CAIB 2 - CHAPTER 1 Exam Questions
With Highest Ratings
Only the property specifically listed or scheduled on the policy is insured. - CORRECT
ANSWER-Scheduled coverage.
Building, Stock and Equipment are insured under a single limit of insurance. -
CORRECT ANSWER-Property of Every Description (POED) coverage.
All property owned by the insured is covered or "blanketed" by a single limit of
insurance. (May insure property at more than one location.) - CORRECT ANSWER-All
Property (Blanket) coverage.
1) Building
2) Equipment
3) Stock. - CORRECT ANSWER-The three classes of property insured by commercial
property insurance policies.
It sets the stock coverage to items that are USUAL to the insured's business. -
CORRECT ANSWER-Regarding stock coverage, why it's important to provide a proper
description of the business to the insurer.
- The lost or damaged property is similar to that insured by the policy;
- The insured was under an obligation to insure that property;
- The insured was legally liable for it. - CORRECT ANSWER-"Similar property
belonging to others" is automatically covered under the amounts of insurance for stock
and equipment if...
1) Fixed structures located on the premises;
2) Additions and extensions communicating and in contact with the building;
3) Permanent fitting and fixtures attached to and forming part of the building;
, 4) Materials, equipment and supplies on the premises for maintenance of, and normal
repairs and minor alterations to the building, or for building services;
5) Growing plants, trees, shrubs or flowers inside the building used for decorative
purposes, when the insured owns the building. - CORRECT ANSWER-The five
components found in the definition of "building" in commercial property policies.
The entire area within the property lines and areas and areas under adjoining sidewalks
and driveways at the location described on the Declarations Page, and in or on vehicles
within 100 meters (328 feet) of such locations. - CORRECT ANSWER-"Premises."
1) Merchandise of every description usual to the insured's business;
2) Packing, wrapping and advertising materials;
3) Similar property belonging to others which the insured is under obligation to keep
insured or for which he is legally liable. - CORRECT ANSWER-The three components
found in the definition of "stock" in commercial policies.
1) All contents usual to the insured's business (including furniture, fittings, fixtures,
machinery, tools, etc.) other than "building" or "stock";
2) Similar property belonging to others which the insured is under obligation to keep
insured or for which he is legally liable;
3) Tenant's improvements, which are defined as building improvements, alterations, and
betterments made at the expense of the insured to a "building" occupied but not owned
by the insured, and which are not otherwise insured. - CORRECT ANSWER-The three
components of "equipment" found in commercial policies.
1) Actual Cash Value
2) Replacement Value
3) Book Value. - CORRECT ANSWER-The three ways property may be valued.
The cost to repair or replace lost or damaged property, less the application of any
depreciation. - CORRECT ANSWER-The traditional meaning of Actual Cash Value
(ACV).
With Highest Ratings
Only the property specifically listed or scheduled on the policy is insured. - CORRECT
ANSWER-Scheduled coverage.
Building, Stock and Equipment are insured under a single limit of insurance. -
CORRECT ANSWER-Property of Every Description (POED) coverage.
All property owned by the insured is covered or "blanketed" by a single limit of
insurance. (May insure property at more than one location.) - CORRECT ANSWER-All
Property (Blanket) coverage.
1) Building
2) Equipment
3) Stock. - CORRECT ANSWER-The three classes of property insured by commercial
property insurance policies.
It sets the stock coverage to items that are USUAL to the insured's business. -
CORRECT ANSWER-Regarding stock coverage, why it's important to provide a proper
description of the business to the insurer.
- The lost or damaged property is similar to that insured by the policy;
- The insured was under an obligation to insure that property;
- The insured was legally liable for it. - CORRECT ANSWER-"Similar property
belonging to others" is automatically covered under the amounts of insurance for stock
and equipment if...
1) Fixed structures located on the premises;
2) Additions and extensions communicating and in contact with the building;
3) Permanent fitting and fixtures attached to and forming part of the building;
, 4) Materials, equipment and supplies on the premises for maintenance of, and normal
repairs and minor alterations to the building, or for building services;
5) Growing plants, trees, shrubs or flowers inside the building used for decorative
purposes, when the insured owns the building. - CORRECT ANSWER-The five
components found in the definition of "building" in commercial property policies.
The entire area within the property lines and areas and areas under adjoining sidewalks
and driveways at the location described on the Declarations Page, and in or on vehicles
within 100 meters (328 feet) of such locations. - CORRECT ANSWER-"Premises."
1) Merchandise of every description usual to the insured's business;
2) Packing, wrapping and advertising materials;
3) Similar property belonging to others which the insured is under obligation to keep
insured or for which he is legally liable. - CORRECT ANSWER-The three components
found in the definition of "stock" in commercial policies.
1) All contents usual to the insured's business (including furniture, fittings, fixtures,
machinery, tools, etc.) other than "building" or "stock";
2) Similar property belonging to others which the insured is under obligation to keep
insured or for which he is legally liable;
3) Tenant's improvements, which are defined as building improvements, alterations, and
betterments made at the expense of the insured to a "building" occupied but not owned
by the insured, and which are not otherwise insured. - CORRECT ANSWER-The three
components of "equipment" found in commercial policies.
1) Actual Cash Value
2) Replacement Value
3) Book Value. - CORRECT ANSWER-The three ways property may be valued.
The cost to repair or replace lost or damaged property, less the application of any
depreciation. - CORRECT ANSWER-The traditional meaning of Actual Cash Value
(ACV).
