CAIB 2 Chapter 1 Questions and Answers (2024/2025)(Verified Answers)
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Course
CAIB
Institution
CAIB
CAIB 2 Chapter 1 Questions and Answers (2024/2025)(Verified Answers)
The three amounts to be considered when calculating the amount of payment as outlined in the Indemnity Agreement are:
1) the value of the lost or damaged property (ACV)
2) the interest of the insured in the property (ex. ...
CAIB 2 Chapter 1 Questions and Answers
(2024/2025)(Verified Answers)
The three amounts to be considered when calculating the amount of payment as outlined in the
Indemnity Agreement are:
1) the value of the lost or damaged property (ACV)
2) the interest of the insured in the property (ex. financial interest, home, mortgage)
3) the amount of insurance specified on the "Declarations Page" for the loss or damaged property
(least amount|)
Identify the four categories that buildings may fall into:
Residential (ex. home)
Non-mercantile (ex. hospitals, nursing homes)
Mercantile (ex. drycleaners, bakeries)
Manufacturing/Industrial (ex. autobody shops)
Three classes of property commercially insured are:
building, stock, equipment
Identify the two bases that coverage can be provided on:
Scheduled
All property
Property of every description
Identify and give an example of each of the five types of property contained in the definition of
Building found in the IBC Commercial Property Broad Form
1) Growing plants, trees, shrubs INSIDE the building used for decorative purposes only when insured
is the owner of the building (ex. cactus)
2) Materials and equipment supplies ON the premises for maintenance (ex. lumbar, glass)
3) Additions and extensions IN CONTACT with the building (enclosed walk-way between buildings)
4) Permanent fittings and fixtures ATTACHED and FORMING part of the building. (ex. light fixtures,
carpeting)
5) Fixed structures PERTAINING to building and located on the premises (ex. fence)
[GMAPF]
Identify the three conditions pertaining to the coverage for growing plants, trees, etc.
- such property was INSIDE the building
- was being used for decorative purposes
- insured was the owner of the building
Identify and give an example of the three types of property contained in the definition of Stock found
in the IBC Commercial Property Broad Form:
2) merchandise of every description USUAL to insureds business (ex. goods for sale for business)
3) similar property belonging to others which the insured is under obligation to keep insured or for
which he is legally liable for (appliance if appliance store.
[PMS]
Identify the three conditions that need to be present before 'similar property belonging to others' will
be insured under the definition of Stock:
1) must be similar to that insured by the policy
2) the insured must have had an obligation to keep the property insured
3) the insured must be legally liable for it.
Identify and give an example of each of the three types of property contained in the definition of
Equipment found in the IBC Commercial Property Broad Form:
1) generally all contents USUAL to insureds business, other than building or stock (ex. furniture)
2) similar property belonging to others which the insured is under obligation to keep insured or for
which he is legally liable for (ex. shaw cable box)
3) tenants improvements (ex. space rented out or leased, malls)
[GST]
Identify the three ways in which property may be valued:
Actual Cash Value (ACV)
Replacement Value
Book Value
Which way is NOT an appropriate means of valuing property for insurance purposes?
Book Value
Identify the one word that can summarize the difference between Actual Cash Value and
Replacement Cost:
depreciation
Who does the onus rest upon to establish the amount of insurance required?
the Insured
Identify the five methods that may be used to determine Actual Cash Value:
1) Actual Cash Value
2) True Value to customer
3) Market Value/Direct Sales Approach
4) Income Approach
5) Formula/Cost Approach Method
Identify the two types of depreciation used in the Formula/Cost Approach, and give an example of a
type of property that would be appropriate using each:
Straight Line Depreciation (ex. buildings)
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