CAIB 2 - Chapter 1

Question 1

Replacement Value

Answer 1

The cost to repair, replace or rebuild lost or damaged property without deduction for depreciation

Question 2

scheduled coverage

Answer 2

provides coverage only for the property specifically identified on the policy.

Question 3

All property

Answer 3

provides coverage for all property owned by the Insured under one single limit

Question 4

actual cash value (traditional meaning)

Answer 4

formula = ACV = RC - depreciation

Question 5

The difference between package policy and manuscript policy

Answer 5

Package policy: combines all coverages needed for a common business.
Manuscript policies: provides coverages for special exposures for which there’s no package. These have to be custom made according to the special exposure.

Question 6

Two situations where a breach of condition would not result in denial of coverage by the Insurer

Answer 6

When the breach of conditions is unrelated to the loss.
If the Insured had no control over the breach of condition.

Question 7

No Benefits to Bailee

Answer 7

The policy does not remove the responsibility of the Insured property from any person having custody.