CAIB 2 Chapter 1 Practice exam 1 Questions and Answers (2024/2025)(Verified Answers)
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CAIB
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CAIB
CAIB 2 Chapter 1 Practice exam 1 Questions and Answers (2024/2025)(Verified Answers)
Explain what it means to issue insurance on a scheduled basis
Only the property listed or scheduled on the policy is insured
Explain what is meant to issue insurance on the basis of Property of Every Descrip...
caib 2 chapter 1 practice exam 1 questions and ans
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CAIB 2 Chapter 1 Practice exam 1 Questions
and Answers (2024/2025)(Verified Answers)
Explain what it means to issue insurance on a scheduled basis
Only the property listed or scheduled on the policy is insured
Explain what is meant to issue insurance on the basis of Property of Every Description
Building, stock and equipment are insured under a single limit of insurance
Explain what it means to issue insurance on an all property (blanket) basis
All property owned by the insured is insured under a single limit of insurance. All property blanket
may insure property at more than one location
In commercial property policies, identify six components used to define a building
1) Building described on the declaration page
2) Fixed structures pertaining to the building and located on the premises
3) Additions and extensions communicating and in contact with the building
5) Materials, equipment and supplies on the premises for maintenance of, and normal repairs and
minor alterations to the building or for building services
6) Growing plants, trees, shrubs or flowers inside the building used for decorative purposes when the
insured is the owner of the building
In Commercial policies, identify three components used to define stock
Merchandise of every description usual to the insured's business
2) Packing, wrapping and advertising materials
3) similar property belonging to others which the insured is under obligation to keep insured or for
which he is legally liable
In commercial policies, identify three component used to define equipment
1) Generally all contents usual to the insured's business other than building or stock as herein defined
2) Similar property belonging to others which the insured is under obligation to keep insured or is
legally liable for (copier/coffee machine)
3) Tenant's improvements which are defined as the building improvements, alterations and
betterments made at the expense of the insured to a building
What are three ways property may be values
1) Actual cash value
2) Replacement cost
3) Book vale
Explain the traditional meaning of ACV
Repair or replacement of lost or damaged property, less the application of any depreciation
Describe two methods used to determine depreciation using Formula/Cost Approach Method
i) Straight Line Depreciation - applies depreciation based on the normal life expectancy of the
buildings (building with 50 years expectancy and was 25 years at time of loss; worth 50%)
ii) Plateau Accelerated depreciation - applies large amounts of depreciation during the first few years,
then depreciation 'plateaus' or levels out (electronics)
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