CAIB 1 Question and Answer [2026] | UPDATED
ACTUAL Exam | 100% Verified Answers
• Insurance . CORRECT ANSWER: undertaking by one person to indemnify
another person against loss or liability for loss in respect of a certain risk or peril to
which the object of insurance may be exposed or to pay a sum of money or other
ting of value upon the happening of a certain event
• Contract . CORRECT ANSWER: an agreement between two or more persons
which creates an obligation to do or not to do a particular thing
• Insurable Interest . CORRECT ANSWER: showing you would suffer financially
by a loss
• Utmost good faith . CORRECT ANSWER: caveat emptor, buyer beware.
Exercise a higher standard of honesty
• Indemnity . CORRECT ANSWER: putting the insured back into the same
position as they were in as immediately prior to loss
• Binder . CORRECT ANSWER: Contract of insurace
• Agency Agreement . CORRECT ANSWER: source of a brokers authority
• Void . CORRECT ANSWER: Unable to support its intended purpose, treated as
though it never existed
• Voidable . CORRECT ANSWER: void to the wrongdoer but not to the wronged
party unless they elect to treat it so
, • Peril . CORRECT ANSWER: The cause of a loss
• Direct Loss . CORRECT ANSWER: When the object of insurance is the loss
• Indirect loss . CORRECT ANSWER: Losses which arise as a consequence of a
direct loss
• Actual cash value . CORRECT ANSWER: New or replacement cost of the
insured property less depreciation
• Replacement cost . CORRECT ANSWER: repair or replacement of lost or
damaged property with new property of like kind and quality without depreciation
• Valued policy . CORRECT ANSWER: insured and insurer agree on the cash
value of the property at the time the policy is issued
• Blanket coverage . CORRECT ANSWER: single limit of insurance for all
property falling within specific class
• Scheduled coverage . CORRECT ANSWER: property is itemized on the policy
• Fiduccary . CORRECT ANSWER: someone who occupies a position of special
trust or confidence in the handling or supervising of the affairs or funds of another
• Unearned premium . CORRECT ANSWER: portion of premium that has yet to
be earned
ACTUAL Exam | 100% Verified Answers
• Insurance . CORRECT ANSWER: undertaking by one person to indemnify
another person against loss or liability for loss in respect of a certain risk or peril to
which the object of insurance may be exposed or to pay a sum of money or other
ting of value upon the happening of a certain event
• Contract . CORRECT ANSWER: an agreement between two or more persons
which creates an obligation to do or not to do a particular thing
• Insurable Interest . CORRECT ANSWER: showing you would suffer financially
by a loss
• Utmost good faith . CORRECT ANSWER: caveat emptor, buyer beware.
Exercise a higher standard of honesty
• Indemnity . CORRECT ANSWER: putting the insured back into the same
position as they were in as immediately prior to loss
• Binder . CORRECT ANSWER: Contract of insurace
• Agency Agreement . CORRECT ANSWER: source of a brokers authority
• Void . CORRECT ANSWER: Unable to support its intended purpose, treated as
though it never existed
• Voidable . CORRECT ANSWER: void to the wrongdoer but not to the wronged
party unless they elect to treat it so
, • Peril . CORRECT ANSWER: The cause of a loss
• Direct Loss . CORRECT ANSWER: When the object of insurance is the loss
• Indirect loss . CORRECT ANSWER: Losses which arise as a consequence of a
direct loss
• Actual cash value . CORRECT ANSWER: New or replacement cost of the
insured property less depreciation
• Replacement cost . CORRECT ANSWER: repair or replacement of lost or
damaged property with new property of like kind and quality without depreciation
• Valued policy . CORRECT ANSWER: insured and insurer agree on the cash
value of the property at the time the policy is issued
• Blanket coverage . CORRECT ANSWER: single limit of insurance for all
property falling within specific class
• Scheduled coverage . CORRECT ANSWER: property is itemized on the policy
• Fiduccary . CORRECT ANSWER: someone who occupies a position of special
trust or confidence in the handling or supervising of the affairs or funds of another
• Unearned premium . CORRECT ANSWER: portion of premium that has yet to
be earned
