CAIB 1 (Canadian Accredited Insurance Broker) Examination | Latest Verified Questions and Detailed Answers

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CAIB 1 (Canadian Accredited Insurance Broker)
Examination | Latest Verified Questions and
Detailed Answers

OVERVIEW DESCRIPTION:
This comprehensive set of questions is meticulously designed for the CAIB 1 (Canadian
Accredited Insurance Broker) Examination. The material is organized according to the
exam's three core components: Key Terms, accounting for 25% of the questions, covering
essential insurance vocabulary and legal principles; Multiple Choice, representing 20% of
the questions, testing foundational knowledge across general insurance, property, and
automobile coverages; and Short Answer, comprising the largest portion at 55% of the
questions, focusing on the practical application of concepts to realistic client scenarios.


COMPONENT 1: KEY TERMS (1 mark each)
QUESTION 1
Peril

CORRECT ANSWER: A specific cause of loss, such as fire, theft, or windstorm.




QUESTION 2
Hazard

CORRECT ANSWER: A condition that increases the probability or severity of a loss.




QUESTION 3
Risk

CORRECT ANSWER: The chance of loss or uncertainty of financial loss.

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QUESTION 4
Indemnity

CORRECT ANSWER: Restoring an insured to the same financial position they were in
immediately before a loss.




QUESTION 5
Subrogation

CORRECT ANSWER: The insurer’s right to step into the insured’s shoes to recover
payment from a liable third party.




QUESTION 6
Utmost Good Faith

CORRECT ANSWER: A legal principle requiring both insurer and insured to fully and
honestly disclose all material facts.




QUESTION 7
Material Fact

CORRECT ANSWER: Any information that would influence an insurer’s decision to
accept or rate a risk.




QUESTION 8
Proximate Cause

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CORRECT ANSWER: The dominant, efficient cause of a loss, not necessarily the closest
in time.




QUESTION 9
Actual Cash Value

CORRECT ANSWER: Replacement cost less physical depreciation.




QUESTION 10
Replacement Cost

CORRECT ANSWER: The cost to repair or replace property with new material of like
kind and quality, without deduction for depreciation.




QUESTION 11
Co-insurance Clause

CORRECT ANSWER: A property insurance clause requiring the insured to carry
insurance equal to a specified percentage (e.g., 80%) of the property’s value to avoid a
penalty on partial losses.




QUESTION 12
Deductible

CORRECT ANSWER: The amount of a loss that the insured must bear before the insurer
pays.

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QUESTION 13
Liability

CORRECT ANSWER: Legal responsibility for one’s actions or omissions that cause harm
to another.




QUESTION 14
Negligence

CORRECT ANSWER: The failure to exercise the degree of care that a reasonable person
would under similar circumstances.




QUESTION 15
Tort

CORRECT ANSWER: A civil wrong, other than breach of contract, for which a court will
provide a remedy (usually damages).




QUESTION 16
Vicarious Liability

CORRECT ANSWER: Legal responsibility imposed on one person for the torts of
another (e.g., employer for employee).




QUESTION 17
Occupiers’ Liability

CORRECT ANSWER: The legal duty owed by an occupier of premises to protect visitors
from harm.