CAIB 1 · Fundamentals of Insurance · New Edition 1.0
CAIB 1 / Fundamentals of Insurance
Study Guide + Practice Questions — Complete Bundle
Pass the CAIB 1 exam and earn your Level 1 insurance broker licence in BC, SK, MB, NB, NS, PEI, or NL. The only prep bundle that covers all 8 chapters with a complete study guide, textbook-accurate definitions, and 72 practice questions matched to the real exam format — with full model answers and mark-by-mark breakdowns on every question.
✓Complete study guide — all 8 CAIB 1 chapters with textbook-accurate content and key term glossary
✓IBC form numbers, Coverage A–D, the 13 named perils, SPF No. 1 — all exactly as tested
✓72 practice questions — 12 key terms, 20 MC (every wrong answer explained), 40 short answer
✓Every short answer has a model answer + mark breakdown showing exactly how each mark is split
✓Aligned to CAIB New Edition 1.0 — includes ICBC Autoplan Supplement for BC candidates
✓Also covers Fundamentals of Insurance (FOI) exam — same core content, both exams
✓Instant PDF download — 95 pages. Money-back guarantee if you do not pass.
40
Short answer + mark breakdowns
⚠ Important — check your edition before purchasing
This guide is built for the CAIB New Edition 1.0 textbook only. If you are studying from an older textbook or materials from a colleague who wrote the exam before 2026, this guide will not match your course. Not sure which edition you have? Check the front cover of your textbook — it will say New Edition 1.0 if it applies.
What is CAIB 1
Your entry point to becoming a licensed insurance broker
CAIB 1 — Fundamentals of Insurance is the first level of the Canadian Accredited Insurance Broker program. Passing it gives you your Level 1 broker licence and the ability to advise clients on personal lines insurance — home, auto, farm, and travel. It is offered in BC, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, PEI, and Newfoundland and Labrador. Ontario candidates write the RIBO Level 1 exam instead.
The New Edition 1.0 exam format: 12 key term definitions + 10 multiple choice + 26 short answer = 100 marks. You need 60% to pass. You have 3.5 hours. Short answer is 78 of those 100 marks. Most candidates who fail do so because they do not know how marks are awarded on short answer — they write good answers that earn 1 or 2 marks instead of 3. This bundle fixes that.
What’s inside
All 8 chapters — study notes and practice questions for each
The study guide covers every topic tested across all 8 chapters with textbook-accurate definitions, comparison tables for easily confused concepts, IBC form numbers and coverage letter designations, and Exam Trap callouts throughout. Practice questions immediately follow each chapter’s notes.
Chapter 1 — Introduction to General Insurance6 KT · 3 MC · 5 SA
Insurance fundamentals, the four elements of a valid contract, insurable interest, indemnity, utmost good faith, subrogation, proximate cause, pure vs. speculative risk, types of insurers (proprietary vs. non-proprietary), PACICC, the 13 named perils, pro rata vs. short rate cancellation, proof of loss. The most definition-heavy chapter — expect multiple key terms from here on your exam.
Chapter 2 — Habitational Insurance6 KT · 4 MC · 10 SA
The three IBC Homeowners Forms (IBC 1151, 1153, 1155) and what each covers. The 13 named perils in detail. Coverage A through D (property) and Coverage E through H (liability). Extensions of coverage. Special limits for personal property. Off-premises coverage. Key exclusions. 2 Covered / Not Covered scenarios. The highest-tested chapter on CAIB 1 — expect at least one Covered / Not Covered scenario on your exam.
Chapter 3 — Other Habitational Coverages4 KT · 2 MC · 3 SA
Seasonal residence form (IBC 1173) and its four excluded perils. Mobile home coverage. Tenants comprehensive form (IBC 1163). Condominium unit owners form (IBC 1165). Key endorsements: sewer backup, by-laws extension, glass breakage. Why a standard homeowners policy is insufficient for each of these situations.
Chapter 4 — Personal Liability Insurance4 KT · 2 MC · 4 SA
Criminal vs. civil law. Negligence, tort, duty of care. Trespasser / licensee / invitee classification and the different duties owed to each. Special and general damages. Occupier’s liability. Coverage E through H in detail. Voluntary medical payments vs. personal liability — the distinction that costs most marks on this chapter.
Chapter 5 — Farm Insurance2 KT · 1 MC · 3 SA
Farm package policy structure. The definition of farming and custom farming. Residence vs. farm employees. Farm buildings and machinery coverage. Farm liability vs. personal liability. Why a homeowners policy is insufficient for a working farm and what coverage gaps it leaves.
Chapter 6 — Personal Automobile Insurance6 KT · 4 MC · 10 SA
Government vs. private auto insurance by province. SPF No. 1: Section A (third party liability), Section B (accident benefits — three subsections), Section C (loss or damage). Collision vs. Comprehensive — the most tested distinction in this chapter. Uninsured and unidentified automobile coverage. Facility Association. Pink card. Business use disclosures. BC ICBC Autoplan supplement including Enhanced Care and 2021 no-fault changes. Second most tested chapter — know the SPF No. 1 sections and Collision vs. Comprehensive cold.
Chapter 7 — Building Towards Professionalism4 KT · 2 MC · 5 SA
Broker vs. agent distinction and fiduciary duty. Regulation of the insurance industry. E&O coverage and broker obligations. Material misrepresentation and concealment. The application and binding process. Post-loss obligations of the insured. Privacy obligations under PIPEDA.
Chapter 8 — Travel Insurance4 KT · 2 MC · 4 SA
Emergency medical insurance. Trip cancellation vs. trip interruption — the distinction tested every exam cycle. Baggage insurance. Flight accident insurance. Multi-trip annual policies. The stability clause and pre-existing condition exclusions. Key exclusions including government travel advisories and high-risk activities.
Practice questions
72 questions — every format the CAIB 1 exam uses
Questions are written at the difficulty and style of the real CAIB 1 exam. Every answer includes marking notes showing how marks are awarded. Write your answers before checking the model answers.
Part 1 — Key Term Definitions 12 questions · 1 mark each
12 definitions across all 8 chapters. Each includes a Marker Keywords callout showing the exact words that earn the mark — not just the full definition. Covers indemnity, insurable interest, subrogation, utmost good faith, proximate cause, named perils, collision vs. comprehensive, SPF No. 1, and more.
Part 2 — Multiple Choice 20 questions · 1 mark each
20 questions built around the exact distinctions CAIB 1 tests — IBC form coverage, named perils, Collision vs. Comprehensive, SPF No. 1 sections, liability distinctions, and broker professionalism. Every wrong answer is explained so you understand the error in reasoning, not just which answer is correct.
Part 3 — Short Answer 40 questions · 3 marks each
40 questions with full model answers and mark-by-mark breakdowns. Includes Covered / Not Covered scenarios for habitational and auto, multi-part application questions, and broker professionalism scenarios. The hardest questions on the real exam — practiced here first so you know exactly what earns each mark.
Sample question
See exactly what the practice questions look like
Scenario: The insured’s car is parked in their driveway overnight. In the morning they discover a large dent in the driver’s door and a broken headlight. A neighbour confirms they saw a deer running through the yard at around 2 a.m. No other vehicles were involved.
Under Section C of the SPF No. 1, which coverage responds to repair the insured’s vehicle?
(A) Collision or Upset — the vehicle was struck by an object causing damage
(B) Comprehensive — this is damage from a peril other than collision with another vehicle or fixed object ◄ CORRECT
(C) Section A — Third Party Liability covers the insured’s damage to others, not their own vehicle
(D) Section B — Accident Benefits covers bodily injury, not vehicle damage
Why (B) is correct: A deer strike is not a “collision” in the insurance sense. Collision or Upset covers damage from the insured vehicle striking another vehicle or a fixed object, or the vehicle overturning. A deer running into a stationary vehicle is covered under Comprehensive — which covers damage from perils other than collision, including animals.
Why (A) is wrong: This is the most common wrong answer. Candidates assume the physical impact makes it a collision claim. Always ask: did the vehicle collide with another vehicle or a fixed object? If no — it is Comprehensive.
Why (C) is wrong: Section A is third party liability — it covers damage the insured causes to others, not damage to the insured’s own vehicle.
Why (D) is wrong: Section B is accident benefits — it covers bodily injury to the insured and passengers. It has nothing to do with physical damage to the vehicle.
The full bundle contains 72 questions at this level — every one with complete answer rationale and mark breakdowns.
Exam traps
The distinctions that cost CAIB 1 candidates the most marks
EXAM TRAP — Collision vs. Comprehensive
Collision = the insured vehicle strikes another vehicle or a fixed object, or overturns. Comprehensive = everything else (fire, theft, vandalism, animal strikes, falling objects, weather). A deer running into a parked car is Comprehensive, not Collision. This distinction appears on almost every CAIB 1 exam.
EXAM TRAP — All Risks vs. Named Perils — who bears the burden of proof
Under Named Perils, the insured must prove a listed peril caused the loss. Under All Risks (Comprehensive form IBC 1155), the insurer must prove a specific exclusion applies to deny it. An unexplained loss is NOT covered under Named Perils — but IS covered under All Risks. This reversal is one of the most tested distinctions in Chapter 2.
EXAM TRAP — Trip cancellation vs. Trip interruption
Trip cancellation covers costs when you cannot DEPART on your trip as planned. Trip interruption covers costs when your trip is CUT SHORT after you have already departed. The trigger point — before departure vs. after departure — is what the exam tests. Candidates mix these up constantly.
EXAM TRAP — Voluntary medical payments are NOT personal liability
Voluntary medical payments (Coverage F) pay for minor injuries to others regardless of legal liability — no negligence needs to be established. Personal liability (Coverage E) requires negligence. A guest who slips and needs first aid — that is Coverage F, not E. Getting this backwards costs marks on Chapter 4 questions.
EXAM TRAP — Pro rata vs. short rate cancellation
Pro rata = the insurer cancels and refunds the exact unused portion of the premium — no penalty. Short rate = the insured cancels and receives less than the unused portion — a penalty is applied. Who initiates the cancellation determines which method applies. Candidates who confuse which party triggers each method lose marks on Chapter 1 questions.
How to use this bundle
Instant access. One PDF. Study anywhere.
1
Purchase and download immediately — one PDF, 95 pages, delivered instantly. Open on any device, print for paper-based study, or work on screen. No login required after download.
2
Work chapter by chapter — read each chapter’s study notes then immediately work through that chapter’s practice questions. Chapters 2 and 6 are the most heavily tested — plan at least 2 hours on each.
3
Write short answer responses on paper — before reading the model answer. The act of writing forces recall. Check your answer against the mark breakdown to see exactly which point you missed.
4
Use the Master Key Terms Glossary for final review — cover the definition column and test yourself on each term before your exam. The Marker Keywords show exactly what words the marker is looking for.
Reviews
What CAIB 1 candidates are saying
★★★★★
“The mark breakdowns are what made the difference. I kept writing what I thought were complete answers and losing marks — the breakdowns showed me I was missing the exact keyword every time. Passed first attempt.”
Jennifer M. — BC, now Level 1 licenced
★★★★★
“I failed CAIB 1 the first time because I didn’t understand how the short answer marking works. This guide explains it clearly on every question. Used it for my rewrite and passed with 71%.”
Ryan T. — Saskatchewan
★★★★★
“The Collision vs. Comprehensive trap callout saved me — I would have gotten that wrong for sure. The exam trap boxes throughout the guide are worth the price alone.”
Carla B. — Manitoba
FAQ
Frequently asked questions
Is this updated for CAIB New Edition 1.0?
Yes. Aligned to CAIB New Edition 1.0 — includes the ICBC Autoplan Supplement for BC candidates covering the Enhanced Care system and 2021 no-fault changes. If you are studying from an older textbook, check the edition notice at the top of this page before purchasing.
Does this cover the Fundamentals of Insurance (FOI) exam as well?
Yes. The FOI exam and CAIB 1 cover the same core content — habitational, liability, auto, farm, and travel insurance. The FOI exam is multiple choice only (no short answer), so candidates writing FOI will find the MC section especially valuable. All study guide content applies to both exams.
Do I need the CAIB textbook as well?
This bundle is designed to work alongside your CAIB 1 textbook, not replace it. The study guide distils the key content, definitions, and concepts into a focused exam preparation format. Candidates who use both are best prepared — but many candidates use this bundle as their primary resource with strong results.
Which provinces use CAIB 1 for Level 1 licensing?
CAIB 1 is used for Level 1 general insurance broker licensing in BC, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, PEI, and Newfoundland and Labrador. Ontario uses the RIBO Level 1 exam — available separately on MySafetyPrep. Alberta uses the AIC Level 1 exam.
How long does it take to work through?
Most candidates complete the full bundle in 6 to 10 hours. Chapters 2 (Habitational) and 6 (Automobile) are the most content-heavy — plan at least 2 hours each. Chapter 1 has the most key term definitions. Work through one chapter’s notes then immediately do that chapter’s questions before moving on.
What format is it in?
One PDF — 95 pages. Download immediately after purchase. Print it or study on screen. No login required after download.
✓
The most thorough CAIB 1 prep available — 95 pages, instant download.
All 8 chapters. IBC forms, SPF No. 1, the 13 named perils — all exactly as tested. 72 practice questions — definitions with Marker Keywords, MC with every wrong answer explained, 40 short answer with model answers and mark breakdowns. Scoring tracker and master glossary. Covers CAIB 1 and Fundamentals of Insurance. Money-back guarantee if you do not pass.
