Practice Exam for CAIB 1 Latest 2023 latest update with complete solution
447 views 3 purchases
Course
CAIB 1
Institution
CAIB 1
Practice Exam for CAIB 1 Latest 2023 latest update with complete solution
1. Insurers are in the business of assuming the financial risks of others which involves entering into a formal contract. A contract is enforceable at law only when all legal elements have been observed. Insurance contracts ...
Practice Exam for CAIB 1 Latest 2023 latest update with complete solution 1. Insurers are in the business of assuming the financial risks of others which involves entering into a formal contract. A contract is enforceable at law only when all legal elements have been observed. Insurance contracts differ from other formal agreements and are subject to what three additional elements?: Insurable Interest Utmost Good Faith Indemnity 2. Explain the meaning and disadvantage of the following approaches: Avoid - ance of Risk & Control of Risk: Avoidance: Avoidance means that all chance of financial loss has been eliminated or a decision not to do something. The disadvantage is its not very effective as often the elimination of one exposure creates another in its place. Control: taking measures to reduce the frequency and severity of losses. The disadvantage is that not all losses can be controlled, because equipment will not work 100% of the time 3. Identify the three elements that are unique to contracts of insurance:: In- surable Interest, Utmost Good Faith, and Indemnity 4. The Insurance Act restricts payment for an insured loss to those amounts required to indemnify the Insured. Indicate the amount the Insured is legally entitled to receive and the measure used to determine this value.: Entitled to receive payment for the actual amount of the loss, no more and no less. The measure is the value of the object of insurance as it was immediately before the loss. 5. Policies insuring against the peril of fire must contain Fire Statu tory Conditions. Indicate the Statutory Condition and the applicable rules: During the policy term the insured installed a wood burning stove as a secondary heating device. The application indicates that a gas furnace is used to heat the premises.: Material Change. The insured must notify the insurer promptly of any change that serves to increase the chance of loss. After receiving notification of the Material Change the insurer has the option to cancel the policy and return the unearned portion of the premium to the insured; or continue to insure the risk and advise the insured in writing of the additional premium payable. 6. All Homeowners policies describe the Basis of Claim Payment for loss or damage to dwelling building, detached private structures and personal property. Indicate the basis of settlement and conditions: Water used to extinguish a small fire at the Insured's home destroyed all electronic media and records kept by the Insured.: Cost to reproduce lost or damage media from Practice Exam for CAIB 1 Latest 2023 latest update with complete solution duplicates or from originals of the previous generation of the media. The payment for lost records is the cost of blank books, pages, cards or other materials plus the cost of actually transcribing or copying such records. 7. Another option for insuring property values under Homeowners policies is the "Single Limit" basis. Explain how this basis differs from the usual coverage format and the advantage that this approach offers:: Coverages A to D are combined into one single limit. The advantage is that this approach eliminates the coverage restriction otherwise applicable to Coverages B, C and D. 8. The Homeowners Comprehensive Form (IBC 1155) is superior to all other Homeowners policies. State how this policy describes "Insured Perils": This policy "insures against all risks of direct physical loss or damage subject to the exclusions and conditions of this form" 9. Indicate the coverage provided for Emergency Removal Expense under the Mobile Homeowners Form.: Covered up to 5% of the amount of insurance on the dwelling and covers reasonable expenses incurred in disconnecting water and power, and towing or transporting costs. 10. What is the basis of claim payment f or loss or damage to the mobile home, detached private structures and personal property under a Mobile Homeowners Policy?: The basis of claim is Actual Cash Value; payment for loss or damage to personal property is made on the same basis as under Homeowners Forms. 11. Identify two (2) other coverages included under C - Personal Property, which are not found in a Homeowners policy: Improvements or betterments made by or acquired at the expense of the tenant; $500 for damage (excluding fire damage) to the portion of the building occupied by the tenant resulting from theft or attempted theft; Damage caused to the interior of the building by vandalism or malicious acts. 12. Individuals who own one or more units in a multiple unit building have an insurable interest in the building structure, common elements and personal property. Identify and briefly explain three coverages that are unique to the Condominium Unit Owners Policy:: Unit Improvements and Betterments: insures the value of improvements and betterm ents by the insured, including any building, structure or swimming pool, and materials and supplies on the premises for use in such improvements or betterments. Loss Assessment: allows the Insured to claim the amount of an assessment paid due to a loss to collectively owned property if covered under the Insured's policy.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller EXPERTIPS. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.99. You're not tied to anything after your purchase.
