Insurance Product Knowledge Flashcards
7 cards from real AFIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance Product Knowledge flashcards as text
A customer's VSC requires repairs be authorized before work begins. The repair shop starts work without getting authorization. What is the most likely outcome?
Answer: The claim may be denied because prior authorization is a condition of coverage
Prior authorization is typically a contractual requirement, and failure to obtain it before repairs begin can result in full or partial claim denial.
Which statement about 'disappearing deductibles' on a VSC is accurate?
Answer: The deductible amount decreases or is waived when the customer returns to the selling dealer for repairs
Disappearing (or reduced) deductibles incentivize customers to return to the selling dealer for warranty repairs by waiving or reducing the deductible when repairs are done in-house.
An F&I manager sells a Key Replacement product. Which scenario would this product most likely cover?
Answer: The cost to replace and reprogram a lost or stolen proximity key fob
Key Replacement products are designed to cover the high cost of replacing and programming modern transponder or proximity key fobs, which can cost hundreds of dollars at a dealership.
Under a typical VSC, which of the following components would most likely be classified as a 'consequential damage' scenario?
Answer: A failed oil pump causes internal engine damage that would not have occurred otherwise
Consequential damage occurs when a covered component's failure causes damage to another component; a failed oil pump leading to engine damage is a classic example.
What does the term 'penetration rate' mean in an F&I context?
Answer: The percentage of vehicle deals on which a specific F&I product is sold
Penetration rate measures how often a particular product is sold relative to total vehicle deals, expressed as a percentage.
A Windshield Protection product is presented to a customer. Which damage scenario is MOST likely covered?
Answer: A chip caused by road debris that can be repaired without full windshield replacement
Windshield protection products typically cover road hazard chips and cracks that can be repaired using resin injection, and in some cases cover full replacement if repair is not possible.
A customer asks why their VSC claim was reduced from the repair shop's invoice amount. The administrator paid based on 'book time' rather than actual hours. What does this mean?
Answer: The administrator reimbursed labor based on a standardized time guide (e.g., Alldata, Mitchell) rather than the actual hours the technician spent
VSC administrators typically pay labor reimbursement based on industry-standard time guides, which may differ from the actual time a shop records, potentially leaving a gap the customer must cover.