CAIB 2 - Chapter 1 Practice Questions and Correct Answers

The three amounts to be considered when calculating the amount of payment as outlined in the Indemnity Agreement are: 1) the value of the lost or damaged property (ACV) 2) the interest of the insured in the property (ex. financial interest, home, mortgage) 3) the amount of insurance specified on the "Declarations Page" for the loss or damaged property (least amount|) Identify the four categories that buildings may fall into: Residential (ex. home) Non-mercantile (ex. hospitals, nursing homes) Mercantile (ex. drycleaners, bakeries) Manufacturing/Industrial (ex. autobody shops) Three classes of property commercially insured are: building, stock, equipment Identify the two bases that coverage can be provided on: Scheduled All property Property of every description Identify and give an example of each of the five types of property contained in the definition of Building found in the IBC Commercial Property Broad Form 1) Growing plants, trees, shrubs INSIDE the building used for decorative purposes only when insured is the owner of the building (ex. cactus) 2) Materials and equipment supplies ON the premises for maintenance (ex. lumbar, glass) 3) Additions and extensions IN CONTACT with the building (enclosed walk-way between buildings) 4) Permanent fittings and fixtures ATTACHED and FORMING part of the building. (ex. light fixtures, carpeting) 5) Fixed structures PERTAINING to building and located on the premises (ex. fence) [GMAPF] Identify the three conditions pertaining to the coverage for growing plants, trees, etc. - such property was INSIDE the building