AIC 30 EXAM REVIEW QUESTIONS WITH CORRECT DETAILED ANSWERS (GRADED A+)
General Damages - Answer-a monetary award to compensate a victim for "qualitative" injuries such as pain and suffering, scar tissue, loss of consortium.
Punitive (Exemplary) Damages - Answer-designed to punish and prevent f...
AIC 30 EXAM REVIEW QUESTIONS
WITH CORRECT DETAILED
ANSWERS (GRADED A+)
General Damages - Answer-a monetary award to compensate a victim for "qualitative"
injuries such as pain and suffering, scar tissue, loss of consortium.
Punitive (Exemplary) Damages - Answer-designed to punish and prevent further
deceitful, reckless, or malicious actions. As they are designed to punish, they need to
bear any relationship to the party's actual damages.
Coinsurance Clause - Answer-requires the insured to carry insurance equal to at least a
specified percentage of the insured property value.
ADR - Alternative Dispute Resolution - Answer-Procedures to help settle disputes
without litigation.
Ex: Arbitration, formal appraisal, mini-trial, summary jury trials, and mediation. (or
negotiation, but no dispute)
Mediation - Answer-facilitated negotiation - nonbinding. An alternative to going into
litigation, used when negotiation breaks down.
Arbitration - Answer-An ADR, when disputing parties agree to select a neutral or
proceed to an organization that provides an arbitrator to act as a judge. this outside
party issues a ruling, and is binding and final.
Appraisal Clause - Answer-ADR option that prescribes their expert, our expert and the
experts select a neutral they feel is an expert in the field. The matter is discussed, and
when any 2 of the 3 agree, the matter is selected and is binding and final.
Mini-Trial - Answer-ADR - the case undergoes an abbreviated version of a trial before a
panel or an advisor who poses questions, and offers opinions on the outcome of a trial
based on the evidence presented.
Both sides may participate, but they do not have to.
The goal is to show the strengths and weaknesses before trial, and in so doing aid in a
negotiated agreement
Summary Jury Trial (Mock Jury Trial) - Answer-ADR in which disputing parties
participate in an abbreviated trial, presenting evidence of a few witness to a panel of
Mock Jurors who decide the case. (non binding) Again, show weaknesses and facilities
negotiation.
, Reserve - Answer-the amount the insurer estimates and sets aside to pay on a claim
that has not been settled
Individual Case Method - Answer-the adjuster sets the reserve based on the facts of the
case, and the adjusters experience with similar claims
Roundtable Method - Answer-a method of setting a reserve by having two or more
individuals review the file, discuss and develop a consensus for the reserve
Average Value Method - Answer-a predetermined reserve is established for each claim
as it is reported. Some will be over that amount, some will be under. It is an average
expected payment amount
Formula Method - Answer-a reserve is set by using a mathematical formula. Applies a
relationship for amount of medical treatment received, wage loss, etc. Using the total of
those, developing an amount of compensation.
Proof of Loss - Answer-a statement of facts related to the loss for which the insured is
making a claim. (condition of the policy)
IME - Independent Medical Examination - Answer-a direct intervention, at the request of
the insurer - the injured party must attend as a condition of the policy, an exam by a like
specialty, to provide a history and allow a physical exam to determine if the treatment is
medically necessary, and related to the insured loss, and if further treatment is required
Expert System - Answer-Using a software application to set a reserve based on
information entered
IBNR - Incurred But Not Reported - Answer-claims in which the loss has happened but
they have not as yet been reported.
Loss Ratio Method - Answer-to set a reserve for losses that have been incurred but not
reported, the insurer establishes a reserve based on the anticipated losses over a
period of time for a certain type of insurance
Spoliation of evidence - Answer-a violation of the duty to preserve evidence, for
possible pending future litigation. the loss or destruction has to be the fault of the
accused party. Jurors will be instructed to view the "missing" evidence in the worst
possible light.
Spoliation defenses - Answer-was not relevant to the case, can be reconstructed, a
reasonable opportunity to examine the evidence was made before it was destroyed.
Direct Question - Answer-answered by yes or no
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