Canadian Accredited Insurance Broker Program CAIB 1
Comprehensive Questions with Their Verified Answers
2025 Rollout!
Avoidance Means that all chance of financial loss has been eliminated
Risk control Taking measures to reduce the frequency and severity of
losses
Planned acceptance of losses by deductibles,
Risk retention deliberate non-insurance, and loss- sensitive
plans where some, but not all, risk is
consciously retained rather than
transferred
Risk transfer Insurance. Persons unable to withstand the
financial consequences look to transfer all, or a
portion of, their risk
Speculative risk Involves the possibility of either financial loss or gain
Pure risk The chance of financial loss which does not, at the
same time, offer a chance of financial gain
Insurance The undertaking by one person to indemnify
another person against loss or liability for loss
Contract Agreement between two or more persons which
creates an obligation to do or not to do a
particular thing
Agreement An offer made; and an unequivocal and
unconditional acceptance of the terms of that offer
Consideration An exchange of something of value between the parties
Minors People under the age of majority
Mental Incompetents People who are insane, senile or possess other
mental defects are judged not to have the legal
capacity to contract
Genuine intention is necessary to show that the agreement between
the parties was not affected by fraud, duress,
concealment, or mistake
, Insurable interest Being able to show that they would suffer financially by a
loss
Utmost Good Faith Sale of Goods Act requires that sellers tell the
truth about their products and that buyers
exercise care in their selection
Void contract which is unable in law to support the purpose
for which it was intended
Voidable Contract One which is void as to the wrongdoer but not
void as to the wronged party, unless he elects to
so treat it
A legal agreement issued by either an agent or
an insurer to provide temporary evidence of
Insurance binder
insurance until a policy can be issued. Binders
should contain definite time limits, should be in
writing, and should clearly designate the
insurer with which the risk is bound
Agency Agreement Offer made and unconditional acceptance of the terms
Peril The cause of the loss
Direct loss When an object is attacked by an insured peril
Indirect loss Arises as a consequence of direct losses. ex. food
in freezer when electrical motor fails.
Actual Cash Value the cost minus depreciation of the insured object
Replacement cost Like kind and quality to lost item
Valued policy Irreplaceable items with predetermined values
Blanket coverage One limit for all property/contents
Scheduled coverage supplemental insurance policy which extends
coverage beyond the standard protection
provided in a homeowners' insurance policy
Comprehensive Questions with Their Verified Answers
2025 Rollout!
Avoidance Means that all chance of financial loss has been eliminated
Risk control Taking measures to reduce the frequency and severity of
losses
Planned acceptance of losses by deductibles,
Risk retention deliberate non-insurance, and loss- sensitive
plans where some, but not all, risk is
consciously retained rather than
transferred
Risk transfer Insurance. Persons unable to withstand the
financial consequences look to transfer all, or a
portion of, their risk
Speculative risk Involves the possibility of either financial loss or gain
Pure risk The chance of financial loss which does not, at the
same time, offer a chance of financial gain
Insurance The undertaking by one person to indemnify
another person against loss or liability for loss
Contract Agreement between two or more persons which
creates an obligation to do or not to do a
particular thing
Agreement An offer made; and an unequivocal and
unconditional acceptance of the terms of that offer
Consideration An exchange of something of value between the parties
Minors People under the age of majority
Mental Incompetents People who are insane, senile or possess other
mental defects are judged not to have the legal
capacity to contract
Genuine intention is necessary to show that the agreement between
the parties was not affected by fraud, duress,
concealment, or mistake
, Insurable interest Being able to show that they would suffer financially by a
loss
Utmost Good Faith Sale of Goods Act requires that sellers tell the
truth about their products and that buyers
exercise care in their selection
Void contract which is unable in law to support the purpose
for which it was intended
Voidable Contract One which is void as to the wrongdoer but not
void as to the wronged party, unless he elects to
so treat it
A legal agreement issued by either an agent or
an insurer to provide temporary evidence of
Insurance binder
insurance until a policy can be issued. Binders
should contain definite time limits, should be in
writing, and should clearly designate the
insurer with which the risk is bound
Agency Agreement Offer made and unconditional acceptance of the terms
Peril The cause of the loss
Direct loss When an object is attacked by an insured peril
Indirect loss Arises as a consequence of direct losses. ex. food
in freezer when electrical motor fails.
Actual Cash Value the cost minus depreciation of the insured object
Replacement cost Like kind and quality to lost item
Valued policy Irreplaceable items with predetermined values
Blanket coverage One limit for all property/contents
Scheduled coverage supplemental insurance policy which extends
coverage beyond the standard protection
provided in a homeowners' insurance policy
