Download AIC 304 Successfully Evaluating Property study guide solution version 2 and more Exams Advanced Education in PDF only on Docsity!
AIC 304 Successfully Evaluating Property Claims study guide solution version 2
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.
A
Greene Café rents retail space on the first floor of an office building. Greene Café's a Commercial General Liability (CGL) Coverage Form provides "fire legal liability" or "damage to premises rented to you". The "fire legal liability" coverage - A. Applies to both real and personal property in the Greene's care, custody, and control. B. Provides for a broad range of perils when the property is rented over seven consecutive days. C. Excludes coverage for premises temporarily used by Greene Café. D. Provides limited coverage for liability arising out of the part of the building rented to Greene. D In business income insurance, the expenses that an organization would not have incurred if the business interruption had not occurred are called - A. Continuing expenses. B. Excludable expenses. C. Extra expenses. D. Contingent expenses. C Adam is adjusting a claim for fire damage to insured property and has gathered the following facts: multiple fires were involved; the building typically contained flammable materials; the insured's full warehouse of inventory was damaged; and the fire protection system sounded normally. Which one of Adam's findings could lead him to believe the fire was incendiary? - A. Flammable materials B. Fire protection system C. Damaged inventory D. Multiple fires
D
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 are referred to as - A. Improvements and betterments. B. Leaseholder enhancements. C. Personal property of others. D. Building fixtures and fittings. A Francesca is handling a claim for theft of property. She has asked the insured to provide documentation of the theft of his television. The insured provided copies of the warranty, the instruction manual, a photo of the television in his house, and the original receipt. Which one of the following pieces of documentation provided by the policyholder does Francesca considers to be the best? - A. Photograph B. Instruction manual C. Warranty D. Original receipt D The Loss Determination condition in the ISO Business Income (and Extra Expense) Coverage Form and the ISO Extra Expense Coverage Form states that the amount of extra expense consists of all expenses in excess of normal operating expenses. From this total, the insurer deducts - A. The salvage value of temporary property. B. Property taxes for a temporary location. C. Payroll costs for temporary labor. D. Utility costs for a temporary location.
A
After a potentially responsible third party is identified, a claims rep should investigate the potential opportunity for subrogation - A. At the same time as the loss investigation. B. Upon presenting a settlement amount to the insured. C. After the loss is settled. D. After the loss investigation is complete A A contractors equipment policy insuring oil or natural gas well-drilling rigs would require coverage for which one of the following perils in addition to the specified perils coverage typically provided? - A. Explosion B. Squeeze C. Cratering D. Cave-in C A claims rep is most likely to use the book value method to determine cost of goods sold for a loss involving - A. Merchandise stored at multiple locations. B. Antiques or other hard-to-value items. C. Suspected arson. D. Out-of-sight merchandise. D
Shelton Manufacturing has an annual transit policy to cover the goods that it ships from its manufacturing facility to its buyers. Which one of the following methods would be used for the valuation of goods damaged while in transit? - A. The actual cost value B. The amount indicated on the invoice excluding the shipping charges C. The replacement cost value D. The amount indicated on the invoice including the shipping charges D Public adjusters are most often involved in - A. Water damage claims. B. Fire claims. C. Workers' compensation claims. D. Liability claims. B Market valuation is particularly useful in an insurance loss when an object - A. Has no real replacement cost. B. Is especially new. C. Is an easily-replaced commodity. D. Is a car or other vehicle. A In what way are the Peak Season and Value Reporting Form endorsements similar? - A. Both forms provide a way to avoid over-insuring or under-insuring fluctuating merchandise values. B. Both forms are used for seasonal type business operations.
C. Book value. D. Net profit. 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 - 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 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 - 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 Which one of the following statements regarding bailee liability policies is correct? - 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
When a policy calls for the primary/excess method to be used and both insurers agree which policy is excess and which is primary, - 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 Under the BPP coinsurance provision, if an insured does not carry enough insurance, loss payments are reduced proportionately, an outcome known as the - A. Coverage adjustment. B. Underinsurance surcharge. C. Coinsurance penalty. D. Insurance-to-value provision. C A widely used financial institution bond is - 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
Most forms of earthquake coverage are subject to a - A. Hybrid deductible. B. Split deductible. C. Percentage deductible. D. Flat deductible. C To identify affected areas and every insured in those areas immediately following a catastrophe, insurers will typically - A. Engage independent adjusters. B. Gather details from online news reporting. C. Survey insureds electronically or by phone. D. Deploy an initial survey team D Retail Store insures its business personal property under a Building and Personal Property Coverage Form (BPP) with a value reporting form. The limit of insurance is $1,000,000 and the deductible is $5,000. On December 21, a fire destroyed the store and the personal property. The store's last reported value on November 30 was $750,000. Assuming that the last report of values was accurate, how much would the insurer pay for the store's personal property loss which amounted to $700,000? - A. $648, B. $653, C. $695, D. $700, C
Which one of the following is most accurate regarding courts' determination of whether an insured's notice of loss is unreasonably late and unexcused? - A. Courts generally consider claims reported after more than 30 days to be unreasonably late. B. Most courts consider late notice unexcused unless caused by a disability due to the loss. C. The interpretation of what is unreasonably late and unexcused varies by state. D. Courts generally agree that most policy language clearly resolves such issues. C Mitsuki is adjusting a property claim for a covered building from damage that occurred during a major storm. There is evidence of damage from wind, hail, wind-driven rain, fire, storm surge, and flooding. Which one of the following sets of damages would indicate to Mitsuki that a hurricane was involved? - A. Wind, wind-driven rain, storm surge, and extreme temperatures B. Wind, wind-driven rain, fire, and flooding C. Wind, wind-driven rain, storm surge, and flooding D. Wind, hail, storm surge, and flooding C Adam is a professional who is involved in a claim for fire damage. To ensure he uses proper methodology, he is considering the following factors: Was the scene adequately investigated and documented with diagrams and photos? Was the point of origin definitively established? Has the source of ignition been identified? What events led to the fire starting? Was all of the available evidence securely collected? Were all of the witnesses interviewed in a comprehensive fashion? Adam is a - A. Fire fighter. B. Police officer. C. Fire investigator. D. Claims representative.
C
Alva is adjusting a homeowner's claim for fire damage. The policyholder had a collection of rare antiques that were damaged in the fire. Alva is unfamiliar with the damaged items, so to help her determine the amount of the loss she employs a(n) - A. Origin and cause expert. B. Fire investigator. C. Public adjuster. D. Antiques appraiser. D In general terms, a subrogation clause requires the insured to - A. Engage legal counsel. B. Cooperate with the insurer. C. Identify any responsible third parties. D. Waive their right to recover. B In the HO-3 policy, Coverage A—Dwelling coverage applies to three broad categories of covered property. One of these broad categories is - A. Structures attached to the dwelling. B. Structures separated by a clear space. C. Additional living expense. D. Personal property that is owned. A
Which one of the following loss scenarios would be most likely to require review of an insured's general ledger, banking records and tax statements? - A. A windstorm damages the plate glass windows of a coffee shop. The damage is quickly repaired and the shop reopens the next day. B. A clothing store's stockroom inventory is damaged due to water from a broken pipe. C. An insured claims loss of business income following a gas leak in the area that forced the store to close for several days. D. A fallen tree damages the exterior of a retail store. C
