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AIC 304 Study Questions and Answers Latest
Update 2025 Newest Version Grade A+
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Katarina is a claims representative who is discussing a property loss incident with the
insured. She has asked him if a violent expansion of air occurred, if a loud noise was
reported, and if a sudden and violent outbreak of physical forces occurred. Katarina is
trying to determine
A. Whether a fire occurred.
B. Grounds for denying the claim.
C. Whether an explosion occurred.
D. Grounds for accepting the claim.
C
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.
B
Lamar holds an occurrence-based homeowners policy from Gamma Insurance with an
expiration date of July 31. He decides to switch insurers, and executes a new policy with
Upsilon Insurance to take effect on August 1. On July 12th, a fire damages his home.
Repairs are expected to take several months, during which time Lamar will need to rent
an apartment. Which one of the following states how his additional living expenses claim
for the apartment rent will be handled?
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A. Gamma Insurance will pay the rent in full.
B. Upsilon Insurance will pay the rent in full.
C. The total amount of the living expenses will be divided equally between Gamma
Insurance and Upsilon Insurance.
D. Gamma Insurance will pay the rent until July 31, with Upsilon Insurance assuming
payments on August 1.
A
The process of reviewing actual incurred expenses and partial sales against projections
done before the end of the loss period is called
A. Cross-checking.
B. Auditing.
C. Expense verification.
D. Reconciliation.
D
Annual transit policies and trip transit policies typically use which one of the following
methods to value shipments between a seller and a buyer?
A. Invoice price
B. Original cost
C. Selling price
D. Market value
A
Greene Café rents retail space on the first floor of an office building. Greene Café's a
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
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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.
D
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.
C
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
D
Alterations or additions made to the building at the expense of an insured who does not
own the building and who cannot legally remove them are referred to as
A. Improvements and betterments.
B. Leaseholder enhancements.
AIC 304 Study Questions and Answers Latest
Update 2025 Newest Version Grade A+
______________________________________________________
Katarina is a claims representative who is discussing a property loss incident with the
insured. She has asked him if a violent expansion of air occurred, if a loud noise was
reported, and if a sudden and violent outbreak of physical forces occurred. Katarina is
trying to determine
A. Whether a fire occurred.
B. Grounds for denying the claim.
C. Whether an explosion occurred.
D. Grounds for accepting the claim.
C
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.
B
Lamar holds an occurrence-based homeowners policy from Gamma Insurance with an
expiration date of July 31. He decides to switch insurers, and executes a new policy with
Upsilon Insurance to take effect on August 1. On July 12th, a fire damages his home.
Repairs are expected to take several months, during which time Lamar will need to rent
an apartment. Which one of the following states how his additional living expenses claim
for the apartment rent will be handled?
,2|Page
A. Gamma Insurance will pay the rent in full.
B. Upsilon Insurance will pay the rent in full.
C. The total amount of the living expenses will be divided equally between Gamma
Insurance and Upsilon Insurance.
D. Gamma Insurance will pay the rent until July 31, with Upsilon Insurance assuming
payments on August 1.
A
The process of reviewing actual incurred expenses and partial sales against projections
done before the end of the loss period is called
A. Cross-checking.
B. Auditing.
C. Expense verification.
D. Reconciliation.
D
Annual transit policies and trip transit policies typically use which one of the following
methods to value shipments between a seller and a buyer?
A. Invoice price
B. Original cost
C. Selling price
D. Market value
A
Greene Café rents retail space on the first floor of an office building. Greene Café's a
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
, 3|Page
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.
D
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.
C
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
D
Alterations or additions made to the building at the expense of an insured who does not
own the building and who cannot legally remove them are referred to as
A. Improvements and betterments.
B. Leaseholder enhancements.
