Canadian Accredited Insurance Broker (CAIB) One Practice Exam

What is included in the definition of a "building" under insurance terms?

1. Only fixed structures

2. Fixed structures, additions, and materials for maintenance

3. Only permanent fittings and fixtures

4. Only the land on which it is built

The correct answer is: Fixed structures, additions, and materials for maintenance

The definition of a "building" in insurance terms typically encompasses fixed structures, additions, and materials for maintenance. This comprehensive view is necessary because it reflects the various components that comprise a building. Fixed structures refer to the main construction itself, while additions might include expansions or newly constructed sections that are physically attached. Furthermore, materials for maintenance are critical because they signify that upkeep is considered part of the overall insurable entity—this can include items such as shingles, paint, and other supplies necessary to maintain the integrity and functionality of the building. This broad definition ensures that all relevant elements are protected under an insurance policy, allowing for both structural continuity and the ability to perform necessary repairs. Other options fail to capture the full scope of what constitutes a building; for example, only referring to fixed structures neglects vital aspects like additions and maintenance materials, while limiting the definition to permanent fittings and fixtures ignores the overall building framework and associated components. The option focusing solely on the land disregards the concept of insuring the building itself, which is the primary concern in property insurance.