CIB (CERTIFIED INSURANCE BROKER) EXAM COMPLETE
QUESTIONS AND 100% VERIFIED ANSWERS (PASS GUARANTEE)
1. What is insurance? A contract where an insurer promises to indemnify the
insured against specified losses in exchange for premium payments.
2. What is the principle of indemnity? The principle that insurance should
restore the insured to the same financial position they were in before the loss,
neither more nor less.
3. What is insurable interest? The legal right to insure arises from a financial
relationship between the insured and the subject matter of insurance.
4. When must an insurable interest exist in property insurance? At the time
of loss.
5. When must an insurable interest exist in life insurance? At the inception
of the policy.
6. What is utmost good faith (uberrimae fidei)? A fundamental insurance
principle requiring both parties to act honestly and disclose all material facts.
7. What is a material fact? Any fact that would influence a prudent insurer in
deciding whether to accept a risk or the terms of acceptance.
8. What is proximate cause? The active, efficient cause that sets in motion a
chain of events leading to a loss without the intervention of another independent
source.
9. What is subrogation? The right of an insurer who has paid a claim to step
into the shoes of the insured and pursue recovery from responsible third parties.
10. What is contribution? The right of an insurer who has paid more than its
share of a loss to seek recovery from other insurers covering the same risk.
11. What is a peril? The actual cause of loss, such as fire, theft, or collision.
,12. What is a hazard? A condition that increases the likelihood or severity of a
loss.
13. What are the three types of hazards? Physical hazard, moral hazard, and
morale hazard.
14. What is a physical hazard? Tangible conditions that increase the chance of
loss (e.g., icy roads, faulty wiring).
15. What is a moral hazard? Dishonest tendencies that increase the likelihood
of loss (e.g., arson for profit).
16. What is a morale hazard? Careless attitude or indifference to loss because
insurance exists.
17. What is risk? The uncertainty concerning loss; the chance of loss
occurring.
18. What are the two types of risk? Pure risk (only loss or no loss possible)
and speculative risk (profit, loss, or no change possible).
19. What type of risk is insurable? Pure risk only.
20. What is risk management? The systematic process of identifying,
analyzing, and addressing risk exposures.
21. What are the four risk management techniques? Avoidance, reduction,
retention, and transfer.
22. What is risk avoidance? Eliminating a risk entirely by not engaging in the
activity.
23. What is risk reduction? Implementing measures to decrease the frequency
or severity of losses.
24. What is risk retention? Accepting the risk and bearing losses that occur.
25. What is risk transfer? Shifting the financial burden of risk to another
party, typically through insurance.
26. What is an insurance policy? A written contract between insurer and
insured outlining coverage terms, conditions, and exclusions.
27. What is a premium? The price paid for insurance coverage.
28. What is a deductible? The amount the insured must pay out-of-pocket
before insurance coverage begins.
, 29. What is coinsurance? A policy provision requiring the insured to maintain
coverage equal to a specified percentage of property value or share in losses.
30. What is a named perils policy? Coverage that only protects against perils
specifically listed in the policy.
31. What is an all-risk (open perils) policy? Coverage that protects against all
perils except those specifically excluded.
32. What is a declaration? The section of a policy containing specific
information about the insured and the property/risk covered.
33. What is an insuring agreement? The section of a policy describing the
coverage provided and insurer's promise to pay.
34. What are policy conditions? Requirements that must be met for coverage
to apply.
35. What are policy exclusions? Specific perils, losses, or property not covered
by the policy.
36. What is an endorsement? A written document that modifies the original
insurance policy.
37. What is a rider? Another term for endorsement, commonly used in life
insurance.
38. What is aggregate limit? The maximum amount an insurer will pay for all
losses during the policy period.
39. What is per occurrence limit? The maximum amount an insurer will pay
for a single loss event.
40. What is actual cash value (ACV)? Replacement cost minus depreciation.
41. What is replacement cost? The cost to replace damaged property with new
property of similar kind and quality.
42. What is agreed value? A predetermined amount the insurer agrees to pay
in the event of total loss.
43. What is a warranty in insurance? A statement that must be literally true;
breach voids coverage.
44. What is a representation? A statement believed to be true to the best of
one's knowledge; must be substantially correct.
45. What is concealment? Intentional failure to disclose known material facts.
QUESTIONS AND 100% VERIFIED ANSWERS (PASS GUARANTEE)
1. What is insurance? A contract where an insurer promises to indemnify the
insured against specified losses in exchange for premium payments.
2. What is the principle of indemnity? The principle that insurance should
restore the insured to the same financial position they were in before the loss,
neither more nor less.
3. What is insurable interest? The legal right to insure arises from a financial
relationship between the insured and the subject matter of insurance.
4. When must an insurable interest exist in property insurance? At the time
of loss.
5. When must an insurable interest exist in life insurance? At the inception
of the policy.
6. What is utmost good faith (uberrimae fidei)? A fundamental insurance
principle requiring both parties to act honestly and disclose all material facts.
7. What is a material fact? Any fact that would influence a prudent insurer in
deciding whether to accept a risk or the terms of acceptance.
8. What is proximate cause? The active, efficient cause that sets in motion a
chain of events leading to a loss without the intervention of another independent
source.
9. What is subrogation? The right of an insurer who has paid a claim to step
into the shoes of the insured and pursue recovery from responsible third parties.
10. What is contribution? The right of an insurer who has paid more than its
share of a loss to seek recovery from other insurers covering the same risk.
11. What is a peril? The actual cause of loss, such as fire, theft, or collision.
,12. What is a hazard? A condition that increases the likelihood or severity of a
loss.
13. What are the three types of hazards? Physical hazard, moral hazard, and
morale hazard.
14. What is a physical hazard? Tangible conditions that increase the chance of
loss (e.g., icy roads, faulty wiring).
15. What is a moral hazard? Dishonest tendencies that increase the likelihood
of loss (e.g., arson for profit).
16. What is a morale hazard? Careless attitude or indifference to loss because
insurance exists.
17. What is risk? The uncertainty concerning loss; the chance of loss
occurring.
18. What are the two types of risk? Pure risk (only loss or no loss possible)
and speculative risk (profit, loss, or no change possible).
19. What type of risk is insurable? Pure risk only.
20. What is risk management? The systematic process of identifying,
analyzing, and addressing risk exposures.
21. What are the four risk management techniques? Avoidance, reduction,
retention, and transfer.
22. What is risk avoidance? Eliminating a risk entirely by not engaging in the
activity.
23. What is risk reduction? Implementing measures to decrease the frequency
or severity of losses.
24. What is risk retention? Accepting the risk and bearing losses that occur.
25. What is risk transfer? Shifting the financial burden of risk to another
party, typically through insurance.
26. What is an insurance policy? A written contract between insurer and
insured outlining coverage terms, conditions, and exclusions.
27. What is a premium? The price paid for insurance coverage.
28. What is a deductible? The amount the insured must pay out-of-pocket
before insurance coverage begins.
, 29. What is coinsurance? A policy provision requiring the insured to maintain
coverage equal to a specified percentage of property value or share in losses.
30. What is a named perils policy? Coverage that only protects against perils
specifically listed in the policy.
31. What is an all-risk (open perils) policy? Coverage that protects against all
perils except those specifically excluded.
32. What is a declaration? The section of a policy containing specific
information about the insured and the property/risk covered.
33. What is an insuring agreement? The section of a policy describing the
coverage provided and insurer's promise to pay.
34. What are policy conditions? Requirements that must be met for coverage
to apply.
35. What are policy exclusions? Specific perils, losses, or property not covered
by the policy.
36. What is an endorsement? A written document that modifies the original
insurance policy.
37. What is a rider? Another term for endorsement, commonly used in life
insurance.
38. What is aggregate limit? The maximum amount an insurer will pay for all
losses during the policy period.
39. What is per occurrence limit? The maximum amount an insurer will pay
for a single loss event.
40. What is actual cash value (ACV)? Replacement cost minus depreciation.
41. What is replacement cost? The cost to replace damaged property with new
property of similar kind and quality.
42. What is agreed value? A predetermined amount the insurer agrees to pay
in the event of total loss.
43. What is a warranty in insurance? A statement that must be literally true;
breach voids coverage.
44. What is a representation? A statement believed to be true to the best of
one's knowledge; must be substantially correct.
45. What is concealment? Intentional failure to disclose known material facts.
