AIC 300 (QUESTIONS + ANSWERS)
SOLVED 100% CORRECT!!
What qualities do effective statements exhibit? - Answer-• Coherence—The statement
follows a logical sequence • Completeness—The statement is thorough • Objectivity—
The statement contains facts relevant to the loss expressed in the interviewee's own
words
Jenny is in an automobile accident and files a claim. What information should the claims
representative consider when investigating the accident scene? - Answer-Tire tracks,
curves in the road, and objects or conditions that may interfere with a driver's view or
cause an accident (such as a pothole)
Freja files a workers compensation claim. What type of an investigation should the
claims representative conduct and why? - Answer-Medical investigation. This helps the
claims representative determine the costs of medical treatment, the expected duration
of treatment and disability, the need for rehabilitation, and the suitability of medical care
for the type of injuries the claimant suffered.
While working on an auto collision claim, Lois, a claims representative, adds a remark
regarding gender in the claims file. Is this remark appropriate? - Answer-Remarks
regarding the gender of claimants or insureds are not appropriate for inclusion in a
claims file.
Linnea, a new claims representative, wants to know what elements should be reflected
in claims file status notes? What would you tell her? - Answer-• Clear, concise, and
accurate information • Timely claims handling • A fair and balanced investigation that
considers the insured's and insurer's interests • Objective comments about the insurer,
insured, or other parties associated with the claim • A thorough good-faith investigation
Why is establishing and maintaining adequate reserves important? - Answer-If a claims
representative doesn't set accurate case reserves, it could affect the financial health of
the insurer for which he or she works. In extreme cases, inaccurate reserving could
cause insolvency.
What is the formula method of setting claim reserves? - Answer-With the formula
method of setting claim reserves, a formula for setting a reserve is determined by the
insurer and is automatically created for the claims rep based on the facts of a claim.
What is stairstepping a reserve? - Answer-A claims rep may set a modest initial reserve
but then raise the reserve by a few thousand dollars to issue payments. Later, the
reserve is increased again when more bills arrive.
,Who does an insurance policy typically cover? - Answer-Some policies cover only
insureds named or listed in the policy. However, most policies define "insured" to cover
additional persons, such as family members of the named insured who reside in the
home
What should Kolby, a claims representative, do to determine whether a cause of loss is
covered? - Answer-Kolby should thoroughly investigate all the facts concerning the loss
and apply them to the language in all the policy provisions. He must also carefully read
the exclusions to find possible coverage exceptions and analyze policy definitions.
Eduardo is the insured in a liability claim. What are the damages for which he may be
liable? - Answer-Punitive and compensatory damages. Punitive damages punish a
wrongdoer for a reckless, malicious, or deceitful act with the purpose of deterring similar
conduct. Compensatory damages include special damages and general damages.
What must a claims representative do before making any payments? - Answer-The
claims representative must verify all the policy limits applicable to a loss before making
any payments to ensure that payment falls within the available limits of coverage.
How can claim payments be made? - Answer-Check, bank draft, or electronic transfer
of funds
What are some issues claims personnel must be aware of when issuing claim
payments? - Answer-When issuing claim payments, claims personnel must ensure that
the proper parties are being paid. Many other parties, such as mortgagees on homes
and loss payees on autos and personal property, can have a financial interest in
property. Claims reps must also check various databases to ensure that the claim
payment complies with federal and state laws. Insurers and other claims payors must
also be aware of state child-support enforcement initiatives. And claims reps handling
workers compensation claims and third-party bodily injury claims must be aware of the
Medicare Secondary Payer Program and how it can affect claim payments.
What are two negotiation techniques that Magnus, a claims representative, can use to
negotiate with any party? - Answer-• Principle of yes—Magnus should begin
negotiations with a question that will generate a "yes" answer, which increases the
likelihood of getting a "yes" to subsequent questions. • Choicing—Magnus should first
present the choice the other party will find least desirable, making the next choice more
appealing.
Hanna, a claims representative, is negotiating with John, an unrepresented claimant.
What are two techniques Hanna can use? Collecting and using extraneous information:
- Answer-Hanna can collect and use extraneous information about the claim, John, and
John's wants and needs that will help her develop a creative settlement. Hanna can get
clues through information provided by John during conversations that reveal his
education level, understanding of the claims process, lifestyle, hobbies, and other
interests.
, Hanna, a claims representative, is negotiating with John, an unrepresented claimant.
What are two techniques Hanna can use? Making the first offer: - Answer-In
negotiations with John, it may be best for Hanna to make the initial offer. As an
unrepresented claimant, John may not know the value of the claim, which could lead
him to suggest an inflated settlement amount.
If the allegations in the complaint do not appear to be covered under the applicable
policy, what should the claims rep do? - Answer-If the allegations in the complaint do
not appear to be covered under the applicable policy, the claims rep should discuss the
coverage issue with coverage counsel before taking any other action and should follow
any insurer procedures, such as requesting a managerial review.
A claims rep receives a summons and complaint. It alleges that the insured caused a
motor vehicle accident in which the plaintiff was injured and demands $800,000 in
damages. The insured's personal auto policy has a $100,000 liability limit. The claims
rep has determined that the policy covers the allegations and has referred the lawsuit to
defense counsel. What additional action does the claims rep need to take? - Answer-If it
appears that the damages could exceed the limits of the insured's policy, the claims rep
should notify the insured in an excess letter, which may also serve to inform the insured
that he or she has the option of hiring separate defense counsel.
Mary is a claims rep who is not actively engaged in litigation or trial preparations. Why is
it a good idea for Mary to read up on case law and court opinions related to the types of
claims she usually handles? - Answer-Mary may find it helpful to stay abreast of recent
court opinions and changes in case law related to the types of claims she usually
handles so she knows how specific types of claims and legal defenses are likely to be
dealt with in the courtroom moving forward.
Victor is an insured defendant in a lawsuit that alleges negligence on his part for failing
to stop at a red light, which caused a traffic accident resulting in a serious head injury to
the plaintiff, Max. Defense counsel proposes filing a motion to dismiss the lawsuit before
the start of the trial. How should the claims rep respond to the defense counsel's
proposal? - Answer-The claims rep should ask the defense counsel what basis will be
used for the motion to dismiss. Unless a good legal basis exists, the claims rep should
recommend against it because of the expense in filing a motion that is virtually certain to
be denied and the risk of sanctions for filing a frivolous motion. The claims rep should
also consider asking to review the intended motion before it's filed to determine its merit.
What is an example of a technology that can glean insights from data collected from
Internet of Things (IoT) and telematics devices? - Answer-Artificial intelligence (AI)
What can telematics in automobiles assist with? - Answer-By tracking and measuring an
automobile's acceleration, speed, braking, distance traveled, and other actions,
telematics can assist claims reps by providing detailed information about an insured's
behavior behind the wheel.
