Auto practice Flashcards
1.The Facility Association:
Is an industry plan designed to guarantee availability of insurance for all automobile owners that cannot obtain coverage in the open market
Is an industry plan designed to guarantee availability of automobile insurance for all personal risks but never offers coverage for commercial automobile risks
Is an auto plan run by the Government
Is an automobile insurance plan run by the Brokers Association of Canada
Is an industry plan designed to guarantee availability of insurance for all automobile owners that cannot obtain coverage in the open market
2.The Automobile Insurance policy under Section C – Loss or Damage to Insured Automobile, provides coverage for a temporary substitute automobile. Which statement most closely defines a temporary substitute automobile?
An automobile not owned by the Insured or other household residents, temporarily driven
An automobile owned by the Insured, driven occasionally
An automobile not owned by the Insured, but owned by his dependent son
An automobile owned by the Insured, only driven when damages vehicle is being repaired
An automobile not owned by the Insured or other household residents, temporarily driven
3.Statutory Condition 4 “Requirements Where Loss or Damage to the Automobile” in the S.P.F. No 1 states that the Insured is required to do the following after an accident:
Have the damage to the automobile appraised and repaired within 30 days
Protect the vehicle from further loss or damage at the insured’s expense
Protect the vehicle from further loss or damage at the insurers expense
Turn the salvage over to the insurer before the loss has been settled
Incorrect
Protect the vehicle from further loss or damage at the insurers expense
4.Under the S.P.F. #1 – Section C – Additional Agreements of Insurer the insurer agrees to waive subrogation against every person who, with the Insured’s consent, has care, custody or control of the automobile except?
Without restriction
Except for someone who sells or repairs cars
Person is a member of the insured’s family residing in the same household
The person is a friend of a family member
Except for someone who sells or repairs cars
5.The S.P.F. No. 6 Non-Owned Policy is intended to provide coverage to:
A business whose owned cars are provided to and driven by their salesmen
A business that does not own any vehicles but pays their employees mileage when driving their own vehicles while conducting business for the company.
A business whose owned vehicles are driven by any of their employees
A business whose owned vehicle are driven by the officers, directors and shareholders of the business
A business that does not own any vehicles but pays their employees mileage when driving their own vehicles while conducting business for the company.
6.The S.P.F. No 2 Drivers Policy is specifically designed for:
The owner of a business who provides vehicles for the use of their salespeople
The passenger in a vehicle which is driven by another who does not own the vehicle
The pedestrian who is hit and injured by a driver who does not own the vehicle being driven
A person who drives vehicles owned and licensed by others
A person who drives vehicles owned and licensed by others
7.The S.P.F. No. 4 is specifically tailored to meet the needs of:
Same form as the S.P.F. No. 1 Owner’s Policy
Garage, Dealer or Body Shop type of automobile business’s
May provide legal liability for collision to customer’s vehicles
All of the above
Garage, Dealer or Body Shop type of automobile business’s
8.Under the Standard Owner’s Form S.P.F. No. 1, which of the following uses, unless permission is given by the insurer, are prohibited regardless?
Carrying explosive
Carrying passengers for compensation
Rental or lease of the automobile
Any race or speed test
Any race or speed test
9.The Standard Endorsement Form No. 20 is:
Family Protection Endorsement
Permission to drive non-owned automobiles
Loss of Use Endorsement
Valued Automobile(s) Endorsement
LOU ENDORSEMENT
10.Which of the following endorsements is required to be added to a client’s automobile policy is they purchased their vehicle in a “hail sale”?
SEF 13D
SEF 40
SEF 27
SEF 13H
SEF 13H
11.Which of the following endorsements are required to provide Section C coverage to a non-owned vehicle when it is being used if the insured vehicle is not broken down, lost, destroyed or sold?
SEF 20
SEF 27
SEF 30
SEF 44
SEF 27
2.The Insured is hit by a third party who ran a traffic light. Witnesses have advised that our Insured had a green light. The third party was driving while impaired. How will the SEF 44 respond?
It will indemnify absolute liability only
It will respond up to our Insured’s injury damages, after the initial $200,000 coverage, but within our Insured’s limit of liability
It will pay all our Insured’s injuries
It will pay all insured’s property damage limited by third party absolute liability requirements
It will respond up to our Insured’s injury damages, after the initial $200,000 coverage, but within our Insured’s limit of liability
13.An Insured is allowing their 8 year old son to operate a quad. The S.P.F. No. 1 provides coverage for unlicensed, unqualified or underage drivers while the quad is being used off public highways provided:
An SEF 32 is endorsed to the policy
An SEF 40 is endorsed on the policy
The quad is not being operated across a lake
The quad is not being operated without a helmet
An SEF 32 is endorsed to the policy
14.Your insured is renting a vehicle while on vacation in Florida. They carry Section A, Section B, Section C Subsections 2 and 3 under their Alberta Insured SPF 1. All of the following coverages extend to the rental vehicle except one. Choose the exception:
Damage to the hotel when the insured drives into it
Damage to the hotel concierge when the insured drives into him
Injury to the insured’s son who is injured in the backseat when the insured drives into the hotel
Damage to the rental vehicle when the insured drives into the hotel
Damage to the rental vehicle when the insured drives into the hotel
15.Your insured carries an SPF 1 with an SEF 20. While driving in the USA on vacation, his vehicle is in a vehicle accident and he carries Subsection 2, Collision coverages for the vehicle damage. How will his SEF 20 respond?
It will pay his rental vehicle, effective immediately if the vehicle is undriveable plus will pay hotel costs required while the vehicle is repaired
It will pay his rental vehicle, effective after a 72 hour wait and will pay his hotel costs while the vehicle is being repaired
it will pay his rental vehicle costs, effective immediately if the vehicle is underiveable. The clients auto policy does not cover hotel costs
Depends on the insurance company wording on the SEF 20
it will pay his rental vehicle costs, effective immediately if the vehicle is undriveable. The clients auto policy does not cover hotel costs
16.A man owns a vehicle, and wants to insure it for his wife to drive daily. How will you write the policy?
Write the policy in both names
Write the policy in her name as she is the main driver
Write the policy in his name as he owns the vehicle and has insurable interest, rating the vehicle for her as the principle driver
Write the policy in both names and rate the vehicle for him with his wife as occasional driver
Write the policy in his name as he owns the vehicle and has insurable interest, rating the vehicle for her as the principle driver
17.The SEF 30 is a limitation of liability damage from the Auto policy, making it CGL which picks up third party damages caused by attached equipment on a vehicle. Which endorsement limits physical damage to the attached equipment itself, and makes it Commercial Property Insurance?
SEF 20
SEF 27
SEF 30a
There is no endorsement to limit attached equipment
30A
18.This is a new topic on the newest AIC Level 1 exam. There is a policy called Transportation Network Auto policy, which is for ride-share operators such as Uber, who carry passengers for compensation. How it works is:HINT
The insured is on their own SPF#1 until they accept passengers for compensation with an active app and ride, until they have dropped off that passenger
The insured SPF#1 is held until the ride is dropped off. Therefore, covered under the group policy of SPF#9 while they are engaged in the ride-share (Uber) activity
If something happens to their vehicle or passengers, or liability while the app is actively engaged with passengers, the loss is covered under SPF#9 of Transportation Network
All of the above statements are true
The insured is on their own SPF#1 until they accept passengers for compensation with an active app and ride, until they have dropped off that passenger
19.Section C of an SPF#4, Garage Auto policy is very similar to an SPF#1, Owners form, with one exception. What is the main difference between the SPF#1 Section C choices and the SPF#4 optional coverage for the Garage’s owned vehicles, and customers vehicles in their care, custody and control?
There are no differences. Section C is exactly the same on optional coverages
There is no such thing as All Perils for SPF#4 as there is for SPF#1
There is no Collision offered for customers vehicles in care, custody and control of the Garage
None of the above statements are true
There is no such thing as All Perils for SPF#4 as there is for SPF#1
20.The SPF#1 is designed to cover customers vehicles in the care, custody and control of the Bailee, as well as owned vehicles used for business purposes by the Bailee. Which of the following business(es) needs and SPF#4?
A drycleaner who delivers clean clothing to hotels
A car detailing and car alarm installation company
A hotel with valet parking
A car wash where the customer wand washes their own vehicle
B and C
B & C
133.The SEF 9 is a marine use excluded endorsement, which removes water damage under Comprehensive and All Perils coverages to any vehicle used in water if applied. Insurance is not designed to fix mechanical damages caused by using the vehicle where it is not intended. Commonly, this endorsement is placed on recreational vehicles such as snow machines and ATV’s. Which of the following losses would be excluded if a Standard Endorsement form # 9 (SEF 9) was attached to the Auto policyHINT
Theft of the quad or snowmobile
Collision with a boulder
Riding across a half-frozen lake and sinking
Riding across a half-frozen lake and sinking
- Your insured has a Basic home policy and auto policy insuring Section A, Section B, Section C, Collision and
Comprehensive. They drive into their own home. How will their policies respond?
a. ( ) Damage to the house, Coverage A of the home policy; damage to the auto, Section C Subsection 2 of the auto policy
b. ( ) Damage to the house, Coverage A of the home policy; damage to the auto Section C Subsection 3 of the auto policy
c. ( ) Damage to the house, Section A of the auto policy; damage to the auto Section C Subsection 3 of the auto policy
d. ( ) Damage to the house, Section A of the auto policy; damage to the auto Section C Subsection 2 of the auto policy
d. ( ) Damage to the house, Section A of the auto policy; damage to the auto Section C Subsection 2 of the auto policy
- Section C of S.P.F. No 1 is divided into four subsections. Mark the statement that is FALSE.
a. ( ) Comprehensive covers all risks subject to exclusions
b. ( ) Specified perils covers named perils only
c. ( ) All Perils covers all risks subject to exclusions
d. ( ) Collision or upset does not apply to vehicles carried upon vessels plying between the ports of Canada
and the USA
e. ( ) All of the above
f. ( ) None of the above
f. ( ) None of the above
- The Insured is prohibited from driving or operating an automobile in all of the following circumstances
except one. Choose the exception.
a. ( ) While Insured’s license to drive or operate an automobile is suspended
b. ( ) Unless Insured is either authorized by law or qualified to drive
c. ( ) While under the age of 16 or other age at which a license may be issued to the Insured
d. ( ) For the transporting of clients or customers proposing to do business with the Insured
b. ( ) Unless Insured is either authorized by law or qualified to drive
