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...
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%)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller papersmaster01. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $16.49. You're not tied to anything after your purchase.
