CAIB 2 FINAL PAPER 2026 QUESTIONS WITH
ANSWERS GRADED A+
◉ Identify the four categories that buildings may fall into. Answer:
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. Answer: building,
stock, equipment
◉ Identify the two bases that coverage can be provided on. Answer:
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. Answer: 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. Answer: - 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. Answer: 1) packing, wrapping and advertising materials (ex.
bubble plastic, Styrofoam)
,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. Answer: 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. Answer: 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. Answer:
Actual Cash Value (ACV)
Replacement Value
Book Value
◉ Which way is NOT an appropriate means of valuing property for
insurance purposes? Answer: Book Value
◉ Identify the one word that can summarize the difference between
Actual Cash Value and Replacement Cost. Answer: depreciation
◉ Who does the onus rest upon to establish the amount of insurance
required? Answer: the Insured
◉ Identify the five methods that may be used to determine Actual Cash
Value. Answer: 1) Actual Cash Value
2) True Value to customer
3) Market Value/Direct Sales Approach
4) Income Approach
5) Formula/Cost Approach Method
ANSWERS GRADED A+
◉ Identify the four categories that buildings may fall into. Answer:
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. Answer: building,
stock, equipment
◉ Identify the two bases that coverage can be provided on. Answer:
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. Answer: 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. Answer: - 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. Answer: 1) packing, wrapping and advertising materials (ex.
bubble plastic, Styrofoam)
,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. Answer: 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. Answer: 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. Answer:
Actual Cash Value (ACV)
Replacement Value
Book Value
◉ Which way is NOT an appropriate means of valuing property for
insurance purposes? Answer: Book Value
◉ Identify the one word that can summarize the difference between
Actual Cash Value and Replacement Cost. Answer: depreciation
◉ Who does the onus rest upon to establish the amount of insurance
required? Answer: the Insured
◉ Identify the five methods that may be used to determine Actual Cash
Value. Answer: 1) Actual Cash Value
2) True Value to customer
3) Market Value/Direct Sales Approach
4) Income Approach
5) Formula/Cost Approach Method
