CAIB 2 - Key Terms Best Exam
Questions & Answers Rated A+
replacement value - CORRECT ANSWER-Cost to repair, replace or rebuild the lost or
damaged property without deduction for depreciation
Scheduled Coverage - CORRECT ANSWER-Coverage for property specifically
identified or scheduled on the insurance policy
All Property - CORRECT ANSWER-All property owned by Insured is covered by a
single limit of insurance. Subject to 90% co-insurance. (Building, stock and equipment)
Tenant's Improvements - CORRECT ANSWER-Building improvements, alterations and
betterment's made at the expense of Insured by a tenant
Actual Cash Value - CORRECT ANSWER-Repair or replace lost or damaged property
less the depreciation
Reinsurance - CORRECT ANSWER-Passing off or "ceding" part of the risk assumed to
one or more reinsurers
Subscription Policy - CORRECT ANSWER-A type of policy where a group of insurers
agree to share in providing coverage.
Condition - CORRECT ANSWER-Something imposed upon an Insured under the policy
that requires them to do or not do something. Can be statutory, policy, other or
additional.
Subrogation - CORRECT ANSWER-The right of the Insurer to "step into the shoes" or
assume the rights of the party who has been compensated. Can sue who the original
party could have sued.
, Warranty - CORRECT ANSWER-A promise that certain facts are true and will remain
so
Material Fact - CORRECT ANSWER-A fact which communicated to the Insurer, would
cause reason to either decline insurance or charge a higher premium
Fraudulent - CORRECT ANSWER-To act willfully and with specific intent to deceive or
cheat for the purpose of causing financial loss to another or financial gain to ones self
Void Contract - CORRECT ANSWER-A contract with no legal or binding force
Fire Resistive - CORRECT ANSWER-A building that has met minimum standards in
hours it will withstand a controlled burn. Generally made of concrete and steel.
Non Combustible - CORRECT ANSWER-A building where all structural members (floor,
roof and supports) are constructed of steel, iron, concrete or other non combustible
material.
Common Hazards - CORRECT ANSWER-Conditions common to all buildings which
influence the potential for loss. Heating, electrical services, detachment, protection and
occupancy.
Detachment - CORRECT ANSWER-The proximity of the building insured to other
commercially rated buildings.
Adverse Selection - CORRECT ANSWER-When the applicant for insurance are largely
those most likely to suffer a loss.
Risk classification - CORRECT ANSWER-The grouping of classifying of risks according
to established criteria
Soft Market - CORRECT ANSWER-Intense competition between insurers. Rates tend
to be abnormally low.
Questions & Answers Rated A+
replacement value - CORRECT ANSWER-Cost to repair, replace or rebuild the lost or
damaged property without deduction for depreciation
Scheduled Coverage - CORRECT ANSWER-Coverage for property specifically
identified or scheduled on the insurance policy
All Property - CORRECT ANSWER-All property owned by Insured is covered by a
single limit of insurance. Subject to 90% co-insurance. (Building, stock and equipment)
Tenant's Improvements - CORRECT ANSWER-Building improvements, alterations and
betterment's made at the expense of Insured by a tenant
Actual Cash Value - CORRECT ANSWER-Repair or replace lost or damaged property
less the depreciation
Reinsurance - CORRECT ANSWER-Passing off or "ceding" part of the risk assumed to
one or more reinsurers
Subscription Policy - CORRECT ANSWER-A type of policy where a group of insurers
agree to share in providing coverage.
Condition - CORRECT ANSWER-Something imposed upon an Insured under the policy
that requires them to do or not do something. Can be statutory, policy, other or
additional.
Subrogation - CORRECT ANSWER-The right of the Insurer to "step into the shoes" or
assume the rights of the party who has been compensated. Can sue who the original
party could have sued.
, Warranty - CORRECT ANSWER-A promise that certain facts are true and will remain
so
Material Fact - CORRECT ANSWER-A fact which communicated to the Insurer, would
cause reason to either decline insurance or charge a higher premium
Fraudulent - CORRECT ANSWER-To act willfully and with specific intent to deceive or
cheat for the purpose of causing financial loss to another or financial gain to ones self
Void Contract - CORRECT ANSWER-A contract with no legal or binding force
Fire Resistive - CORRECT ANSWER-A building that has met minimum standards in
hours it will withstand a controlled burn. Generally made of concrete and steel.
Non Combustible - CORRECT ANSWER-A building where all structural members (floor,
roof and supports) are constructed of steel, iron, concrete or other non combustible
material.
Common Hazards - CORRECT ANSWER-Conditions common to all buildings which
influence the potential for loss. Heating, electrical services, detachment, protection and
occupancy.
Detachment - CORRECT ANSWER-The proximity of the building insured to other
commercially rated buildings.
Adverse Selection - CORRECT ANSWER-When the applicant for insurance are largely
those most likely to suffer a loss.
Risk classification - CORRECT ANSWER-The grouping of classifying of risks according
to established criteria
Soft Market - CORRECT ANSWER-Intense competition between insurers. Rates tend
to be abnormally low.
