CIA CIA Loss Estimation & Damage Assessment 1

Question 1

Which method of loss estimation involves comparing the damaged property to recent sales of similar undamaged properties in the same market area?

Accepted Answer

Sales comparison approach

Answer

The sales comparison approach estimates loss by comparing the damaged property to recent sales of similar undamaged properties to determine pre-loss market value.

Question 2

In insurance damage assessment, what does ACV stand for?

Accepted Answer

Actual Cash Value

Answer

ACV stands for Actual Cash Value, which represents the replacement cost of property minus depreciation at the time of loss.

Question 3

A CIA appraiser is estimating fire damage to a commercial building. The primary purpose of a scope of loss document is to:

Accepted Answer

Itemize all damaged components and quantities for repair or replacement

Answer

A scope of loss document itemizes every damaged component with quantities and specifications so that accurate repair or replacement cost estimates can be prepared.

Question 4

Which type of depreciation reflects a loss in property value due to factors outside the property itself, such as neighborhood decline?

Accepted Answer

External obsolescence

Answer

External obsolescence is a loss in value caused by factors outside the property, such as economic shifts, zoning changes, or neighborhood decline.

Question 5

When assessing water damage, a CIA appraiser discovers hidden mold behind walls. This is best classified as:

Accepted Answer

Concealed or secondary damage requiring further investigation

Answer

Mold discovered during assessment is classified as concealed or secondary damage that requires further investigation to determine its scope and cause.

(CIA) Certified Insurance Appraiser Practice Test

(CIA) Certified Insurance Appraiser Practice Test

CIA CIA Loss Estimation & Damage Assessment 1