expenses.
C. Extra expenses.
D. Contingent expenses.
Correct Answer: C
10. Paris Cuisine, a fine-dining restaurant, rents space in a commercial building,
which is insured by its owner. Paris Cuisine spends $50,000 on wallpaper, floor
coverings, windows, and other improvements that would remain in the building if
Paris Cuisine were to move out. Paris Cuisine's interest in these improvements is
insured under which one of the following?
A. The business personal property section of Paris Cuisine's BPP
B. The leasehold improvements section of the building owner's BPP
C. The property of others section of the building owner's BPP
D. The building portion of Paris Cuisine's Building and Personal Property Coverage
Form (BPP)
Correct Answer: A
11. Philip is a claims representative for Goshen Insurance. He is working on a motor
truck cargo (MTC) liability claim and is trying to determine if the entity facing legal
liability for the cargo loss is an insured under the MTC policy. In addition to the
blanket MTC policy, Philip will need to review which one of the following?
A. The schedule of vehicles
B. The insured's trip transit policy
C. The schedule of terminals
D. The carrier section of the bill of lading
Correct Answer: D
12. Brenda and Tyrone are homeowners with a monthly mortgage of $1,200. Their
home sustains damage from a fire, and restoration is expected to take several
months to complete. They rent an apartment with a monthly rent of $1,500 to
occupy during restoration. Which one of the following statements regarding their
additional living expenses under Coverage D in ISO homeowners policy forms is
most accurate?
A. They would be covered for $2,700, the total of both their mortgage and the rent
on their temporary apartment.
B. They would be covered for $1,500 a month, the full rent on their temporary
apartment.
C. They would be covered for $300 a month, the difference between their mortgage
and temporary monthly rent.
D. There would be no coverage, as additional living expenses are provided only if the
temporary housing expense is equal to or less than that of the damaged property.
Correct Answer: B
QUESTIONS & CORRECT ANSWERS –
SUCCESSFULLY EVALUATING
PROPERTY CLAIMS
1. Alex is a claims adjuster handling a claim for theft of covered property. Alex's first
step should be to:
A. Confirm who owns the property that has been reported stolen.
B. Determine if theft is a covered loss and identify policy limitations.
C. Determine who has an insurable interest in the property.
D. Obtain a police report of the incident.
Correct Answer: B
2. Francesca is handling a claim for theft of property. She has asked the insured to
provide documentation of the theft of his television. The insured provided copies of
the warranty, the instruction manual, a photo of the television in his house, and the
original receipt. Which one of the following pieces of documentation provided by the
policyholder does Francesca consider to be the best?
A. Photograph
B. Instruction manual
C. Warranty
D. Original receipt
Correct Answer: D
3. Adam is adjusting a claim for fire damage to insured property and has gathered
the following facts: multiple fires were involved; the building typically contained
flammable materials; the insured's full warehouse of inventory was damaged; and the
fire protection system sounded normally. Which one of Adam's findings could lead
him to believe the fire was incendiary?
A. Flammable materials
B. Fire protection system
C. Damaged inventory
D. Multiple fires
Correct Answer: D
4. Mia has submitted a claim to her property insurer for damage to her building
caused by fire. In order for her claim to progress, Mia's duties include:
A. Completing a nonwaiver agreement, production of documents, and examination
under oath.
,B. Submission of proof of loss, completing a nonwaiver agreement, and examination
under oath.
C. Submission of proof of loss, production of documents, and completing a
nonwaiver agreement.
D. Submission of proof of loss, production of documents, and examination under
oath.
Correct Answer: D
5. Virtually all insurance policies have an option to repair or replace property instead
of paying a claim, and that decision always rests with:
A. The insured.
B. The state insurance commissioner's office.
C. An arbitrator.
D. The insurer.
Correct Answer: D
6. The most challenging part of the catastrophe-response process for an insurer is:
A. Having adequate reserves to pay numerous losses.
B. Getting to the site.
C. Denying claims for causes that are excluded.
D. Providing adequate staff.
Correct Answer: D
7. In the states that do not require licensure, public adjusting is:
A. Subject to the same qualification requirements as those of a claims representative.
B. Allowed only in losses totaling $100,000 or less.
C. Allowed only on a flat-fee basis.
D. Considered an unauthorized practice of law.
Correct Answer: D
8. Greene Café rents retail space on the first floor of an office building. Greene Café's
Commercial General Liability (CGL) Coverage Form provides "fire legal liability" or
"damage to premises rented to you". The "fire legal liability" coverage:
A. Applies to both real and personal property in the Greene's care, custody, and
control.
B. Provides for a broad range of perils when the property is rented over seven
consecutive days.
C. Excludes coverage for premises temporarily used by Greene Café.
D. Provides limited coverage for liability arising out of the part of the building rented
to Greene.
Correct Answer: D
9. In business income insurance, the expenses that an organization would not have
incurred if the business interruption had not occurred are called:
, A. Continuing expenses.
B. Excludable expenses.
C. Extra expenses.
D. Contingent expenses.
Correct Answer: C
10. Paris Cuisine, a fine-dining restaurant, rents space in a commercial building,
which is insured by its owner. Paris Cuisine spends $50,000 on wallpaper, floor
coverings, windows, and other improvements that would remain in the building if
Paris Cuisine were to move out. Paris Cuisine's interest in these improvements is
insured under which one of the following?
A. The business personal property section of Paris Cuisine's BPP
B. The leasehold improvements section of the building owner's BPP
C. The property of others section of the building owner's BPP
D. The building portion of Paris Cuisine's Building and Personal Property Coverage
Form (BPP)
Correct Answer: A
11. Philip is a claims representative for Goshen Insurance. He is working on a motor
truck cargo (MTC) liability claim and is trying to determine if the entity facing legal
liability for the cargo loss is an insured under the MTC policy. In addition to the
blanket MTC policy, Philip will need to review which one of the following?
A. The schedule of vehicles
B. The insured's trip transit policy
C. The schedule of terminals
D. The carrier section of the bill of lading
Correct Answer: D
12. Brenda and Tyrone are homeowners with a monthly mortgage of $1,200. Their
home sustains damage from a fire, and restoration is expected to take several
months to complete. They rent an apartment with a monthly rent of $1,500 to
occupy during restoration. Which one of the following statements regarding their
additional living expenses under Coverage D in ISO homeowners policy forms is
most accurate?
A. They would be covered for $2,700, the total of both their mortgage and the rent
on their temporary apartment.
B. They would be covered for $1,500 a month, the full rent on their temporary
apartment.
C. They would be covered for $300 a month, the difference between their mortgage
and temporary monthly rent.
D. There would be no coverage, as additional living expenses are provided only if the
temporary housing expense is equal to or less than that of the damaged property.
Correct Answer: B
