CAIB 1 Practice Exam
Your clients suffered a fire loss totaling $87,555. When making the proof of loss, they claimed $1,500 for
a stereo unit which they never owned. In the event that the fraud is discovered by the insurer, what
portion of the claim, if any, is required to be paid under policy? - Answer-When the insurer is able to
prove fraud, it is entitled to deny the entire claim, and not just that part which was fraudulent. (1 mark
The insurer always has the right to decide on how the claim will be settled. It may make payment in the
form of cash or rebuild, repair or replace the lost or damaged property. When must the insurer provide
the insured with its notice of intention to rebuild, repair or replace? - Answer-If the insurer decides to
repair, rebuild or replace the lost or damaged property, it must advise the insured in writing within 30
days of the receipt of the proof of loss. (1 mark
Your client filed a proof of loss 15 days ago. In this case, how much time does the insurer have remaining
before the claim must be paid? - Answer-The loss is payable within 60 days after completion of the
proof of loss, unless the contract provides for a shorter period. In this case, as the proof of loss was filed
15 days ago, the claim must be paid within the next 45 days. (1 mark)
Your client's home is insured under an IBC Comprehensive Homeowners Form (IBC 1155). The dwelling
is insured on a Guaranteed Replacement Cost basis
Briefly state the guarantee provided by this endorsement. - Answer-The insurer agrees to pay the full
cost of repairs or replacement of the dwelling even if it is more than the amount of insurance
purchased. (1 mark)
Your client's home is insured under an IBC Comprehensive Homeowners Form (IBC 1155). The dwelling
is insured on a Guaranteed Replacement Cost basis
Your clients suffered a fire loss totaling $87,555. When making the proof of loss, they claimed $1,500 for
a stereo unit which they never owned. In the event that the fraud is discovered by the insurer, what
portion of the claim, if any, is required to be paid under policy? - Answer-When the insurer is able to
prove fraud, it is entitled to deny the entire claim, and not just that part which was fraudulent. (1 mark
The insurer always has the right to decide on how the claim will be settled. It may make payment in the
form of cash or rebuild, repair or replace the lost or damaged property. When must the insurer provide
the insured with its notice of intention to rebuild, repair or replace? - Answer-If the insurer decides to
repair, rebuild or replace the lost or damaged property, it must advise the insured in writing within 30
days of the receipt of the proof of loss. (1 mark
Your client filed a proof of loss 15 days ago. In this case, how much time does the insurer have remaining
before the claim must be paid? - Answer-The loss is payable within 60 days after completion of the
proof of loss, unless the contract provides for a shorter period. In this case, as the proof of loss was filed
15 days ago, the claim must be paid within the next 45 days. (1 mark)
Your client's home is insured under an IBC Comprehensive Homeowners Form (IBC 1155). The dwelling
is insured on a Guaranteed Replacement Cost basis
Briefly state the guarantee provided by this endorsement. - Answer-The insurer agrees to pay the full
cost of repairs or replacement of the dwelling even if it is more than the amount of insurance
purchased. (1 mark)
Your client's home is insured under an IBC Comprehensive Homeowners Form (IBC 1155). The dwelling
is insured on a Guaranteed Replacement Cost basis
