CAIB 1 Practice Exam (Long Answer) Rated A+

Your clients suffered a fire loss totalling $87,555. When making the proof of loss, they claimed $1,500 for a stereo unit which they never owned. In the event that the fraud is discovered by the insurer, what portion of the claim, if any, is required to be paid under policy? When the insurer is able to prove fraud, it is entitled to deny the entire claim, and not just that part which was fraudulent. (1 mark The insurer always has the right to decide on how the claim will be settled. It may make payment in the form of cash or rebuild, repair or replace the lost or damaged property. When must the insurer provide the insured with its notice of intention to rebuild, repair or replace? If the insurer decides to repair, rebuild or replace the lost or damaged property, it must advise the insured in writing within 30 days of the receipt of the proof of loss. (1 mark Your client filed a proof of loss 15 days ago. In this case, how much time does the insurer have remaining before the claim must be paid? The loss is payable within 60 days after completion of the proof of loss, unless the contract provides for a shorter period. In this case, as the proof of loss was filed 15 days ago, the claim must be p