Canadian Accredited Insurance Broker (CAIB) One Practice Exam

What constitutes theft in an insurance context?

1. The lending of property without consent

2. The taking of property without the owner's consent by any means

3. The borrowing of items with the intent to return them

4. The purchase of stolen items

The correct answer is: The taking of property without the owner's consent by any means

The definition of theft in an insurance context is centered around the unauthorized acquisition of property. The correct answer highlights that theft occurs when property is taken without the owner's consent, regardless of the method used to take it. This broad definition encompasses a wide range of actions that can be considered theft, including physical theft, deceit, or coercion. This emphasis on lack of consent is crucial in insurance because it underpins the circumstances under which claims might be made for stolen property. Insurance policies typically provide coverage for losses due to theft, which means the insurer needs to establish that the property was indeed taken without permission. In contrast, the lending of property without consent, borrowing with the intent to return, and purchasing stolen items are generally viewed differently in legal and insurance contexts. Lending without consent may not be classified strictly as theft, while borrowing items with the plan to return them does not involve an intention to permanently take the property. Purchasing stolen goods, while illegal, falls under different legal ramifications and does not necessarily reflect the act of theft as it pertains to the original owner's loss.