CAIB 1 Practice Verified Exam Questions and
Answers 2026/2027
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Terms in this set (38)
Insurers are in the business of Insurable Interest
assuming the financial risks of others Utmost Good Faith
which involves entering into a formal Indemnity
contract. A contract is enforceable at
law only when all legal elements have
been observed. Insurance contracts
differ from other formal agreements
and are subject to what three
additional elements?
, Explain the meaning and disadvantage Avoidance: Avoidance means that all chance of
of the following approaches: financial loss has been eliminated or a decision not to
Avoidance of Risk & Control of Risk do something. The disadvantage is its not very
effective as often the elimination of one exposure
creates another in its place.
Control: taking measures to reduce the frequency and
severity of losses. The disadvantage is that not all
losses can be controlled, because equipment will not
work 100% of the time
Identify the three elements that are Insurable Interest, Utmost Good Faith, and Indemnity
unique to contracts of insurance:
The Insurance Act restricts payment for Entitled to receive payment for the actual amount of
an insured loss to those amounts the loss, no more and no less. The measure is the
required to indemnify the Insured. value of the object of insurance as it was immediately
Indicate the amount the Insured is before the loss.
legally entitled to receive and the
measure used to determine this value.
Answers 2026/2027
Play your way to mastery with fun games
Match Blocks Charms NEW
Terms in this set (38)
Insurers are in the business of Insurable Interest
assuming the financial risks of others Utmost Good Faith
which involves entering into a formal Indemnity
contract. A contract is enforceable at
law only when all legal elements have
been observed. Insurance contracts
differ from other formal agreements
and are subject to what three
additional elements?
, Explain the meaning and disadvantage Avoidance: Avoidance means that all chance of
of the following approaches: financial loss has been eliminated or a decision not to
Avoidance of Risk & Control of Risk do something. The disadvantage is its not very
effective as often the elimination of one exposure
creates another in its place.
Control: taking measures to reduce the frequency and
severity of losses. The disadvantage is that not all
losses can be controlled, because equipment will not
work 100% of the time
Identify the three elements that are Insurable Interest, Utmost Good Faith, and Indemnity
unique to contracts of insurance:
The Insurance Act restricts payment for Entitled to receive payment for the actual amount of
an insured loss to those amounts the loss, no more and no less. The measure is the
required to indemnify the Insured. value of the object of insurance as it was immediately
Indicate the amount the Insured is before the loss.
legally entitled to receive and the
measure used to determine this value.
