Practice Exam for CAIB 1 Test with Verified Answers
3 views 0 purchase
Course
CAIB 1
Institution
CAIB 1
Practice Exam for CAIB 1 Test with Verified Answers
Insurers are in the business of assum-
ing the financial risks of others which
involves entering into a formal contract. A
contract is enforceable at law only when
all legal elements have been observed.
Insurance contracts differ from other ...
Practice Exam for CAIB 1 Test with Verified Answers
Insurers are in the business of assum-
ing the financial risks of others which
involves entering into a formal contract. A
Insurable Interest
contract is enforceable at law only when
Utmost Good Faith
all legal elements have been observed.
Indemnity
Insurance contracts differ from other for-
mal agreements and are subject to what
three additional elements?
Avoidance: Avoidance means that all
chance of financial loss has been elim-
inated or a decision not to do something.
The disadvantage is its not very effective
Explain the meaning and disadvantage as often the elimination of one exposure
of the following approaches: Avoidance creates another in its place.
of Risk & Control of Risk Control: taking measures to reduce the
frequency and severity of losses. The dis-
advantage is that not all losses can be
controlled, because equipment will not
work 100% of the time
Identify the three elements that are Insurable Interest, Utmost Good Faith,
unique to contracts of insurance: and Indemnity
The Insurance Act restricts payment for
Entitled to receive payment for the actual
an insured loss to those amounts re-
amount of the loss, no more and no less.
quired to indemnify the Insured. Indicate
The measure is the value of the object of
the amount the Insured is legally entitled
insurance as it was immediately before
to receive and the measure used to de-
the loss.
termine this value.
Material Change. The insured must notify
Policies insuring against the peril of fire the insurer promptly of any change that
must contain Fire Statutory Conditions. serves to increase the chance of loss.
Indicate the Statutory Condition and the After receiving notification of the Material
applicable rules: During the policy term Change the insurer has the option to can-
the insured installed a wood burning cel the policy and return the unearned
stove as a secondary heating device. portion of the premium to the insured;
The application indicates that a gas fur- or continue to insure the risk and advise
nace is used to heat the premises. the insured in writing of the additional
premium payable.
1/8
, Practice Exam for CAIB 1 Test with Verified Answers
All Homeowners policies describe the
Basis of Claim Payment for loss or dam- Cost to reproduce lost or damage media
age to dwelling building, detached pri- from duplicates or from originals of the
vate structures and personal property. previous generation of the media. The
Indicate the basis of settlement and con- payment for lost records is the cost of
ditions: Water used to extinguish a small blank books, pages, cards or other mate-
fire at the Insured's home destroyed all rials plus the cost of actually transcribing
electronic media and records kept by the or copying such records.
Insured.
Another option for insuring property val-
Coverages A to D are combined into one
ues under Homeowners policies is the
single limit. The advantage is that this ap-
"Single Limit" basis. Explain how this
proach eliminates the coverage restric-
basis differs from the usual coverage
tion otherwise applicable to Coverages
format and the advantage that this ap-
B, C and D.
proach offers:
The Homeowners Comprehensive Form This policy "insures against all risks of
(IBC 1155) is superior to all other Home- direct physical loss or damage subject
owners policies. State how this policy de- to the exclusions and conditions of this
scribes "Insured Perils" form"
Covered up to 5% of the amount of insur-
Indicate the coverage provided for Emer- ance on the dwelling and covers reason-
gency Removal Expense under the Mo- able expenses incurred in disconnecting
bile Homeowners Form. water and power, and towing or trans-
porting costs.
What is the basis of claim payment for
The basis of claim is Actual Cash Value;
loss or damage to the mobile home, de-
payment for loss or damage to personal
tached private structures and personal
property is made on the same basis as
property under a Mobile Homeowners
under Homeowners Forms.
Policy?
Improvements or betterments made by
or acquired at the expense of the tenant;
$500 for damage (excluding fire dam-
Identify two (2) other coverages included
age) to the portion of the building occu-
under C - Personal Property, which are
pied by the tenant resulting from theft or
not found in a Homeowners policy
attempted theft; Damage caused to the
interior of the building by vandalism or
malicious acts.
2/8
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 MERCYTRISHIA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.
