AIC 304 QUESTIONS AND ANSWERS
The insurance-to-value provision often found in homeowners policies applies only to -
Answers :A. Property insured under Coverage A--Dwelling.
B. Personal property.
C. Property insured under Coverage A--Dwelling and Coverage B--Other Structures.
D. Property insured under Coverage B--Other Structures
C
Benjamin is a claims representative handling a merchandise loss. He needs someone
to prepare an inventory of the damaged goods, verify their value, preserve damaged
items, locate the best market for salvageable items, and oversee the sale. Benjamin
should hire a(n) - Answers :A. Wholesaler.
B. Salvor.
C. Public adjuster.
D. Junk dealer.
B
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? - Answers :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
D
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? -
Answers :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.
, B
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 - Answers :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 - Answers :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? - Answers :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 - Answers :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? - Answers :A. Invoice price
The insurance-to-value provision often found in homeowners policies applies only to -
Answers :A. Property insured under Coverage A--Dwelling.
B. Personal property.
C. Property insured under Coverage A--Dwelling and Coverage B--Other Structures.
D. Property insured under Coverage B--Other Structures
C
Benjamin is a claims representative handling a merchandise loss. He needs someone
to prepare an inventory of the damaged goods, verify their value, preserve damaged
items, locate the best market for salvageable items, and oversee the sale. Benjamin
should hire a(n) - Answers :A. Wholesaler.
B. Salvor.
C. Public adjuster.
D. Junk dealer.
B
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? - Answers :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
D
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? -
Answers :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.
, B
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 - Answers :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 - Answers :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? - Answers :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 - Answers :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? - Answers :A. Invoice price
