AIC 304 STUDY QUESTIONS WITH
CORRECT ANSWERS
The |insurance-to-value |provision |often |found |in |homeowners |policies |applies |only |to |- |
CORRECT |ANSWER✔✔-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)
|- |CORRECT |ANSWER✔✔-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? |- |CORRECT |ANSWER✔✔-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? |- |CORRECT |ANSWER✔✔-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 |- |
CORRECT |ANSWER✔✔-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 |- |CORRECT |ANSWER✔✔-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? |- |CORRECT |ANSWER✔✔-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 |- |CORRECT |ANSWER✔✔-A. |Cross-checking.
B. |Auditing.
C. |Expense |verification.
D. |Reconciliation.
CORRECT ANSWERS
The |insurance-to-value |provision |often |found |in |homeowners |policies |applies |only |to |- |
CORRECT |ANSWER✔✔-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)
|- |CORRECT |ANSWER✔✔-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? |- |CORRECT |ANSWER✔✔-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? |- |CORRECT |ANSWER✔✔-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 |- |
CORRECT |ANSWER✔✔-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 |- |CORRECT |ANSWER✔✔-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? |- |CORRECT |ANSWER✔✔-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 |- |CORRECT |ANSWER✔✔-A. |Cross-checking.
B. |Auditing.
C. |Expense |verification.
D. |Reconciliation.
