CAIB 1 Exam Prep Course Practice Questions

Multiple-choice practice exam question from the CAIB 1 Exam Prep Course asking which document is used exclusively to add coverage to an insurance policy. The correct answer, 'Rider,' is selected.
Practice exam question for the CAIB 1 Exam Prep Course: A Rider is used exclusively to add coverage to an insurance policy.
Multiple-choice practice exam question from the CAIB 1 Exam Prep Course asking which elements are special to insurance contracts. The correct answers are Insurable Interest, Utmost Good Faith, and Indemnity. Agreement and Legal Capacity apply to all contracts, not just insurance contracts.
Practice exam question for the CAIB 1 Exam Prep Course: The elements special to insurance contracts are Insurable Interest, Utmost Good Faith, and Indemnity.
Short answer practice exam question from the CAIB 1 Exam Prep Course asking students to list the four ways to deal with risk and give pros and cons of each. The model answer identifies Controlling, Avoidance, Retention, and Transfer (CART), each with explanations.
Practice exam question for the CAIB 1 Exam Prep Course: The four ways to deal with risk are Controlling, Avoidance, Retention, and Transfer (CART), each with advantages and disadvantages.
Multiple-choice practice exam question from the CAIB 1 Exam Prep Course asking which type of risk is not insurable. The correct answer, 'Speculative risk,' is selected, with an explanation that speculative risk involves potential gains such as investing or gambling and therefore cannot be insured.
Practice exam question for the CAIB 1 Exam Prep Course: Speculative risk is not insurable because it involves both potential gains and losses, unlike pure risk which only involves loss.
Multiple-choice practice exam question from the CAIB 1 Exam Prep Course asking what is the most realistic way to deal with risk. The correct answer, 'Transfer,' is selected.
Practice exam question for the CAIB 1 Exam Prep Course: The most realistic way to deal with risk is Transfer, by shifting financial loss to an insurer through insurance.
Short answer practice exam question from the CAIB 1 Exam Prep Course asking about ways changes can be made to insurance policies. The model answer lists endorsement, rider, and floater with short explanations.
Practice exam question for the CAIB 1 Exam Prep Course: Changes to insurance policies can be made through endorsements, riders, and floaters.

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