CAIB 1 – CHAPTER 1 EXAM WITH CORRECT
ACTUAL QUESTIONS AND CORRECTLY
WELL DEFINED ANSWERS LATEST 2024 –
2025 ALREADY GRADED A+
Discuss "Removal Coverage" - ANSWERS-Any insured property that is removed
from the location to prevent loss shall be covered at the property not insured up
to 7 days
Discuss "Limitation of Liability Clauses" - ANSWERS-When a policy contains
clauses that may limit the amount of payment they must clearly print the words in
red ink on the front page
What is co-insurance? - ANSWERS-when an insurer requires the insured to
purchase an amount of insurance which is equivalent to a percentage of its value
What type of losses are co-insurance applied to? - ANSWERS-Partial losses
Define "Risk Control" - ANSWERS-To reduce the frequency or severity of the loss
, Define "Risk Transfer" - ANSWERS-To shift the financial obligation to someone
better equipped to handle it (an insurance company)
List 2 Types of Risks - ANSWERS-1) Speculative Risk 2) Pure Risk
Define "Speculative Risk" - ANSWERS-Chance of Financial Loss or Financial Gain
Define "Pure Risk" - ANSWERS-Chance of Financial Loss only
Define "Risk" - ANSWERS-The chance of a financial loss to which the object of
insurance may be exposed to
List 3 Categories of Risk - ANSWERS-1) Personal 2) Property 3) Liability
List 4 Types of Risk Management Techniques - ANSWERS-1) Risk Avoidance 2) Risk
Retention 3) Risk Control 4) Risk Transfer
Define "Risk Avoidance" - ANSWERS-To avoid doing something in order to
eliminate the chance of risk
Define "Risk Retention" - ANSWERS-To self-insure or to pay for losses themselves
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