CAIB 2 EXAM Questions and Answers (2024/2025)(Verified Answers)
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Course
CAIB
Institution
CAIB
CAIB 2 EXAM Questions and Answers (2024/2025)(Verified Answers)
Scheduled Coverage
refers to policy on which coverage is provided only on that property which is specifically identified or scheduled.
All Property
refers to policy used to insure building, stock and equipment under a single li...
CAIB 2 EXAM Questions and Answers
(2024/2025)(Verified Answers)
Scheduled Coverage
refers to policy on which coverage is provided only on that property which is specifically identified or
scheduled.
All Property
refers to policy used to insure building, stock and equipment under a single limit of insurance.
Tenants Improvements
building improvements, alterations and betterments made at the expense of or purchased by the
insured to a building occupied by the insured and which are not otherwise insured, provided the
insured is not the actual owner of such building
Actual cash value
the replacement or repair cost less depreciation
Replacement value
represents the costs to repair, replace or rebuild the lost or damaged property without deduction for
depreciation
Reinsurance
involves an Insurer ceding part of the risk it has assumed to one or more other insurers.
Subscription
an insurance policy under which a group of Insurers has agreed to participate in providing policy
insurance coverages.
Condition
is something imposed by the Insurer which requires the Insured to do or not to do something.
Subrogation
refers to the right of the Insurer to "step into the shoes" of the party whom it has compensated and
sue any party whom the compensated party could have sued.
Warranty
is a promise that certain facts are as they are represented to be and that they will remain so.
Material fact
a fact which if communicated to the Insurer would induce it either to decline the insurance
altogether, or not accept it unless a higher premium is paid.
Fraudulent
to act wilfully, and with the specific intent to deceive or cheat
, Void contract
a void contract is one which has no "legal or binding force" and as such, "is incapable of being
enforced by law."
Fire resistive
building which has met minimum standards in terms of hours it will withstand a specific, carefully
controlled test fire.
Non-combustible
all structural members including floors, roofs and their supports are constructed of steel, iron,
concrete or other non-combustible materials. Exterior also required to be of non-combustible
construction. Falls just short of classifying as fire resistive.
Common hazards
conditions common to all buildings which influence their potential for loss.
Detachment
refers to the proximity of the building insured or containing the property insured to other
commercially rated buildings.
Adverse selection
occurs when the applicants for insurance are largely those most likely to suffer a loss.
Risk classification
refers to the grouping or classifying of risks according to established criteria which, in large part, is
based on their probability for loss as a class.
Soft market
characterized by intense competition between insurers. As a result, rates tend to be low.
Hard market
occurs when low profit margins force out some of the competition. As a result, insurers use a more
disciplined underwriting approach. The insured normally receives little or nothing in the way of rate
discounts.
Hazard
is a condition which may cause a peril to occur.
Physical hazard
a condition relating to the use of tangible property which could cause a peril to occur.
Moral hazard
subjective characteristics of the applicant that could cause a peril to occur.
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