AIC 304 EXAM QUESTIONS AND
THEIR CORRECT EXPECTED
SOLUTIONS
The insurance-to-value provision often found in
homeowners policies applies only to
A. Property insured under Coverage A--Dwelling.
B. Personal property.
C. Property insured under Coverage A--Dwelling and
Coverage B--Other Structures.
D. Property insured under Coverage B--Other Structures
C
Benjamin is a claims representative handling a
merchandise loss. He needs someone to prepare an
inventory of the damaged goods, verify their value,
preserve damaged items, locate the best market for
salvageable items, and oversee the sale. Benjamin
should hire a(n)
A. Wholesaler.
B. Salvor.
C. Public adjuster.
D. Junk dealer.
B
Philip is a claims representative for Goshen
Insurance. He is working on a motor truck cargo
,(MTC) liability claim and is trying to determine if the
entity facing legal liability for the cargo loss is an
insured under the MTC policy. In addition to the
blanket MTC policy, Philip will need to review which
one of the following?
A. The schedule of vehicles
B. The insured's trip transit policy
C. The schedule of terminals
D. The carrier section of the bill of lading
D
Brenda and Tyrone are homeowners with a monthly
mortgage of $1,200. Their home sustains damage from
a fire, and restoration is expected to take several
months to complete. They rent an apartment with a
monthly rent of $1,500 to occupy during restoration.
Which one of the following statements regarding their
additional living expenses under Coverage D in ISO
homeowners policy forms is most accurate?
A. They would be covered for $2,700, the total of both
their mortgage and the rent on their temporary apartment.
B. They would be covered for $1,500 a month, the full rent
on their temporary apartment.
C. They would be covered for $300 a month, the
difference between their mortgage and temporary monthly
rent.
D. There would be no coverage, as additional living
expenses are provided only if the temporary housing
expense is equal to or less than that of the damaged
property.
, B
Katarina is a claims representative who is discussing
a property loss incident with the insured. She has
asked him if a violent expansion of air occurred, if a
loud noise was reported, and if a sudden and violent
outbreak of physical forces occurred. Katarina is
trying to determine
A. Whether a fire occurred.
B. Grounds for denying the claim.
C. Whether an explosion occurred.
D. Grounds for accepting the claim.
C
Alex is a claims adjuster handling a claim for theft of
covered property. Alex's first step should be to
A. Confirm who owns the property that has been reported
stolen.
B. Determine if theft is a covered loss and identify policy
limitations.
C. Determine who has an insurable interest in the
property.
D. Obtain a police report of the incident.
B
Lamar holds an occurrence-based homeowners policy
from Gamma Insurance with an expiration date of July
31. He decides to switch insurers, and executes a new
policy with Upsilon Insurance to take effect on August
1. On July 12th, a fire damages his home. Repairs are
expected to take several months, during which time
THEIR CORRECT EXPECTED
SOLUTIONS
The insurance-to-value provision often found in
homeowners policies applies only to
A. Property insured under Coverage A--Dwelling.
B. Personal property.
C. Property insured under Coverage A--Dwelling and
Coverage B--Other Structures.
D. Property insured under Coverage B--Other Structures
C
Benjamin is a claims representative handling a
merchandise loss. He needs someone to prepare an
inventory of the damaged goods, verify their value,
preserve damaged items, locate the best market for
salvageable items, and oversee the sale. Benjamin
should hire a(n)
A. Wholesaler.
B. Salvor.
C. Public adjuster.
D. Junk dealer.
B
Philip is a claims representative for Goshen
Insurance. He is working on a motor truck cargo
,(MTC) liability claim and is trying to determine if the
entity facing legal liability for the cargo loss is an
insured under the MTC policy. In addition to the
blanket MTC policy, Philip will need to review which
one of the following?
A. The schedule of vehicles
B. The insured's trip transit policy
C. The schedule of terminals
D. The carrier section of the bill of lading
D
Brenda and Tyrone are homeowners with a monthly
mortgage of $1,200. Their home sustains damage from
a fire, and restoration is expected to take several
months to complete. They rent an apartment with a
monthly rent of $1,500 to occupy during restoration.
Which one of the following statements regarding their
additional living expenses under Coverage D in ISO
homeowners policy forms is most accurate?
A. They would be covered for $2,700, the total of both
their mortgage and the rent on their temporary apartment.
B. They would be covered for $1,500 a month, the full rent
on their temporary apartment.
C. They would be covered for $300 a month, the
difference between their mortgage and temporary monthly
rent.
D. There would be no coverage, as additional living
expenses are provided only if the temporary housing
expense is equal to or less than that of the damaged
property.
, B
Katarina is a claims representative who is discussing
a property loss incident with the insured. She has
asked him if a violent expansion of air occurred, if a
loud noise was reported, and if a sudden and violent
outbreak of physical forces occurred. Katarina is
trying to determine
A. Whether a fire occurred.
B. Grounds for denying the claim.
C. Whether an explosion occurred.
D. Grounds for accepting the claim.
C
Alex is a claims adjuster handling a claim for theft of
covered property. Alex's first step should be to
A. Confirm who owns the property that has been reported
stolen.
B. Determine if theft is a covered loss and identify policy
limitations.
C. Determine who has an insurable interest in the
property.
D. Obtain a police report of the incident.
B
Lamar holds an occurrence-based homeowners policy
from Gamma Insurance with an expiration date of July
31. He decides to switch insurers, and executes a new
policy with Upsilon Insurance to take effect on August
1. On July 12th, a fire damages his home. Repairs are
expected to take several months, during which time
