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CAIB 2 -Terms and Definitions Questions and Answers 100% Solved
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CAIB 2 -Terms and Definitions
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CAIB 2 -Terms and DefinitionsScheduled Coverage - answer refers to policy on which coverage is provided only on that property which is specifically identified or scheduled
All Property - answer refers to policy used to insure building, equipment and stock under
a single limit of Insurance
Tenants Improvement - answer building improvements, alteration and betterments made at expense of or purchased by the insured to a building occupied by the insured and which are not otherwise insured, provided the insured is not actual owner of such building
Actual Cash Value - answer the replacement or repair cost less depreciation
Replacement Value - answer represents the costs to repair, replace or rebuild the lost or damaged property without deduction for depreciation
Reinsurance - answer involves an insurer to cede part of the risk it has assumed to one or more other insurer
Subscription - answer an insurance policy under which a group of insurers has agreed to participate in providing policy insurance coverages
Condition - answers something that imposed by the insurer that requires the insured to do or not to do something
Subrogation - answerrefers to the right of the insurer to "step into the shoes" of the party
whom it has compensated and sue any party whom the compensated party could have sued
Warranty - answeris a promise that the certain facts are as they are represented to be and that they will remain so.
Material Fact - answera fact which if communicated to the Insurer would effect it ether to
decline the insurance all together, or not accept it unless higher premium is paid
Fraudulent - answerto act wilfully and with specific intent to deceive or cheat
Void contract - answeris the one which has no "legal or binding force" and as such , "is incapable of being enforced by law" Fire Resistive - answerbuilding which has met minimum standards in terms of hours it will withstand a specific, carefully controlled fire
Non-combustible - answerall structural members including floors, roofs and their supports are constructed of steel, iron, concrete or other non-combustible materials
Common Hazards - answerconditions common to all building which influence their potential for loss
Detachment - answerrefers to the proximity of the building insured or containing the property insured to other commercially rated buildings
Adverse Selection - answeroccurs when the applicants for insurance are largely those most likely to suffer a loss
Risk Classification - answerrefers to the grouping or classifying of risks according to established criteria, which in large part, is based on their probability for loss as a class
Soft Market - answercharacterized by intense competition between insurers. As a result,
rates tend to be low
Hard Market - answeroccurs when low profits margins force out of the competition, as a result, insurers use a more disciplined underwriting approach which gives to the insured
little or nothing in the way of rate discounts
Hazard - answeris a condition which may cause a peril to occur
Physical Hazard - answera condition relating to the use of tangible property which could
cause a peril to occur
Moral Hazard - answersubjective characteristics of the applicant that could cause a peril
to occur
Morale Hazard - answerdeals with the attitude of the client
Accommodation Business - answerbusiness which is marginal or substandard but which
the insurers agrees to accept as a favour or accommodation to the broker
Supporting Business - answerthe existence of other insurance policies the applicant has
with the same insurer
Centrifugal Force - answerthe inertia of a body that tends to move it away from the centre around which it revolves
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