CAIB 2 Chapter 1 Exam Questions &
Answers Guaranteed Passing Answers
Actual Cash Value - CORRECT ANSWER-replacement cost - depreciation
Reinsurance - CORRECT ANSWER-An insurer cedes part of the risk to their reinsurers.
Subscription Policy - CORRECT ANSWER-A group of insurers come together & agree
to insure a risk
Condition - CORRECT ANSWER-A requirement to do or not to do something
Warranty - CORRECT ANSWER-A promise that certain material facts are true & shall
remain true
Material Fact - CORRECT ANSWER-A fact which if communicated to the insurer, would
effect it to either decline the insurance all together, or surcharge the insured
Scheduled Coverage - CORRECT ANSWER-Coverage where the insured property is
specifically identified (Scheduled) onto the policy. NOTE: No coverage for property or
categories not identified. Can specify limits for each.
All Property (Blanket) Coverage - CORRECT ANSWER-Coverage where all property
owned by the insured is covered under one limit. NOTE: Can even extend to cover
multiple locations & still subject to exclusions.
Premises - CORRECT ANSWER-The entire area within property lines and areas under
adjoining sidewalks and driveways at the locations described on the Declarations Page,
and in or on vehicles within 100 metres
Replacement Value - CORRECT ANSWER-The cost to repair/replace the property with
materials of like kind & quality (No depreciation is applied)
Answers Guaranteed Passing Answers
Actual Cash Value - CORRECT ANSWER-replacement cost - depreciation
Reinsurance - CORRECT ANSWER-An insurer cedes part of the risk to their reinsurers.
Subscription Policy - CORRECT ANSWER-A group of insurers come together & agree
to insure a risk
Condition - CORRECT ANSWER-A requirement to do or not to do something
Warranty - CORRECT ANSWER-A promise that certain material facts are true & shall
remain true
Material Fact - CORRECT ANSWER-A fact which if communicated to the insurer, would
effect it to either decline the insurance all together, or surcharge the insured
Scheduled Coverage - CORRECT ANSWER-Coverage where the insured property is
specifically identified (Scheduled) onto the policy. NOTE: No coverage for property or
categories not identified. Can specify limits for each.
All Property (Blanket) Coverage - CORRECT ANSWER-Coverage where all property
owned by the insured is covered under one limit. NOTE: Can even extend to cover
multiple locations & still subject to exclusions.
Premises - CORRECT ANSWER-The entire area within property lines and areas under
adjoining sidewalks and driveways at the locations described on the Declarations Page,
and in or on vehicles within 100 metres
Replacement Value - CORRECT ANSWER-The cost to repair/replace the property with
materials of like kind & quality (No depreciation is applied)
