CAIB 2 — CAIB New Edition 1.0 Exam Blueprint

How to Use This CAIB 2 Exam Blueprint

This checklist is an independent study aid for candidates preparing for the Insurance Brokers Association of Canada exam CAIB New Edition 1.0 - CAIB 2, exam code CAIB 2. Use it as a practical readiness map after you have worked through your official course material.

Because exact official exam weightings are not provided here, the sections below are organized as readiness areas, not as scored exam sections. The goal is to help you answer: Can I recognize the client issue, select the relevant coverage concept, identify limitations or exclusions, and explain the broker action clearly?

Use the checklist in three passes:

1. Coverage knowledge pass — confirm you know the forms, terms, exclusions, conditions, and endorsements.
2. Scenario judgment pass — test whether you can apply the coverage to realistic client situations.
3. Final review pass — tighten weak distinctions, documentation habits, and client-advice language.

Topic-Area Readiness Table

Core “Can You Do This?” Checklist

Personal Lines Foundations

• Define indemnity and explain why insurance usually aims to restore, not improve, the insured’s financial position.
• Distinguish actual cash value, replacement cost, market value, and rebuilding cost.
• Explain how deductibles, limits, sub-limits, and special limits affect a claim payment.
• Identify the role of policy declarations, insuring agreements, definitions, exclusions, conditions, and endorsements.
• Explain why a material change must be reported.
• Recognize when a client’s representation, omission, or change in use may affect coverage.
• Apply subrogation and contribution concepts in simple claim scenarios.
• Identify when a loss may involve more than one policy or coverage part.

Broker Practice and Client Advice

• Gather enough facts before recommending or placing coverage.
• Identify coverage needs without guaranteeing that a future claim will be paid.
• Explain limitations and exclusions in plain language.
• Document client instructions, declined coverage, and important coverage discussions.
• Recognize when binding coverage may be outside the broker’s authority.
• Treat privacy, consent, and client information as part of the insurance transaction.
• Escalate unclear coverage or underwriting issues rather than guessing.
• Recognize E&O risk when a broker fails to ask obvious follow-up questions.

Habitational Insurance

• Match the client to the correct general policy type: homeowner, tenant, condominium unit owner, landlord/rented dwelling, seasonal, secondary, or other non-standard placement.
• Identify whether the loss involves building, contents, additional living expense, rental income, liability, or a scheduled item.
• Recognize when personal property is subject to special limits.
• Distinguish owner-occupied, tenant-occupied, vacant, and unoccupied risk characteristics.
• Explain how mortgagees or other interests should be reflected.
• Identify how renovations, additions, or changes in occupancy may affect coverage.
• Identify when home-sharing, roomers, boarders, or short-term rental use requires further underwriting review.
• Explain why replacement cost on building or contents may depend on policy conditions.

Condominium, Tenant, and Rental Scenarios

• Explain the difference between the condominium corporation policy and the unit owner’s policy.
• Identify exposures for improvements and betterments, unit owner contents, loss assessment, and deductible assessment.
• Explain tenant legal liability in a rented premises scenario.
• Separate the landlord’s building exposure from the tenant’s personal property exposure.
• Identify rental dwelling exposures, including landlord contents and rental income where applicable.
• Recognize when a client is both a unit owner and a landlord, creating overlapping condo and rental issues.

Personal Property and Floaters

• Identify property categories commonly subject to special limits.
• Explain why high-value jewellery, collectibles, art, musical instruments, sports equipment, or bicycles may need special review.
• Distinguish blanket contents coverage from scheduled property coverage.
• Recognize when appraisal, description, serial number, proof of value, or underwriting information may be needed.
• Explain the difference between theft, mysterious disappearance, breakage, and accidental loss where the policy wording makes the distinction relevant.
• Identify property used for business and explain why personal policies may restrict it.

Personal Liability

• Distinguish first-party property coverage from third-party liability coverage.
• Recognize premises liability, personal activities liability, and liability arising from ownership or occupancy.
• Identify liability issues involving pets, swimming pools, trampolines, social hosting, sports activities, and rented premises.
• Explain why business, professional, intentional, or motorized exposures may require other coverage.
• Identify when defence costs may be relevant to a liability claim.
• Distinguish voluntary payments from legal liability.
• Recognize when umbrella or excess liability discussion may be appropriate.

Personal Automobile Insurance

• Identify the vehicle, registered owner, principal operator, occasional operators, household drivers, and excluded or high-risk drivers where applicable.
• Gather correct vehicle use: pleasure, commuting, business, delivery, rideshare, farming, commercial, or mixed use.
• Distinguish third-party liability, injury benefits, uninsured or underinsured motorist concepts, and physical damage coverages.
• Explain collision, comprehensive, specified perils, and all perils concepts.
• Recognize how deductibles apply to auto physical damage.
• Identify leased, financed, newly acquired, temporary substitute, borrowed, or rented vehicle issues for further review.
• Recognize when modifications, custom equipment, trailers, motorcycles, recreational vehicles, or off-road vehicles require special handling.
• Avoid assuming all provinces use the same forms, benefits, endorsements, or terminology.

Client Fact-Finding Checklist

Use this as a quick readiness tool. For each fact, ask: Would this affect eligibility, coverage, rating, limits, endorsements, or claims handling?

Habitational Coverage Readiness

Policy Type Selection

Property Coverage Parts

Perils and Loss Cause Distinctions

Personal Automobile Readiness

CAIB 2 candidates should be careful with automobile questions because automobile insurance terms, forms, injury benefits, and mandatory coverages vary by province. Prepare using the wording and provincial context assigned in your course material.

Auto Coverage Map

Auto Scenario Cues

Calculation and Settlement Readiness

CAIB 2 is primarily about applied insurance judgment, but you should still be comfortable with basic claim settlement logic.

Basic Settlement Concepts

Know how these ideas affect the amount payable:

• Limit of insurance — the maximum payable for a coverage part, subject to wording.
• Special limit — a lower limit for specified property or loss types.
• Deductible — the portion paid by the insured before the insurer pays.
• Actual cash value — replacement cost less depreciation.
• Replacement cost — cost to repair or replace with new property of like kind and quality, subject to conditions.
• Depreciation — reduction for age, use, wear, or obsolescence.
• Salvage — damaged property with remaining value.
• Subrogation — insurer’s right to recover from responsible third parties after paying.
• Contribution — allocation when more than one policy applies.

Use this general settlement logic, always subject to policy wording:

\[ \text{Claim Payment} = \min(\text{Covered Loss}, \text{Applicable Limit}, \text{Settlement Basis}) - \text{Deductible} \]

For actual cash value:

\[ \text{Actual Cash Value} = \text{Replacement Cost} - \text{Depreciation} \]

For contribution between policies, where contribution applies:

\[ \text{Insurer Share} = \frac{\text{That Policy Limit}}{\text{Total Applicable Limits}} \times \text{Covered Loss} \]

Calculation Prompts

• Given a loss amount, deductible, and limit, can you calculate the maximum payable?
• Given a replacement cost and depreciation amount, can you calculate actual cash value?
• Given a special limit lower than the loss amount, can you apply the special limit before or alongside the deductible as wording requires?
• Given two applicable policies, can you recognize contribution rather than double recovery?
• Given a total loss vehicle scenario, can you distinguish vehicle value, deductible, lienholder interest, and optional waiver of depreciation or replacement cost concepts where applicable?
• Given a contents loss, can you identify whether an item is subject to a special limit or scheduling requirement?

Decision-Point Checks

Personal Lines Placement Triage

    flowchart TD
	    A[Client request or renewal review] --> B{What asset or exposure?}
	    B --> C[Residence or personal property]
	    B --> D[Personal automobile]
	    B --> E[Personal liability exposure]
	    C --> F{Standard occupancy and use?}
	    F -->|Yes| G[Match base habitational form]
	    F -->|No| H[Flag underwriting review: rental, vacancy, business, seasonal, short-term rental]
	    D --> I{Standard personal use?}
	    I -->|Yes| J[Review auto coverage, drivers, vehicle, deductibles]
	    I -->|No| K[Flag business, delivery, rideshare, commercial, special vehicle issue]
	    E --> L{Covered by personal liability?}
	    L -->|Likely| M[Review limits and exclusions]
	    L -->|Unclear| N[Consider endorsement, umbrella, commercial, or specialty coverage review]
	    G --> O[Check limits, endorsements, exclusions, documentation]
	    H --> O
	    J --> O
	    K --> O
	    M --> O
	    N --> O

Scenario Judgment Table

Common Weak Areas and Exam Traps

Coverage Distinctions Candidates Often Blur

Broker Practice Traps

• Failing to document a client’s decision to decline optional coverage.
• Assuming renewal coverage remains suitable after a life, property, or vehicle change.
• Giving a coverage opinion before reading the applicable wording.
• Treating a quote as bound coverage without confirming authority and instructions.
• Not asking about business use, rental use, short-term rental use, or delivery use.
• Not confirming mortgagee, lienholder, lessor, or loss payee information.
• Not recording material conversations in the client file.
• Explaining coverage in broad promises instead of conditional insurance language.
• Missing provincial differences in automobile insurance.
• Confusing insurer underwriting acceptance with claim coverage certainty.

Documentation and Artifact Checklist

For each artifact, be ready to explain its purpose and the risk of poor handling.

Final-Week Checklist

Knowledge Review

• Re-read your official CAIB 2 material for definitions, exclusions, and conditions you commonly confuse.
• Build a one-page table of habitational policy types and the client situations they fit.
• Build a one-page table of auto physical damage coverages and typical loss examples.
• Review special limits for personal property categories in your study material.
• Review water damage categories and the wording-specific treatment of each.
• Review vacancy, unoccupancy, seasonal residence, and rental use issues.
• Review condominium unit owner exposures.
• Review tenant legal liability and rented dwelling exposures.
• Review broker duties around documentation, disclosure, material change, and declined coverage.

Scenario Practice

• Practice deciding the correct coverage part before calculating or explaining anything.
• Practice identifying the missing underwriting fact in each scenario.
• Practice explaining why an endorsement or floater may be needed.
• Practice classifying auto losses as liability, accident benefits/injury, collision, comprehensive, specified perils, or another applicable category.
• Practice water loss scenarios until you can identify the source, path, and coverage issue.
• Practice condo claims until you can separate unit owner, corporation, and assessment issues.
• Practice broker E&O scenarios and identify the better file-handling step.

Exam-Day Readiness

• Read every scenario for role: broker, insured, insurer, claimant, landlord, tenant, condo owner, driver, or third party.
• Identify the policy type before choosing an answer.
• Identify whether the question asks about coverage, underwriting, rating, claims, documentation, or professional conduct.
• Watch for words such as vacant, business, rental, newly acquired, leased, modified, scheduled, excluded, optional, and endorsed.
• Do not rely on everyday meanings when an insurance term has a technical meaning.
• If two answers seem correct, choose the one that best fits the policy wording and broker duty.
• Avoid absolute assumptions unless the facts and wording support them.
• Mark weak questions for review and return after completing the easier items.

Practical Next Step

Use this Exam Blueprint to rank each CAIB 2 readiness area as green, yellow, or red. Spend the next study session on the red areas first, then test yourself with mixed personal-lines scenarios that force you to choose the coverage part, identify the missing client fact, and state the correct broker action.