CAIB 2 Practice Exam Questions with Answers
Scheduled Coverage - ✔✔Refer to policy on which coverage is provided only on that property
which is specifically identified or scheduled
Property of Every Description - ✔✔Refers to policy used to insure buildings, stock and
equipment under a single limit of insurance
All Property (Blanket) - ✔✔A policy which under all property owned by the insured is covered
or "blanketed" by a single limit of insurance
Tenant Improvement - ✔✔Building improvement, alteration and betterment made at the
expense of or purchased by the insured to a building occupied by the insured and which are
not otherwise insured, providing the insured is not the actual owner of the building
Actual Cash Value - ✔✔The replacement or repair cost less depreciation
Replacement Value - ✔✔Represents the cost to repair, replace or rebuild the lost of damaged
property without deduction for depreciation ( KEY DIFFERENCE - DEDUCTION WITHOUT
DEPRECIATION)
Reinsurance - ✔✔involves the insurer ceding of part of the risk it has assumed to one or more
other insurers (insurers sharing of the policy betw insurers)
Subscription - ✔✔An insurance policy under which a group of insurers has agreed to participate
in providing policy insurance coverage (brokers sharing the policy among in insurers
Conditions - ✔✔Something imposed by the insurer which requires the insured to do or not do
something
, Subrogation - ✔✔Refers to the right of the insurer to "step into the shoes" of the party whom it
has compensated and sue any party whom the compensated party could have sued
Warranty - ✔✔A promise that a certain fact areas they are represented to be and that they will
remain so (promise represented to be and remain so)
Material Fact - ✔✔Fact which communicated to the insurer would induce it either to decline
the
insurance altogether, or not accept it unless a higher premium is paid
Fraudulent - ✔✔To act willfully, and with the specific intent to deceive or cheat
Void Contract - ✔✔One which has NO "LEGAL OR BINDING FEE" and as such, "is incapable of
being enforced bylaw"
Fire Resistive - ✔✔Building which have met minimum standards in terms of hours it will
withstand a specific, carefully controlled test fire
Non-Combustible - ✔✔All structural members, including floors, roofs, and their supports are
constructed of steel, tron, concrete or other noncombustible
materials. Fall just short of fire
resistive.
Common Hazards - ✔✔conditions common to all buildings which influence their potential for
loss
Scheduled Coverage - ✔✔Refer to policy on which coverage is provided only on that property
which is specifically identified or scheduled
Property of Every Description - ✔✔Refers to policy used to insure buildings, stock and
equipment under a single limit of insurance
All Property (Blanket) - ✔✔A policy which under all property owned by the insured is covered
or "blanketed" by a single limit of insurance
Tenant Improvement - ✔✔Building improvement, alteration and betterment made at the
expense of or purchased by the insured to a building occupied by the insured and which are
not otherwise insured, providing the insured is not the actual owner of the building
Actual Cash Value - ✔✔The replacement or repair cost less depreciation
Replacement Value - ✔✔Represents the cost to repair, replace or rebuild the lost of damaged
property without deduction for depreciation ( KEY DIFFERENCE - DEDUCTION WITHOUT
DEPRECIATION)
Reinsurance - ✔✔involves the insurer ceding of part of the risk it has assumed to one or more
other insurers (insurers sharing of the policy betw insurers)
Subscription - ✔✔An insurance policy under which a group of insurers has agreed to participate
in providing policy insurance coverage (brokers sharing the policy among in insurers
Conditions - ✔✔Something imposed by the insurer which requires the insured to do or not do
something
, Subrogation - ✔✔Refers to the right of the insurer to "step into the shoes" of the party whom it
has compensated and sue any party whom the compensated party could have sued
Warranty - ✔✔A promise that a certain fact areas they are represented to be and that they will
remain so (promise represented to be and remain so)
Material Fact - ✔✔Fact which communicated to the insurer would induce it either to decline
the
insurance altogether, or not accept it unless a higher premium is paid
Fraudulent - ✔✔To act willfully, and with the specific intent to deceive or cheat
Void Contract - ✔✔One which has NO "LEGAL OR BINDING FEE" and as such, "is incapable of
being enforced bylaw"
Fire Resistive - ✔✔Building which have met minimum standards in terms of hours it will
withstand a specific, carefully controlled test fire
Non-Combustible - ✔✔All structural members, including floors, roofs, and their supports are
constructed of steel, tron, concrete or other noncombustible
materials. Fall just short of fire
resistive.
Common Hazards - ✔✔conditions common to all buildings which influence their potential for
loss
