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CAIB 2 Chapter 1 Practice exam 1 Questions & Answers 100%. $16.49
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CAIB 2 Chapter 1 Practice exam 1 Questions & Answers 100%.
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  • CAIB 2
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  • CAIB 2

Explain what it means to issue insurance on a scheduled basis - ANSWEROnly 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 - ANSWERBuilding, stock and equipment are insured under a single limit of in...

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  • August 18, 2024
  • 2
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • caib 2 chapter 1 practice exam 1 questions answe
  • caib 2 chapter 1 practice exam 1 stuvia
  • explain what it means to issue insurance on a sche
  • what are three ways property may be values answ

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CAIB 2 Chapter 1 Practice
exam 1 Questions & Answers
100%.
Explain what it means to issue insurance on a scheduled basis - ANSWEROnly 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 -
ANSWERBuilding, stock and equipment are insured under a single limit of insurance



What are three ways property may be values - ANSWER1) Actual cash value

2) Replacement cost

3) Book vale




ii) Plateau Accelerated depreciation - applies large amounts of depreciation during the first few years,
then depreciation 'plateaus' or levels out (electronics)



Describe the difference between Replacement Value and ACV - ANSWERReplacement Value is
different than ACV because there is no deduction for depreciation



Which method used to value property is the least appropriate for insurance? - ANSWERBook value is
the most inappropriate method of valuing property for insurance purposes because book value is
based on accounting functions only

Explain the traditional meaning of ACV - ANSWERRepair 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 -
ANSWERi) 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%)

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