Canadian Accredited Insurance Broker (CAIB) Two Practice Exam

What is the maximum reimbursement limit for theft from a custodian's private residence under the Inside/Outside Robbery Policy?

1. $1,000

2. $500

3. $1,500

4. No limit

The correct answer is: $500

The maximum reimbursement limit for theft from a custodian's private residence under the Inside/Outside Robbery Policy is $500. This amount reflects the standard coverage cap designated for such situations in typical insurance policies aimed at providing specific protections. Understanding the rationale behind this limit is important because it aligns with risk assessment strategies employed by insurers, where providing a defined maximum for theft from private residences helps manage exposure to loss for the company. It also serves to outline the level of coverage that policyholders can expect, emphasizing the importance of reviewing specific policy details surrounding limits and conditions for different types of theft scenarios. It's beneficial for policyholders to be aware that while some theft coverage might extend to larger amounts, the specific limits tied to certain circumstances, like theft in a custodian's private residence, may be lower due to the increased difficulty in verifying claims and potential for loss. Thus, knowing that the limit is capped at $500 helps prepare insured individuals to consider additional coverage if they require more extensive protection.