CAIB 2 CHAPTER 1 EXAM 2026 UPDATE
QUESTIONS AND CORRECT VERIFIED
ANSWERS ALREADY GRADEDA+
(BRAND NEW VISION
Identify the class of property to which the Premium Adjustment clause will apply: - ans-
Stock
Identify two guidelines before a premium adjustment will be permitted: - ans-- claims
for return of premium must be submitted no later than 6 months after the policy
expiry date
- claims must be presented on a Premium Adjustment Form, showing actual cash
value of stock on the last day of each month.
Identify three things the Verification of Values clause allows the |Insurer to do: - ans-1)
allows the insurer THE RIGHT TO CONFIRM THE VALUES INSURED UNDER THE
POLICY ARE REASONAABLE AND ACTUALLY EXIST
2) permits the insurer THE OPPORTUNITY TO DETERMINE VALUES ON HAND AT
THE TIME OF A PREVIOUS LOSS
3) enables the insurer to DETERMINE THE EXISTENCE OF ANY OTHER POLICIES
OF INSURANCE WHICH MIGHT BE CALLED UPON TO SHARE IN THE PAYMENT
OF A LOSS.
Identify under Basis of Valuations how losses will be paid on items of stock: UNSOLD &
SOLD: - ans-UNSOLD: restricted to its "actual cash value at the time of a loss"
SOLD: the selling price charged to the purchaser, less any discounts allowed.
Identify three types of discounts that will be considered when adjusting loss on sold
stock: - ans-1) picked up by purchaser
2) trade-ins
3) any reduction in selling price because of negotiation between seller and buyer
, Identify two types of property which are subject to a 'special basis of settlement': - ans--
tenants improvements
- records
Identify the liability of the Insurer when there is loss to tenants improvements: - ans-- if
repaired or replaced with due diligence and dispatch
- if not repaired with due diligence and dispatch, the insurer will pay according to
the un-expiry of the LEASE.
Identify the liability of the Insurer when there is loss to:
a) Books of account kept on a manual system:
b) Books of account stored electronically: - ans-a) Books of account kept on a
manual system:
the cost of blank materials for reproducing records and cost of labour to
transcribe or copy records where there is no duplicate
b) Books of account stored electronically:
the cost of media plus cost of reproduction of data
Identify to which parties the insurer may settle a claim when there has been loss to the
'property of others': - ans-- bailee or insured
- owner
Identify the four conditions of the Locked Vehicle Warranty: - ans-1) the vehicle
containing the property insured be equipped with a fully enclosed body or
compartment
2) the doors are securely locked and windows closed
3) access or entry to the vehicle must have been gained through the use of force
4) there must be visible evidence which confirms force
Identify three breaches of good faith that would be considered contrary to Statutory
Condition 1: (misrepresentation) - ans-- any false description of property to insurer
- any misrepresentation of material fact
- any fraudulant omission of material fact
Give two samples of what courts have ruled to be material: - ans-- previous claims
- vacancy
- existence of other insurance
QUESTIONS AND CORRECT VERIFIED
ANSWERS ALREADY GRADEDA+
(BRAND NEW VISION
Identify the class of property to which the Premium Adjustment clause will apply: - ans-
Stock
Identify two guidelines before a premium adjustment will be permitted: - ans-- claims
for return of premium must be submitted no later than 6 months after the policy
expiry date
- claims must be presented on a Premium Adjustment Form, showing actual cash
value of stock on the last day of each month.
Identify three things the Verification of Values clause allows the |Insurer to do: - ans-1)
allows the insurer THE RIGHT TO CONFIRM THE VALUES INSURED UNDER THE
POLICY ARE REASONAABLE AND ACTUALLY EXIST
2) permits the insurer THE OPPORTUNITY TO DETERMINE VALUES ON HAND AT
THE TIME OF A PREVIOUS LOSS
3) enables the insurer to DETERMINE THE EXISTENCE OF ANY OTHER POLICIES
OF INSURANCE WHICH MIGHT BE CALLED UPON TO SHARE IN THE PAYMENT
OF A LOSS.
Identify under Basis of Valuations how losses will be paid on items of stock: UNSOLD &
SOLD: - ans-UNSOLD: restricted to its "actual cash value at the time of a loss"
SOLD: the selling price charged to the purchaser, less any discounts allowed.
Identify three types of discounts that will be considered when adjusting loss on sold
stock: - ans-1) picked up by purchaser
2) trade-ins
3) any reduction in selling price because of negotiation between seller and buyer
, Identify two types of property which are subject to a 'special basis of settlement': - ans--
tenants improvements
- records
Identify the liability of the Insurer when there is loss to tenants improvements: - ans-- if
repaired or replaced with due diligence and dispatch
- if not repaired with due diligence and dispatch, the insurer will pay according to
the un-expiry of the LEASE.
Identify the liability of the Insurer when there is loss to:
a) Books of account kept on a manual system:
b) Books of account stored electronically: - ans-a) Books of account kept on a
manual system:
the cost of blank materials for reproducing records and cost of labour to
transcribe or copy records where there is no duplicate
b) Books of account stored electronically:
the cost of media plus cost of reproduction of data
Identify to which parties the insurer may settle a claim when there has been loss to the
'property of others': - ans-- bailee or insured
- owner
Identify the four conditions of the Locked Vehicle Warranty: - ans-1) the vehicle
containing the property insured be equipped with a fully enclosed body or
compartment
2) the doors are securely locked and windows closed
3) access or entry to the vehicle must have been gained through the use of force
4) there must be visible evidence which confirms force
Identify three breaches of good faith that would be considered contrary to Statutory
Condition 1: (misrepresentation) - ans-- any false description of property to insurer
- any misrepresentation of material fact
- any fraudulant omission of material fact
Give two samples of what courts have ruled to be material: - ans-- previous claims
- vacancy
- existence of other insurance
