AIC 304 EXAM QUESTIONS WITH
CORRECT ANSWERS
Scope |- |CORRECT |ANSWER✔✔-A |list |of |the |areas |damaged |that |includes |the |type |of |damage, |
a |description |of |the |proposed |action |to |take |regarding |the |damaged |property |(such |as |repair, |
replace, |remove, |or |demolish), |and |the |area's |measurements.
Nonwaiver |agreement |- |CORRECT |ANSWER✔✔-A |signed |agreement |indicating |that |during |the |
course |of |investigation, |neither |the |insurer |nor |the |insured |waives |rights |under |the |policy
Insurable |interest |- |CORRECT |ANSWER✔✔-An |interest |in |the |subject |of |an |insurance |policy |
that |is |not |unduly |remote |and |that |would |cause |the |interested |party |to |suffer |financial |loss |if |
an |insured |event |occurred.
Bailee |- |CORRECT |ANSWER✔✔-The |party |temporarily |possessing |the |personal |property |in |a |
bailment.
Trustee |- |CORRECT |ANSWER✔✔-Someone |who |has |the |legal |title |to |a |property |but |is |
responsible |for |ensuring |that |it |be |used, |handled, |and |transferred |solely |for |the |benefit |of |the |
beneficiary.
Security |interest |- |CORRECT |ANSWER✔✔-An |interest |in |property |(real |or |personal) |that |allows
|the |property |to |be |sold |on |default |to |satisfy |the |debt |for |which |the |security |interest |was |
given.
Public |adjuster |- |CORRECT |ANSWER✔✔-An |outside |organization |or |person |hired |by |an |insured
|to |represent |the |insured |in |a |claim |in |exchange |for |a |fee.
,Business |income |insurance |- |CORRECT |ANSWER✔✔-Insurance |that |covers |the |reduction |in |an |
organization's |income |when |operations |are |interrupted |by |damage |to |property |caused |by |a |
covered |peril.
Business |interruption |- |CORRECT |ANSWER✔✔-Loss |of |revenue |that |a |business |or |another |
organization |sustains |because |its |operations |are |suspended |as |a |result |of |physical |injury |to |its |
property
Net |income |- |CORRECT |ANSWER✔✔-The |difference |between |revenues |(such |as |money |
received |for |goods |or |services) |and |expenses |(such |as |money |paid |for |merchandise, |rent, |and |
insurance).
Profit |- |CORRECT |ANSWER✔✔-Net |income |that |results |when |revenues |exceed |expenses.
Net |loss |- |CORRECT |ANSWER✔✔-Net |income |that |results |when |expenses |exceed |revenues.
Continuing |expenses |- |CORRECT |ANSWER✔✔-Expenses |that |continue |to |be |incurred |during |a |
business |interruption.
Noncontinuing |expenses |- |CORRECT |ANSWER✔✔-Expenses |that |will |not |continue |during |a |
business |interruption.
Extra |expenses |- |CORRECT |ANSWER✔✔-Expenses, |in |addition |to |ordinary |expenses, |that |an |
organization |incurs |to |mitigate |the |effects |of |a |business |interruption.
Inland |marine |insurance |- |CORRECT |ANSWER✔✔-Insurance |that |covers |many |different |classes |
of |property |that |typically |involve |an |element |of |transportation |on |land.
, Marine |insurance |- |CORRECT |ANSWER✔✔-Insurance |that, |in |the |U.S., |includes |both |ocean |
and |inland |marine |coverage |and, |in |the |rest |of |the |world, |is |limited |to |insurance |for |vessels |
and |cargo.
Nationwide |Marine |Definition |- |CORRECT |ANSWER✔✔-Statement |of |the |types |of |property |
that |may |be |insured |on |inland |marine |and |ocean |marine |insurance |forms.
Origin |and |cause |expert |- |CORRECT |ANSWER✔✔-An |expert |who |independently |determines |
where |and |how |a |fire |began.
Incendiary |fire |- |CORRECT |ANSWER✔✔-An |intentionally |set |fire.
Trailer |- |CORRECT |ANSWER✔✔-Fuel |configured |in |a |manner |to |spread |a |fire.
Alibi |- |CORRECT |ANSWER✔✔-An |assertion |that |the |party |in |question |was |elsewhere |at |the |
time |the |crime |occurred.
Specified |perils |- |CORRECT |ANSWER✔✔-A |method |of |designating |the |covered |perils |(causes |of
|loss) |in |a |property |insurance |policy |by |naming |them |in |the |policy.
Open |perils |- |CORRECT |ANSWER✔✔-A |method |of |designating |covered |perils |(causes |of |loss) |in
|a |property |insurance |policy |by |covering |direct |physical |loss |unless |the |policy |excludes |it.
Theft |- |CORRECT |ANSWER✔✔-The |taking |of |personal |property |from |its |rightful |owner, |without
|the |owner's |consent, |with |the |intent |to |deprive |the |owner |of |its |value.
Period |of |restoration |- |CORRECT |ANSWER✔✔-The |period |during |which |business |income |loss |is
|covered |under |the |BIC |forms; |it |begins |72 |hours |after |the |physical |loss |occurs |and |ends |when |
the |property |is |(or |should |have |been) |restored |to |use |with |reasonable |speed. |(With |regard |to |
extra |expense |coverage, |it |begins |immediately |after |the |physical |loss |occurs.)
CORRECT ANSWERS
Scope |- |CORRECT |ANSWER✔✔-A |list |of |the |areas |damaged |that |includes |the |type |of |damage, |
a |description |of |the |proposed |action |to |take |regarding |the |damaged |property |(such |as |repair, |
replace, |remove, |or |demolish), |and |the |area's |measurements.
Nonwaiver |agreement |- |CORRECT |ANSWER✔✔-A |signed |agreement |indicating |that |during |the |
course |of |investigation, |neither |the |insurer |nor |the |insured |waives |rights |under |the |policy
Insurable |interest |- |CORRECT |ANSWER✔✔-An |interest |in |the |subject |of |an |insurance |policy |
that |is |not |unduly |remote |and |that |would |cause |the |interested |party |to |suffer |financial |loss |if |
an |insured |event |occurred.
Bailee |- |CORRECT |ANSWER✔✔-The |party |temporarily |possessing |the |personal |property |in |a |
bailment.
Trustee |- |CORRECT |ANSWER✔✔-Someone |who |has |the |legal |title |to |a |property |but |is |
responsible |for |ensuring |that |it |be |used, |handled, |and |transferred |solely |for |the |benefit |of |the |
beneficiary.
Security |interest |- |CORRECT |ANSWER✔✔-An |interest |in |property |(real |or |personal) |that |allows
|the |property |to |be |sold |on |default |to |satisfy |the |debt |for |which |the |security |interest |was |
given.
Public |adjuster |- |CORRECT |ANSWER✔✔-An |outside |organization |or |person |hired |by |an |insured
|to |represent |the |insured |in |a |claim |in |exchange |for |a |fee.
,Business |income |insurance |- |CORRECT |ANSWER✔✔-Insurance |that |covers |the |reduction |in |an |
organization's |income |when |operations |are |interrupted |by |damage |to |property |caused |by |a |
covered |peril.
Business |interruption |- |CORRECT |ANSWER✔✔-Loss |of |revenue |that |a |business |or |another |
organization |sustains |because |its |operations |are |suspended |as |a |result |of |physical |injury |to |its |
property
Net |income |- |CORRECT |ANSWER✔✔-The |difference |between |revenues |(such |as |money |
received |for |goods |or |services) |and |expenses |(such |as |money |paid |for |merchandise, |rent, |and |
insurance).
Profit |- |CORRECT |ANSWER✔✔-Net |income |that |results |when |revenues |exceed |expenses.
Net |loss |- |CORRECT |ANSWER✔✔-Net |income |that |results |when |expenses |exceed |revenues.
Continuing |expenses |- |CORRECT |ANSWER✔✔-Expenses |that |continue |to |be |incurred |during |a |
business |interruption.
Noncontinuing |expenses |- |CORRECT |ANSWER✔✔-Expenses |that |will |not |continue |during |a |
business |interruption.
Extra |expenses |- |CORRECT |ANSWER✔✔-Expenses, |in |addition |to |ordinary |expenses, |that |an |
organization |incurs |to |mitigate |the |effects |of |a |business |interruption.
Inland |marine |insurance |- |CORRECT |ANSWER✔✔-Insurance |that |covers |many |different |classes |
of |property |that |typically |involve |an |element |of |transportation |on |land.
, Marine |insurance |- |CORRECT |ANSWER✔✔-Insurance |that, |in |the |U.S., |includes |both |ocean |
and |inland |marine |coverage |and, |in |the |rest |of |the |world, |is |limited |to |insurance |for |vessels |
and |cargo.
Nationwide |Marine |Definition |- |CORRECT |ANSWER✔✔-Statement |of |the |types |of |property |
that |may |be |insured |on |inland |marine |and |ocean |marine |insurance |forms.
Origin |and |cause |expert |- |CORRECT |ANSWER✔✔-An |expert |who |independently |determines |
where |and |how |a |fire |began.
Incendiary |fire |- |CORRECT |ANSWER✔✔-An |intentionally |set |fire.
Trailer |- |CORRECT |ANSWER✔✔-Fuel |configured |in |a |manner |to |spread |a |fire.
Alibi |- |CORRECT |ANSWER✔✔-An |assertion |that |the |party |in |question |was |elsewhere |at |the |
time |the |crime |occurred.
Specified |perils |- |CORRECT |ANSWER✔✔-A |method |of |designating |the |covered |perils |(causes |of
|loss) |in |a |property |insurance |policy |by |naming |them |in |the |policy.
Open |perils |- |CORRECT |ANSWER✔✔-A |method |of |designating |covered |perils |(causes |of |loss) |in
|a |property |insurance |policy |by |covering |direct |physical |loss |unless |the |policy |excludes |it.
Theft |- |CORRECT |ANSWER✔✔-The |taking |of |personal |property |from |its |rightful |owner, |without
|the |owner's |consent, |with |the |intent |to |deprive |the |owner |of |its |value.
Period |of |restoration |- |CORRECT |ANSWER✔✔-The |period |during |which |business |income |loss |is
|covered |under |the |BIC |forms; |it |begins |72 |hours |after |the |physical |loss |occurs |and |ends |when |
the |property |is |(or |should |have |been) |restored |to |use |with |reasonable |speed. |(With |regard |to |
extra |expense |coverage, |it |begins |immediately |after |the |physical |loss |occurs.)
