AIC 304 EXAM 2025 LATEST EXAM QUESTIONS
AND CORRECT ANSWERS | A+ GRADE
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)
A
Insureds who want to suspend the coinsurance provision may do so through
A. The BPP's Agreed Value optional coverage.
B. Engaging a reinsurer.
C. Arbitration with the insurer.
D. The insurance-to-value provision.
A
In a property loss, a list of damaged areas with proposed remediation actions
for each area is called
A. A loss plan.
B. A scope.
,C. An inventory.
D. A checklist.
B
Sho is investigating a large merchandise loss for an insured. He has avoided
making commitments that may waive policy conditions, outlined the claims
handling process, learned how the insured business operates, and inspected the
premises and the damaged merchandise. Which one the following actions by
Sho is part of the preliminary survey?
A. Avoided commitments
B. Inspection of premises
C. Outline of the process
D. Learned the operation
B
B. Magnus is a claims adjuster who has just received a claim for water
damage to a home from a broken pipe. At this point, Magnus' priority is
to
C. A. Make sure the insured has begun the drying process.
B. Send the insured a reservation of rights letter.
C. Obtain a nonwaiver agreement from the insured.
D. Identify any coverage issues and notify the insured.
A
D. Aside from fraud, the two most common policy violations leading to
coverage disputes are an insured's failure to cooperate with the insurer's
investigation and an insured's failure to
E. A. Provide prompt notice of a loss.
B. Understand policy exclusions.
C. Remain up to date on premium payments.
D. Mitigate damages from the loss.
A
,F. Which one of the following statements regarding bailee liability policies is
correct?
G. A. They are written to transfer liability from the property owner to the
bailee.
B. They are written to protect bailees against legal liability for damage to
the property in their care.
C. The property owner is a named insured under the policy.
D. The insurer would make any payment to the property owner, regardless
of liability.
B
H. When a policy calls for the primary/excess method to be used and both
insurers agree which policy is excess and which is primary,
I. A. The primary insurer pays the full loss amount and subrogates for the
excess insurer's portion.
B. The primary and excess insurers place an amount adequate to cover the
loss in escrow.
C. The excess insurer pays first, up to its applicable limit of insurance.
D. The primary insurer pays first, up to its applicable limit of insurance.
D
J. Under the BPP coinsurance provision, if an insured does not carry enough
insurance, loss payments are reduced proportionately, an outcome
known as the
K. A. Coverage adjustment.
B. Underinsurance surcharge.
C. Coinsurance penalty.
D. Insurance-to-value provision.
C
L. A widely used financial institution bond is
M. A. The Insurance Services Office Financial Institution Crime Policy for Banks
and Saving Institutions.
B. The fidelity bond.
C. The commercial general liability fiduciary bond.
, D. Standard Form No. 24.
D
N. Shondra owns a commercial office building and holds an insurance policy
that applies one deductible for most causes of loss but a different, higher
deductible for other specified causes. This is called a(n)
O. A. Conditional deductible.
B. Hybrid deductible.
C. Split deductible.
D. Percentage deductible.
C
P. The agreed value settlement provision establishes the amount the insurer
will pay for a total loss in a property damage claim
Q. A. When determined in a court of law.
B. Immediately upon occurrence of the loss.
C. At the outset of coverage.
D. Upon arbitration of the final loss amount.
C
R. Miyu is adjusting a large claim involving merchandise loss for an insured
business. She has conducted an initial inspection of the premises and the
damaged merchandise, gained a preliminary idea of the scope of damage,
outlined the claims handling process with the insured, and exercised her
right to access the insured's books and records. Which one of the
following of Miyu's actions should reveal whether a complete physical
inventory should be conducted or is even possible?
S. A. Conducting initial inspection
B. Determining scope of damage
C. Accessing books and records
D. Outlining claims handling process
A
T. Most forms of earthquake coverage are subject to a
AND CORRECT ANSWERS | A+ GRADE
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)
A
Insureds who want to suspend the coinsurance provision may do so through
A. The BPP's Agreed Value optional coverage.
B. Engaging a reinsurer.
C. Arbitration with the insurer.
D. The insurance-to-value provision.
A
In a property loss, a list of damaged areas with proposed remediation actions
for each area is called
A. A loss plan.
B. A scope.
,C. An inventory.
D. A checklist.
B
Sho is investigating a large merchandise loss for an insured. He has avoided
making commitments that may waive policy conditions, outlined the claims
handling process, learned how the insured business operates, and inspected the
premises and the damaged merchandise. Which one the following actions by
Sho is part of the preliminary survey?
A. Avoided commitments
B. Inspection of premises
C. Outline of the process
D. Learned the operation
B
B. Magnus is a claims adjuster who has just received a claim for water
damage to a home from a broken pipe. At this point, Magnus' priority is
to
C. A. Make sure the insured has begun the drying process.
B. Send the insured a reservation of rights letter.
C. Obtain a nonwaiver agreement from the insured.
D. Identify any coverage issues and notify the insured.
A
D. Aside from fraud, the two most common policy violations leading to
coverage disputes are an insured's failure to cooperate with the insurer's
investigation and an insured's failure to
E. A. Provide prompt notice of a loss.
B. Understand policy exclusions.
C. Remain up to date on premium payments.
D. Mitigate damages from the loss.
A
,F. Which one of the following statements regarding bailee liability policies is
correct?
G. A. They are written to transfer liability from the property owner to the
bailee.
B. They are written to protect bailees against legal liability for damage to
the property in their care.
C. The property owner is a named insured under the policy.
D. The insurer would make any payment to the property owner, regardless
of liability.
B
H. When a policy calls for the primary/excess method to be used and both
insurers agree which policy is excess and which is primary,
I. A. The primary insurer pays the full loss amount and subrogates for the
excess insurer's portion.
B. The primary and excess insurers place an amount adequate to cover the
loss in escrow.
C. The excess insurer pays first, up to its applicable limit of insurance.
D. The primary insurer pays first, up to its applicable limit of insurance.
D
J. Under the BPP coinsurance provision, if an insured does not carry enough
insurance, loss payments are reduced proportionately, an outcome
known as the
K. A. Coverage adjustment.
B. Underinsurance surcharge.
C. Coinsurance penalty.
D. Insurance-to-value provision.
C
L. A widely used financial institution bond is
M. A. The Insurance Services Office Financial Institution Crime Policy for Banks
and Saving Institutions.
B. The fidelity bond.
C. The commercial general liability fiduciary bond.
, D. Standard Form No. 24.
D
N. Shondra owns a commercial office building and holds an insurance policy
that applies one deductible for most causes of loss but a different, higher
deductible for other specified causes. This is called a(n)
O. A. Conditional deductible.
B. Hybrid deductible.
C. Split deductible.
D. Percentage deductible.
C
P. The agreed value settlement provision establishes the amount the insurer
will pay for a total loss in a property damage claim
Q. A. When determined in a court of law.
B. Immediately upon occurrence of the loss.
C. At the outset of coverage.
D. Upon arbitration of the final loss amount.
C
R. Miyu is adjusting a large claim involving merchandise loss for an insured
business. She has conducted an initial inspection of the premises and the
damaged merchandise, gained a preliminary idea of the scope of damage,
outlined the claims handling process with the insured, and exercised her
right to access the insured's books and records. Which one of the
following of Miyu's actions should reveal whether a complete physical
inventory should be conducted or is even possible?
S. A. Conducting initial inspection
B. Determining scope of damage
C. Accessing books and records
D. Outlining claims handling process
A
T. Most forms of earthquake coverage are subject to a
