Canadian Accredited Insurance Broker (CAIB) One Practice Exam

What does proof of loss refer to?

1. A written description of damages

2. A formal verification, under oath, of the details and amounts claimed

3. A preliminary estimate provided by the insurer

4. An informal statement by the insured

The correct answer is: A formal verification, under oath, of the details and amounts claimed

Proof of loss is a formal document submitted to an insurance company by the insured after a loss occurs. It serves as a critical component in the claims process. This document usually includes a sworn statement that provides detailed information about the loss, including dates, circumstances, and the amounts being claimed. Essentially, it acts as verification of the claim and ensures that the insurer receives verified information to facilitate the settlement of the claim. The comprehensive nature of proof of loss is designed to provide the insurer with an accurate account of the situation, supporting the claims being made. This distinction is vital, as it underscores the significance of providing factual and detailed statements under oath to avoid potential disputes or misunderstandings. In this context, the other options do not capture the formal and sworn nature of proof of loss. A written description of damages may inform the insurer, but it lacks the comprehensive verification aspect. A preliminary estimate provided by the insurer may assist in initial assessments, but it does not serve as a proof of loss. An informal statement lacks the structure and formal affirmation required in the claims process. Ultimately, the correct response reflects the formal verification and sworn statement that constitutes proof of loss.