CAIB 1 UPDATED ACTUAL EXAM QUESTIONS AND
ANSWERS SURE A+
✔✔Unearned Premiums - ✔✔Premiums not yet earned by the insurer. Such premiums
are deemed to be held in trust in order to refund the insureds in the event the policy is
cancelled prior to expiry date.
✔✔Fire - ✔✔Involves the presence of a visible flame or glow, actual ignition or burning
is required.
✔✔Friendly Fire - ✔✔A fire that is contained in its proper receptacle.
✔✔Hostile Fire - ✔✔A fire that passes outside of the limits assigned to it. (e.g. spark
thrown from a fireplace that burns a carpet is hostile fire)
✔✔Proximate Result - ✔✔Damage which arises from a natural or continuous sequence
of the peril causing the loss.
✔✔Material Change - ✔✔Is any change within the control and knowledge of the insured
and which arises after the policy has been issued and serves to increase the chance of
loss.
✔✔Pro Rata - ✔✔Basis of return premium calculation when the insurer cancels a policy.
The amount of the return premium is arrived at by dividing the amount of premium paid
by the number of days in the policy period. The number so obtained is then multiplied by
the number of days remaining in the policy period.
✔✔Short Rate - ✔✔The basis of return premium calculation when the insured cancels
the policy. The amount of the return premium is equivalent to that provided on a pro-rata
basis, less any administrative charge or cancellation penalty.
✔✔Notice of Loss - ✔✔Immediate report of loss to insurer by the insured or his
representative (agent) in writing.
✔✔Proof of Loss - ✔✔A formal verification, under oath, of the details and amounts
being claimed under the policy.
✔✔Fraud - ✔✔Is a deliberate attempt to deceive, with a view to securing some profit.
✔✔Deductible - ✔✔Represents the amount the insured is required to absorb for each
loss for which insurance coverage is provided before receiving any payment from the
insurer.
, ✔✔Subrogation - ✔✔When the insurer has paid a claim for loss caused by a third party,
the Insurance Act allows the insurer to place itself "in the insureds shoes" in respect of
their right to recover the amount of the loss from the responsible party.
✔✔Proprietary Insurers - ✔✔Insurance companies which exist to make a profit or return
on their investment.
✔✔Proprietary Insurers - ✔✔Insurance companies which exist to make a profit or return
on their investment.
✔✔Non-Proprietary Insurers - ✔✔Insurance companies which are organized for
reasons other than profit. They are owned and controlled by their policyholders and their
mandate is to secure insurance at as low a cost as possible.
✔✔Personal Property - ✔✔Contents of the insured's dwelling and other personal
property owned, worn or used by the insured while on the premises, which is usual to
the ownership or maintenance of a dwelling.
✔✔Additional Living Expenses - ✔✔Coverage that provides for additional cost of living
elsewhere when the dwelling is damaged by an insured peril and the damage is
sufficient to make the dwelling unfit for occupancy, or requires that the insured move out
while repairs are being made. Also provides for loss of fair rental value if part of the
dwelling was rented or being held for rental at the time of the loss.
✔✔Vandalism - ✔✔The wilful or ignorant destruction of property.
✔✔Malicious Act - ✔✔Wrongful act done without legal justification or excuse.
✔✔Vacant - ✔✔Refers to circumstances where, regardless of the presence of
furnishings, all occupants have moved out with no intention of returning and no new
occupant has taken up residence; or in the case of a newly constructed house, no
occupant has yet taken up residence.
✔✔Theft - ✔✔Includes all means of taking property without the owner's consent.
✔✔Mobile Home - ✔✔A home that is factory built on its own chassis and which can be
easily moved.
✔✔Condominium - ✔✔A system of separate ownership of individual units in a multiple
unit building.
✔✔Endorsement - ✔✔An extra sheet(s) or slip(s) of paper attached to the policy
indicating in writing that the insured and insurer have agreed to a change in the terms of
the insurance contract.
ANSWERS SURE A+
✔✔Unearned Premiums - ✔✔Premiums not yet earned by the insurer. Such premiums
are deemed to be held in trust in order to refund the insureds in the event the policy is
cancelled prior to expiry date.
✔✔Fire - ✔✔Involves the presence of a visible flame or glow, actual ignition or burning
is required.
✔✔Friendly Fire - ✔✔A fire that is contained in its proper receptacle.
✔✔Hostile Fire - ✔✔A fire that passes outside of the limits assigned to it. (e.g. spark
thrown from a fireplace that burns a carpet is hostile fire)
✔✔Proximate Result - ✔✔Damage which arises from a natural or continuous sequence
of the peril causing the loss.
✔✔Material Change - ✔✔Is any change within the control and knowledge of the insured
and which arises after the policy has been issued and serves to increase the chance of
loss.
✔✔Pro Rata - ✔✔Basis of return premium calculation when the insurer cancels a policy.
The amount of the return premium is arrived at by dividing the amount of premium paid
by the number of days in the policy period. The number so obtained is then multiplied by
the number of days remaining in the policy period.
✔✔Short Rate - ✔✔The basis of return premium calculation when the insured cancels
the policy. The amount of the return premium is equivalent to that provided on a pro-rata
basis, less any administrative charge or cancellation penalty.
✔✔Notice of Loss - ✔✔Immediate report of loss to insurer by the insured or his
representative (agent) in writing.
✔✔Proof of Loss - ✔✔A formal verification, under oath, of the details and amounts
being claimed under the policy.
✔✔Fraud - ✔✔Is a deliberate attempt to deceive, with a view to securing some profit.
✔✔Deductible - ✔✔Represents the amount the insured is required to absorb for each
loss for which insurance coverage is provided before receiving any payment from the
insurer.
, ✔✔Subrogation - ✔✔When the insurer has paid a claim for loss caused by a third party,
the Insurance Act allows the insurer to place itself "in the insureds shoes" in respect of
their right to recover the amount of the loss from the responsible party.
✔✔Proprietary Insurers - ✔✔Insurance companies which exist to make a profit or return
on their investment.
✔✔Proprietary Insurers - ✔✔Insurance companies which exist to make a profit or return
on their investment.
✔✔Non-Proprietary Insurers - ✔✔Insurance companies which are organized for
reasons other than profit. They are owned and controlled by their policyholders and their
mandate is to secure insurance at as low a cost as possible.
✔✔Personal Property - ✔✔Contents of the insured's dwelling and other personal
property owned, worn or used by the insured while on the premises, which is usual to
the ownership or maintenance of a dwelling.
✔✔Additional Living Expenses - ✔✔Coverage that provides for additional cost of living
elsewhere when the dwelling is damaged by an insured peril and the damage is
sufficient to make the dwelling unfit for occupancy, or requires that the insured move out
while repairs are being made. Also provides for loss of fair rental value if part of the
dwelling was rented or being held for rental at the time of the loss.
✔✔Vandalism - ✔✔The wilful or ignorant destruction of property.
✔✔Malicious Act - ✔✔Wrongful act done without legal justification or excuse.
✔✔Vacant - ✔✔Refers to circumstances where, regardless of the presence of
furnishings, all occupants have moved out with no intention of returning and no new
occupant has taken up residence; or in the case of a newly constructed house, no
occupant has yet taken up residence.
✔✔Theft - ✔✔Includes all means of taking property without the owner's consent.
✔✔Mobile Home - ✔✔A home that is factory built on its own chassis and which can be
easily moved.
✔✔Condominium - ✔✔A system of separate ownership of individual units in a multiple
unit building.
✔✔Endorsement - ✔✔An extra sheet(s) or slip(s) of paper attached to the policy
indicating in writing that the insured and insurer have agreed to a change in the terms of
the insurance contract.
