AIC 301 EXAM: LATEST A+ QUESTIONS AND ANSWERS
BREAKDOWN
For a claimant, the claim negotiation process includes three phases: the crisis phase, the motivation
phase and the bargaining phase. In the motivation phase
The claimant may consider exaggerating the loss.
Claim representative's negotiation strategies and tactics can vary based on the relative importance of
the negotiation variables and the claim representative's ability to influence those variables. Which
one of the following negotiation variables is the most significant for claim representatives?
Sufficient authority to settle the claim and the number of alternatives available for a satisfactory claim
settlement
Which one of the following statements is correct with respect to techniques claim representatives can
use when negotiating with claimants' representatives?
For many claims, the best time to settle with a claimant's attorney is just before the claim becomes a
lawsuit.
The Principle of Yes is based on the premise that
If an individual answers "yes" to a question, he or she is likely to continue to answer "yes" to subsequent
questions.
Which one of the following techniques can help smooth negotiations with unrepresented claimants?
Making the first offer to help the claimant understand the value of the claim
Daniel, a claim representative, has been trying to settle a fire claim with Alva, the claimant. Alva did
not agree with the proposed settlement of $25,000 so she hired a public adjuster to negotiate for her.
The public adjuster asks Daniel to make a concession to settle the claim quickly because Alva wants to
have the repairs done by her son who is home for two weeks. If Daniel will agree to settle the claim
quickly, Alva will settle for $28,000. Generally, in a negotiation, Daniel should make concessions for
one of three reasons. Which one of the following would be a reason to make a concession?
New information that affects the claim value has become available.
Which one of the following is correct with respect to the negotiation technique of choicing?
Select one:
A. It is based on the principle that if someone is presented with a choice of possible solutions, none of
those choices is presumably the correct one.
B. The drawback of choicing is that the claim representative spends significant time in the process.
C. It is based on the assumption that people feel empowered when given a choice.
D. The claim representative first presents the next best desirable choice, which becomes a basis of
comparison, making the next choice more appealing.
It is based on the assumption that people feel empowered when given a choice.
,Making the first offer in a claim negotiation is best done by the claim representative when
Negotiating with an unrepresented claimant.
A liability claim representative negotiated a settlement with a claimant who fell inside a department
store. The claims representative valued the case at $5,000. When she approached the claimant with
the offer, the claimant felt the case was worth $10,000. Without any facts of the case changing, the
representative then counteroffered $7,500 to the claimant. What negotiation pitfall is this?
Trading dollars
The statute of limitations on a claim is quickly approaching. With this in mind, the claims
representative decided to settle the case for a value much higher than it is worth. The claims
representative should have
Worked more quickly to settle the claim sooner.
Mary is negotiating settlement of an auto theft claim with an insured. The standard industry reference
book used in auto theft losses indicates the value of the insured's vehicle, given its age and condition
at the time of the loss, is between $7,500 and $9,500. Mary offers a settlement amount of $8,500. The
insured makes a counter-offer of $12,500. Mary counters with an offer of $10,500. This is an example
of
Trading dollars.
A claim negotiation technique that generally should not be used by claim representatives is called
trading dollars. Which one of the following sentences best describes a negotiating technique known as
trading dollars?
Claim representatives barter on the amount in dispute, not considering the facts of the claim.
Oscar is an insurance company workers compensation claim representative handling a claim for an
injured employee, Maria. During a telephone conversation, Oscar informs Maria that the company
physician has agreed to release her to full duty in three days and she can return to her job. Maria, who
is enjoying time away from her employment, begins arguing with Oscar in an uncontrolled manner.
She threatens that if Oscar does not give her three additional weeks off, she will hire an attorney to
represent her. Which one of the negotiation pitfalls should Oscar avoid in this situation?
Oscar should avoid personalities to influence a settlement.
Which one of the following negotiation styles seeks both to obtain the best outcome and to achieve
rapport with the other party?
The win-win negotiation style seeks both to obtain the best outcome and to achieve rapport with the
other party.
Claim representatives may use the win-lose style of negotiation
in resolving claims that appear to involve fraud.
, Claim representatives can adopt one of four distinct negotiation styles during claim negotiations with
a claimant. The choice of style used is determined by the negotiator's concern for obtaining
The best outcome while achieving rapport.
After preparation, the next step in the negotiation process is
Develop and evaluate alternative outcomes.
In the final step of the negotiation process, successful negotiators recognize the need to
Make concessions to create appropriate resolutions.
Which one of the following channels of communication may be the least significant aspect of
communication?
words
In claim negotiations, a claimant's need for money in order to return to normal is a major variable that
determines
How the claim representative should approach negotiations.
On a Sunday afternoon, there was a storm in Riko's neighborhood. Lightning struck her garden shed
causing significant damage. She filed an insurance claim seeking payment for damages. Two weeks
later, the claim representative telephoned Riko to begin the claim negotiating process. During the
discussion Riko exhibited adversarial behavior and appeared to be inflating the value of the garden
shed. This type of motivation may be directly related to
The time it took the claim representative to contact Riko.
Which one of the following is correct with respect to the negotiation technique of choicing?
Select one:
A. The drawback of choicing is that the claim representative spends significant time in the process.
B. It is based on the principle that if someone is presented with a choice of possible solutions, none of
those choices is presumably the correct one.
C. It is based on the assumption that people feel empowered when given a choice.
D. The claim representative first presents the next best desirable choice, which becomes a basis of
comparison, making the next choice more appealing.
it is based on the assumption that people feel empowered when given a choice.
Which one of the following is correct pertaining to a claim representative negotiating with an
unrepresented claimant?
Select one:
A. The claim representative should collect and use extraneous information to use in settling the claim.
B. The claim representative should remember that money is the foremost need of an unrepresented
claimant.
C. The claim representative should always allow the unrepresented claimant to make the first offer of
settlement.
D. The claim representative should avoid using sales techniques in settling the claim.
BREAKDOWN
For a claimant, the claim negotiation process includes three phases: the crisis phase, the motivation
phase and the bargaining phase. In the motivation phase
The claimant may consider exaggerating the loss.
Claim representative's negotiation strategies and tactics can vary based on the relative importance of
the negotiation variables and the claim representative's ability to influence those variables. Which
one of the following negotiation variables is the most significant for claim representatives?
Sufficient authority to settle the claim and the number of alternatives available for a satisfactory claim
settlement
Which one of the following statements is correct with respect to techniques claim representatives can
use when negotiating with claimants' representatives?
For many claims, the best time to settle with a claimant's attorney is just before the claim becomes a
lawsuit.
The Principle of Yes is based on the premise that
If an individual answers "yes" to a question, he or she is likely to continue to answer "yes" to subsequent
questions.
Which one of the following techniques can help smooth negotiations with unrepresented claimants?
Making the first offer to help the claimant understand the value of the claim
Daniel, a claim representative, has been trying to settle a fire claim with Alva, the claimant. Alva did
not agree with the proposed settlement of $25,000 so she hired a public adjuster to negotiate for her.
The public adjuster asks Daniel to make a concession to settle the claim quickly because Alva wants to
have the repairs done by her son who is home for two weeks. If Daniel will agree to settle the claim
quickly, Alva will settle for $28,000. Generally, in a negotiation, Daniel should make concessions for
one of three reasons. Which one of the following would be a reason to make a concession?
New information that affects the claim value has become available.
Which one of the following is correct with respect to the negotiation technique of choicing?
Select one:
A. It is based on the principle that if someone is presented with a choice of possible solutions, none of
those choices is presumably the correct one.
B. The drawback of choicing is that the claim representative spends significant time in the process.
C. It is based on the assumption that people feel empowered when given a choice.
D. The claim representative first presents the next best desirable choice, which becomes a basis of
comparison, making the next choice more appealing.
It is based on the assumption that people feel empowered when given a choice.
,Making the first offer in a claim negotiation is best done by the claim representative when
Negotiating with an unrepresented claimant.
A liability claim representative negotiated a settlement with a claimant who fell inside a department
store. The claims representative valued the case at $5,000. When she approached the claimant with
the offer, the claimant felt the case was worth $10,000. Without any facts of the case changing, the
representative then counteroffered $7,500 to the claimant. What negotiation pitfall is this?
Trading dollars
The statute of limitations on a claim is quickly approaching. With this in mind, the claims
representative decided to settle the case for a value much higher than it is worth. The claims
representative should have
Worked more quickly to settle the claim sooner.
Mary is negotiating settlement of an auto theft claim with an insured. The standard industry reference
book used in auto theft losses indicates the value of the insured's vehicle, given its age and condition
at the time of the loss, is between $7,500 and $9,500. Mary offers a settlement amount of $8,500. The
insured makes a counter-offer of $12,500. Mary counters with an offer of $10,500. This is an example
of
Trading dollars.
A claim negotiation technique that generally should not be used by claim representatives is called
trading dollars. Which one of the following sentences best describes a negotiating technique known as
trading dollars?
Claim representatives barter on the amount in dispute, not considering the facts of the claim.
Oscar is an insurance company workers compensation claim representative handling a claim for an
injured employee, Maria. During a telephone conversation, Oscar informs Maria that the company
physician has agreed to release her to full duty in three days and she can return to her job. Maria, who
is enjoying time away from her employment, begins arguing with Oscar in an uncontrolled manner.
She threatens that if Oscar does not give her three additional weeks off, she will hire an attorney to
represent her. Which one of the negotiation pitfalls should Oscar avoid in this situation?
Oscar should avoid personalities to influence a settlement.
Which one of the following negotiation styles seeks both to obtain the best outcome and to achieve
rapport with the other party?
The win-win negotiation style seeks both to obtain the best outcome and to achieve rapport with the
other party.
Claim representatives may use the win-lose style of negotiation
in resolving claims that appear to involve fraud.
, Claim representatives can adopt one of four distinct negotiation styles during claim negotiations with
a claimant. The choice of style used is determined by the negotiator's concern for obtaining
The best outcome while achieving rapport.
After preparation, the next step in the negotiation process is
Develop and evaluate alternative outcomes.
In the final step of the negotiation process, successful negotiators recognize the need to
Make concessions to create appropriate resolutions.
Which one of the following channels of communication may be the least significant aspect of
communication?
words
In claim negotiations, a claimant's need for money in order to return to normal is a major variable that
determines
How the claim representative should approach negotiations.
On a Sunday afternoon, there was a storm in Riko's neighborhood. Lightning struck her garden shed
causing significant damage. She filed an insurance claim seeking payment for damages. Two weeks
later, the claim representative telephoned Riko to begin the claim negotiating process. During the
discussion Riko exhibited adversarial behavior and appeared to be inflating the value of the garden
shed. This type of motivation may be directly related to
The time it took the claim representative to contact Riko.
Which one of the following is correct with respect to the negotiation technique of choicing?
Select one:
A. The drawback of choicing is that the claim representative spends significant time in the process.
B. It is based on the principle that if someone is presented with a choice of possible solutions, none of
those choices is presumably the correct one.
C. It is based on the assumption that people feel empowered when given a choice.
D. The claim representative first presents the next best desirable choice, which becomes a basis of
comparison, making the next choice more appealing.
it is based on the assumption that people feel empowered when given a choice.
Which one of the following is correct pertaining to a claim representative negotiating with an
unrepresented claimant?
Select one:
A. The claim representative should collect and use extraneous information to use in settling the claim.
B. The claim representative should remember that money is the foremost need of an unrepresented
claimant.
C. The claim representative should always allow the unrepresented claimant to make the first offer of
settlement.
D. The claim representative should avoid using sales techniques in settling the claim.
