CAIB 2 Exam Questions and Answers
100% Pass
Scheduled Coverage - ✔✔refers to policy on which coverage is provided only on that
property which is specifically identified or scheduled.
All Property - ✔✔refers to policy used to insure building, stock and equipment under a
single limit of insurance.
Tenants Improvements - ✔✔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 - ✔✔the replacement or repair cost less depreciation
Replacement value - ✔✔represents the costs to repair, replace or rebuild the lost or
damaged property without deduction for depreciation
Reinsurance - ✔✔involves an Insurer ceding part of the risk it has assumed to one or
more other insurers.
Subscription - ✔✔an insurance policy under which a group of Insurers has agreed to
participate in providing policy insurance coverages.
Condition - ✔✔is something imposed by the Insurer which requires the Insured to do or
not to do something.
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, 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 - ✔✔is a promise that certain facts are as they are represented to be and that
they will remain so.
Material fact - ✔✔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 - ✔✔to act wilfully, and with the specific intent to deceive or cheat
Void contract - ✔✔a void contract is one which has no "legal or binding force" and as
such, "is incapable of being enforced by law."
Fire resistive - ✔✔building which has 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, iron, concrete or other non-combustible materials. Exterior also
required to be of non-combustible construction. Falls just short of classifying as fire
resistive.
Common hazards - ✔✔conditions common to all buildings which influence their
potential for loss.
Detachment - ✔✔refers to the proximity of the building insured or containing the
property insured to other commercially rated buildings.
Adverse selection - ✔✔occurs when the applicants for insurance are largely those most
likely to suffer a loss.
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 2
100% Pass
Scheduled Coverage - ✔✔refers to policy on which coverage is provided only on that
property which is specifically identified or scheduled.
All Property - ✔✔refers to policy used to insure building, stock and equipment under a
single limit of insurance.
Tenants Improvements - ✔✔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 - ✔✔the replacement or repair cost less depreciation
Replacement value - ✔✔represents the costs to repair, replace or rebuild the lost or
damaged property without deduction for depreciation
Reinsurance - ✔✔involves an Insurer ceding part of the risk it has assumed to one or
more other insurers.
Subscription - ✔✔an insurance policy under which a group of Insurers has agreed to
participate in providing policy insurance coverages.
Condition - ✔✔is something imposed by the Insurer which requires the Insured to do or
not to do something.
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 1
, 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 - ✔✔is a promise that certain facts are as they are represented to be and that
they will remain so.
Material fact - ✔✔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 - ✔✔to act wilfully, and with the specific intent to deceive or cheat
Void contract - ✔✔a void contract is one which has no "legal or binding force" and as
such, "is incapable of being enforced by law."
Fire resistive - ✔✔building which has 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, iron, concrete or other non-combustible materials. Exterior also
required to be of non-combustible construction. Falls just short of classifying as fire
resistive.
Common hazards - ✔✔conditions common to all buildings which influence their
potential for loss.
Detachment - ✔✔refers to the proximity of the building insured or containing the
property insured to other commercially rated buildings.
Adverse selection - ✔✔occurs when the applicants for insurance are largely those most
likely to suffer a loss.
COPYRIGHT © 2025 BY SOPHIA BENNETT, ALL RIGHTS RESERVED 2
