AIC 304 LATEST FINAL EXAM ALL QUESTIONS
AND ANSWERS SURE A+
✔✔Agreed value method - ✔✔A method of valuing property in which the insurer and the
insured agree, at the time the policy is written, on the maximum amount that will be paid
in the event of a total loss.
✔✔Annual transit policy - ✔✔Policy that covers all shipments made or received by the
insured throughout a one-year policy period.
✔✔Trip transit policy - ✔✔Policy that covers a particular shipment of goods specified in
the policy.
✔✔Improvements and betterments - ✔✔Alterations or additions made to the building at
the expense of an insured who does not own the building and who cannot legally
remove them.
✔✔Coinsurance - ✔✔An insurance-to-value provision in many property insurance
policies providing that if the property is underinsured, the amount that an insurer will pay
for a covered loss is reduced.
✔✔Insurance-to-value provision - ✔✔A provision in property insurance policies that
encourages insureds to purchase an amount of insurance that is equal to, or close to,
the value of the covered property
, ✔✔Agreed Value optional coverage - ✔✔Optional coverage that suspends the
Coinsurance condition if the insured carries the amount of insurance agreed to by the
insurer and insured.
✔✔Special limits of liability - ✔✔Internal dollar limits on certain specified classes of
property that apply regardless of the overall policy limit.
✔✔Flat deductible - ✔✔A deductible stated in a specified dollar amount.
✔✔Percentage deductible - ✔✔A deductible expressed as a percentage of some other
amount, such as the amount of insurance, the covered property's value, or the amount
of the loss.
✔✔Split deductible - ✔✔A deductible provision that applies one deductible for most
causes of loss but a different, higher deductible for other specified causes of loss.
✔✔Book value (net depreciated value) - ✔✔An asset's historical cost minus
accumulated depreciation.
✔✔Income statement - ✔✔The financial statement that reports an organization's profit
or loss for a specific period by comparing the revenues generated with the expenses
incurred to produce those revenues.
✔✔Balance sheet - ✔✔The financial statement that reports the assets, liabilities, and
owners' equity of an organization as of a specific date.
✔✔Out-of-sight merchandise - ✔✔Merchandise that has been damaged beyond
recognition.
✔✔Cost of goods sold - ✔✔An expense representing the cost of merchandise sold to
customers during the period.
✔✔Cost-to-sales ratio - ✔✔Cost of goods sold divided by retail sales.
✔✔Appraisal - ✔✔A method of resolving disputes between insurers and insureds over
the amount owed on a covered loss.
✔✔Subrogation - ✔✔The process by which an insurer can, after it has paid a loss under
the policy, recover the amount paid from any party (other than the insured) who caused
the loss or is otherwise legally liable for the loss.
✔✔Spoliation of evidence - ✔✔The destruction or significant alteration of physical
evidence.
AND ANSWERS SURE A+
✔✔Agreed value method - ✔✔A method of valuing property in which the insurer and the
insured agree, at the time the policy is written, on the maximum amount that will be paid
in the event of a total loss.
✔✔Annual transit policy - ✔✔Policy that covers all shipments made or received by the
insured throughout a one-year policy period.
✔✔Trip transit policy - ✔✔Policy that covers a particular shipment of goods specified in
the policy.
✔✔Improvements and betterments - ✔✔Alterations or additions made to the building at
the expense of an insured who does not own the building and who cannot legally
remove them.
✔✔Coinsurance - ✔✔An insurance-to-value provision in many property insurance
policies providing that if the property is underinsured, the amount that an insurer will pay
for a covered loss is reduced.
✔✔Insurance-to-value provision - ✔✔A provision in property insurance policies that
encourages insureds to purchase an amount of insurance that is equal to, or close to,
the value of the covered property
, ✔✔Agreed Value optional coverage - ✔✔Optional coverage that suspends the
Coinsurance condition if the insured carries the amount of insurance agreed to by the
insurer and insured.
✔✔Special limits of liability - ✔✔Internal dollar limits on certain specified classes of
property that apply regardless of the overall policy limit.
✔✔Flat deductible - ✔✔A deductible stated in a specified dollar amount.
✔✔Percentage deductible - ✔✔A deductible expressed as a percentage of some other
amount, such as the amount of insurance, the covered property's value, or the amount
of the loss.
✔✔Split deductible - ✔✔A deductible provision that applies one deductible for most
causes of loss but a different, higher deductible for other specified causes of loss.
✔✔Book value (net depreciated value) - ✔✔An asset's historical cost minus
accumulated depreciation.
✔✔Income statement - ✔✔The financial statement that reports an organization's profit
or loss for a specific period by comparing the revenues generated with the expenses
incurred to produce those revenues.
✔✔Balance sheet - ✔✔The financial statement that reports the assets, liabilities, and
owners' equity of an organization as of a specific date.
✔✔Out-of-sight merchandise - ✔✔Merchandise that has been damaged beyond
recognition.
✔✔Cost of goods sold - ✔✔An expense representing the cost of merchandise sold to
customers during the period.
✔✔Cost-to-sales ratio - ✔✔Cost of goods sold divided by retail sales.
✔✔Appraisal - ✔✔A method of resolving disputes between insurers and insureds over
the amount owed on a covered loss.
✔✔Subrogation - ✔✔The process by which an insurer can, after it has paid a loss under
the policy, recover the amount paid from any party (other than the insured) who caused
the loss or is otherwise legally liable for the loss.
✔✔Spoliation of evidence - ✔✔The destruction or significant alteration of physical
evidence.
