AIC 302 SIMULATED EXAM QUESTIONS AND ANSWERS | GRADED A+ | LATEST VERSION 2026

AIC 302 SIMULATED EXAM QUESTIONS AND ANSWERS | GRADED A+ | LATEST VERSION 2026 Conor is handling an auto claim involving the death of a minor child in a state that recognizes the intrinsic value of children. Conor's proposed settlement amount will include - answer-A calculated value of the child's future services to the parents. A calculated value of the child's future services to the parents. Intrinsic value of children is the assumption that parents invest in children knowing that they will provide for them when they are older Cristobal has several methods available to him as he evaluates the settlement range for his claim: individual case method, roundtable technique, formula method, and expert system. Which method should Cristobal use if he is dealing with a minor soft tissue claim and wants a simple approach to achieve an early, mutually agreeable settlement? - answer-Formula method involves a mathematical formula set by actuaries to set reserves. Anna injured her back in a not-at-fault auto accident and has a bodily injury claim with the other driver's insurance company. Later, she fell and her back injury was aggravated. Her claims representative for the first accident told her that the aggravation of her back injury - answer-Was covered because it was an unavoidable consequence of the back injury. An intervening problem is covered if it is an unavoidable consequence of the first injury. Some personal auto policies provide that someone could reasonably expect to be allowed to use an insured's vehicle even if they did not ask specifically, such as a relative visiting from out of town. This is called - answer-Implied permission.Some policies provide for implied permission for the use of an insured's auto. In determining coverage for emotional injury, a claims rep must understand applicable policy language. Which one of the following is correct? - answer-The term "harm" is potentially broader than the term "injury" in determining coverage for emotional injury. Mehmet was seriously injured in an automobile collision and died after a stay in the hospital. His family is bringing a survival action claim for medical expenses, pain and suffering, loss of earnings, and automobile repairs. Which one of the following claims will be allowed only if the family can demonstrate that Mehmet was conscious after the accident but before dying? - answer-Pain and suffering can only be claimed if the decedent was conscious of the pain and suffering before dying. Claims reps can isolate specific coverage issues that should be investigated to determine whether exclusions apply by using a series of yes-or-no questions in the form of a - answer-Decision tree. Claims reps can isolate specific coverage issues that should be investigated to determine whether exclusions apply by using a series of yes-or-no questions in the form of a decision tree. Caitlin was involved in a multi-car accident on a highway. The claims representative for her insurance company is making a case that distracted driving by Mike, one of the other drivers involved in the accident, was a contributing cause of the accident. The records indicate that Mike was using a hands-free device at the time of the accident. Which one of the following statements is true regarding the use of a hands-free device while driving? - answer-The use of a hands-free device while driving can lead to a cognitive distraction. Sean is an auto liability claims representative. He is working on a claim involving an insured driver who rear-ended another vehicle while driving in heavy traffic. No one was injured, but there was $3,400 in damage to the other vehicle. Which one of thefollowing statements is correct regarding this accident? - answer-All four elements of negligence exist in this accident. There was a duty owed to others to operate the vehicle safely, that duty was breached, and was the proximate cause of the resulting $3,400 in damages. There is no clear evidence of negligence per se provided. Hilltop Auto Dealership (Hilltop) is insured by the Auto Dealers Coverage Form (ADCF) with a $4 million limit for physical damage coverage on a nonreporting basis. The dealership experienced a fire loss that resulted in $100,000 in damage to the dealer's covered autos. The actual value of the inventory of covered autos at the time of the loss was $5 million. How much will Hilltop's ADCF insurer pay for this covered loss? Disregard any deductibles that may apply. - answer-$80,000 Hilltop's insurer will pay $80,000 for this covered loss. The policy limit was 80% ($4 million/$5 million) of the actual value at the time of the loss, so the insurer will only pay 80% of the loss. $100,000 x .80 = $80,000 A technician repairing auto damage must replace a body panel as well as the running light/turn signal mounted within the panel. The replacement of the light assembly is called a(n) - answer-Included operation. An included operation is any operation completed in its entirety while another, concurrent, operation is performed. One of the primary questions that must be answered in investigating an emotional injury claim is whether, under the applicable policy, emotional distress is considered a(n) - answer-Bodily injury. Mark was involved in a rear-end collision on a highway, and is likely liable for not keeping a clear, assured distance from the other vehicle. Joe, a passenger in the other vehicle, suffered a serious head injury when his head hit the windshield. Mark's auto insurer is trying to defend against the claim by arguing that the head injury would not have occurred if Joe had been wearing his seat belt, as is required by law. Based on the laws that apply in most states, the lack-of-seat-belt defense will result in which one of the following? - answer-Joe's failure to wear a seat belt will not diminish or minimize Mark's liability.When a claim involves a minor, the claims rep must resolve two independent claims: the minor's claim for damages resulting from injury and - answer-The parent's or guardian's claim to recover medical expenses. When a claim involves a minor, the claims rep must resolve two independent claims: the minor's claim for damages resulting from injury and the parent's or guardian's claim to recover medical expenses incurred for the minor's care. Sean and Rick live in a large city. They own 5 SUVs and provide discounted services to students at a number of the colleges in the area. They transport students between campus and the airport and local train stations. They also will transport the students' belongings and deliver them right to their rooms or apartments. Which one of the following is the appropriate auto coverage form for Sean and Rick? - answer-The Motor Carrier Coverage Form is correct coverage form for Sean and Rick because they are in the business of providing transportation by property and passengers by auto. Paul left his car at a valet parking garage. When he returned to pick up his car several hours later, he noticed that there was a large scratch and dent along the driver's side of the car. Paul asked what happened, and the valet said that based on the signs posted at the entrance and on the parking receipt, the parking garage disclaimed all liability. Which one of the following statements is correct regarding this bailment situation? - answer-Many courts would consider this disclaimer an illegal contract issue, contrary to public policy. In this situation the parking garage is the bailee and owes at least an ordinary degree of care. Chelsea is injured in an accident caused by an uninsured motorist and signs a UM release. Which one of the following is correct? - answer-She must cooperate with her insurer in pursuing subrogation. A UM release requires the insured to cooperate with the insurer in pursuing subrogation. Larry owns two trucks and works as an owner-operator. Larry was hired by Carrier A to transport a trailer of goods from Texas to Maine. Rather than bobtailing back to Texas, Larry entered into a trip lease to haul a return load of cargo for Carrier Z. Which one of the following will provide liability coverage for Larry's backhaul trip? - answerCarrier Z's MCCF would provide the liability coverage for Larry's backhaul trip.Carla is evaluating a bodily injury claim for a claimant who was injured in an auto accident. She is considering the claimant's occupation and wages, age, expected work life, life expectancy, education and training, and previous job history. Carla is evaluating the claimant's damages for - answer-Diminished earning capacity. This occurs when permanent injuries or disabilities prevent claimants from working in the same capacity as they did before the loss occurred. Jackson Manufacturing covers its commercial auto exposure with the Business Auto Coverage Form (BACF). Because it has operations in several no-fault states, it has Personal Injury Protection (PIP) endorsements added to its BACF. While the endorsements vary by state, a typical PIP endorsement provides coverage for all of the following benefits, EXCEPT: - answer-Substitute vehicle expenses The typical PIP endorsement includes benefits for medical and rehabilitation expenses, lost wages, and death benefits to survivors. It does not include benefits for substitute vehicle expenses. Jose was injured in an auto accident caused by the other driver. Jose's injuries were covered by his medical insurance. At trial, the court did not allow the insurer to reduce Jose's award by the amount his medical insurance paid. Its decision was based on the - answer-Collateral source rule. This bars the introduction of evidence that a claimant has other sources of recover. Pete's car is stopped at a red light behind Cindy's car. Tony fails to stop for the red light, and his car his Pete's car which is then pushed into Cindy's car. Cindy is injured and all of the cars are damaged. Under joint and several liability, which one of the following statements is correct? - answer-Tony is the lone tortfeasor. There are no joint tortfeasors. James Industries is insured by the Business Auto Coverage Form. The auto policy includes the Medical Payments endorsement with a $10,000 limit. Lisa, one of the executives at James Industries, is provided with a private passenger vehicle for business and personal use. She was in a multi-car accident while driving three clientsfrom the airport to a meeting at the office. Two of the passengers were injured, one with medical expenses of $4,500 and the other $9,000. Lisa also suffered a minor injury with medical expenses of $3,500. How much will the insurer for James Industries pay under the Medical Payments endorsement? - answer-The insure will pay $13,500 ($4,500 + $9,000) under the Medical Payments endorsement regardless of fault. The $10,000 limit applies per person and coverage is excluded for employees injured in the course of employment. Seriously injured in an auto accident, Damien accepts a settlement agreement that offers some immediate payment, with the bulk of the payment disbursed over a number of years. This is called a(n) - answer-A structured settlement gives the claimant some payment immediately but defers much of the payment into the future.