CAIB 1 Practice Questions (100) with Complete
Solutions
What elements must be present to constitute a legal contract?
a. Parties to the contract, the contract itself, consideration
b. Parties to the contract, a written document, consideration, and legal purpose
c. Agreement, consideration, legality of object, legal capacity, genuine intention
d. Competent parties, consideration, warranty, and legal purpose c. Agreement,
consideration, legality of object, legal capacity, genuine intention
The act of intentionally giving up some right or privilege is...
a. A representation
b. A transfer
c. A waiver
d. Subrogation c. A waiver
,Insurance purchased by an insurance company is called
a. Reinsurance
b. Risk avoidance insurance
c. Full protection
d. Umbrella insurance a. Reinsurance
The main purpose of an insurance contract is to...
a. Allow the spread of risk
b. Allow insured's to take more risk
c. Protect you from loss
d. Manage income risk a. Allow the spread of risk
A person has a few options when dealing with financial risk: avoidance, retention, control, and
transfer. Which is usually the best option for most people?
a. Avoidance
b. Retention
c. Transfer
, d. Control c. Transfer
Legal capacity of parties is an important part of a contract. Who below has the legal capacity to
enter into an insurance contract?
a. ABC Bakery
b. Black's Hardware
c. Tess' Restaurants Ltd.
d. Blue Duck a.k.a Grey Goos c. Tess' Restaurants Ltd.
Often times, brokers are asked to provide binders to the insured. A binder is...
a. A preliminary contract of insurance
b. Permitted for all risks
c. Binds the insured to certain terms specified by the insurer
d. Binds the insured to certain terms specific by the brokerage a. A preliminary contract
of insurance
Solutions
What elements must be present to constitute a legal contract?
a. Parties to the contract, the contract itself, consideration
b. Parties to the contract, a written document, consideration, and legal purpose
c. Agreement, consideration, legality of object, legal capacity, genuine intention
d. Competent parties, consideration, warranty, and legal purpose c. Agreement,
consideration, legality of object, legal capacity, genuine intention
The act of intentionally giving up some right or privilege is...
a. A representation
b. A transfer
c. A waiver
d. Subrogation c. A waiver
,Insurance purchased by an insurance company is called
a. Reinsurance
b. Risk avoidance insurance
c. Full protection
d. Umbrella insurance a. Reinsurance
The main purpose of an insurance contract is to...
a. Allow the spread of risk
b. Allow insured's to take more risk
c. Protect you from loss
d. Manage income risk a. Allow the spread of risk
A person has a few options when dealing with financial risk: avoidance, retention, control, and
transfer. Which is usually the best option for most people?
a. Avoidance
b. Retention
c. Transfer
, d. Control c. Transfer
Legal capacity of parties is an important part of a contract. Who below has the legal capacity to
enter into an insurance contract?
a. ABC Bakery
b. Black's Hardware
c. Tess' Restaurants Ltd.
d. Blue Duck a.k.a Grey Goos c. Tess' Restaurants Ltd.
Often times, brokers are asked to provide binders to the insured. A binder is...
a. A preliminary contract of insurance
b. Permitted for all risks
c. Binds the insured to certain terms specified by the insurer
d. Binds the insured to certain terms specific by the brokerage a. A preliminary contract
of insurance
