CAIB 1 Practice Exam || Most Recent Exam 2026-2027 Actual
Complete 100 Real Exam Questions And Correct Answers
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When an underwriter looks at the financial and claims history
of the applicant, they are looking for... a. Morale hazard
b. Moral hazard
c. Physical hazard
d. Risks - ANSWER -b. Moral hazard
It is often said that property insurance policies are designed to
insure against "direct damage" only. Yesterday, a fire
destroyed 65% of your client's apartment building. What is the
likely not covered in this situation? - ANSWER -Loss of rental
income
All property policies contain some conditions &
warranties. Which of the
following is not
true?
a. A condition is a requirement that the insured do or not do
something
,b. A claim is still valid despite a breach of condition if the loss
was not caused
by the
breach
c. A claim is still valid despite a breach of warranty by the
insured as long as the
breach did not directly cause
the loss
d. A warranty is a promise that certain facts are true and shall
remain true for the duration of the policy period - ANSWER -c.
A claim is still valid despite a breach of warranty by the insured
as long as the breach did not directly cause the loss
What is the definition of insurance? - ANSWER -The undertaking
by one person
to indemnify another against loss or liability in respect to a
certain risk or peril
What is the definition of contract? - ANSWER -An agreement
between people to
do or not do
something
What is the definition of risk? - ANSWER -Chance of financial
loss
, What is the principle of indemnity? - ANSWER -The
principle of indemnity
ensures that people receive the actual amount of their loss - no
more, no less.
What is an insurance binder? - ANSWER -A temporary
agreement where the insurer agrees to provide certain
coverages pending the issuance of a policy
What is an agency agreement? - ANSWER -A contract between
the insurer and
the
brokerage
What is a void contract? - ANSWER -A contract where one
cannot legally
support its intended purpose. In this case, the contract
never existed.
What is a peril? - ANSWER -Cause of loss
What is the difference between a direct loss and an indirect loss?
- ANSWER -A
direct loss occurs when a peril directly attacks the object of
insurance. Indirect
losses are losses that arise as a consequence of
a direct loss
Complete 100 Real Exam Questions And Correct Answers
(Verified Answers) Already Graded A+ | Guaranteed
Success!! Newest Exam | Just Released!!
When an underwriter looks at the financial and claims history
of the applicant, they are looking for... a. Morale hazard
b. Moral hazard
c. Physical hazard
d. Risks - ANSWER -b. Moral hazard
It is often said that property insurance policies are designed to
insure against "direct damage" only. Yesterday, a fire
destroyed 65% of your client's apartment building. What is the
likely not covered in this situation? - ANSWER -Loss of rental
income
All property policies contain some conditions &
warranties. Which of the
following is not
true?
a. A condition is a requirement that the insured do or not do
something
,b. A claim is still valid despite a breach of condition if the loss
was not caused
by the
breach
c. A claim is still valid despite a breach of warranty by the
insured as long as the
breach did not directly cause
the loss
d. A warranty is a promise that certain facts are true and shall
remain true for the duration of the policy period - ANSWER -c.
A claim is still valid despite a breach of warranty by the insured
as long as the breach did not directly cause the loss
What is the definition of insurance? - ANSWER -The undertaking
by one person
to indemnify another against loss or liability in respect to a
certain risk or peril
What is the definition of contract? - ANSWER -An agreement
between people to
do or not do
something
What is the definition of risk? - ANSWER -Chance of financial
loss
, What is the principle of indemnity? - ANSWER -The
principle of indemnity
ensures that people receive the actual amount of their loss - no
more, no less.
What is an insurance binder? - ANSWER -A temporary
agreement where the insurer agrees to provide certain
coverages pending the issuance of a policy
What is an agency agreement? - ANSWER -A contract between
the insurer and
the
brokerage
What is a void contract? - ANSWER -A contract where one
cannot legally
support its intended purpose. In this case, the contract
never existed.
What is a peril? - ANSWER -Cause of loss
What is the difference between a direct loss and an indirect loss?
- ANSWER -A
direct loss occurs when a peril directly attacks the object of
insurance. Indirect
losses are losses that arise as a consequence of
a direct loss
