CAIB 2 Exam Questions with Correct Answers

Scheduled Coverage - Answer-refers to policy on which coverage is provided only on that property which is specifically identified or scheduled. All Property - Answer-refers to policy used to insure building, stock and equipment under a single limit of insurance. Tenants Improvements - Answer-building improvements, alterations and betterments made at the expense of or purchased by the insured to a building occupied by the insured and which are not otherwise insured, provided the insured is not the actual owner of such building Actual cash value - Answer-the replacement or repair cost less depreciation Replacement value - Answer-represents the costs to repair, replace or rebuild the lost or damaged property without deduction for depreciation Reinsurance - Answer-involves an Insurer ceding part of the risk it has assumed to one or more other insurers. Subscription - Answer-an insurance policy under which a group of Insurers has agreed to participate in providing policy insurance coverages. Condition - Answer-is something imposed by the Insurer which requires the Insured to do or not to do something. Subrogation - Answer-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 - Answer-is a promise that certain facts are as they are represented to be and that they will remain so. Material fact - Answer-a fact which if communicated to the Insurer would induce it either to decline the insurance altogether, or not accept it unless a higher premium is paid. Fraudulent - Answer-to act wilfully, and with the specific intent to deceive or cheat