C14 – Test your Knowledge, Multiple Choice Flashcards
The Law of Large Numbers states that the accuracy of predicting a future event is related to the
a. frequency of the past observations used
b. claims costs arising from past occurrences
c. size of the sample of past observations used
d. location of the type of risk
c. size of the sample of past observations used
To increase limits or to lower deductibles, insureds in Manitoba can purchase extension insurance from
a. Auto Pak
b. Autopac
c. Auto Pak and private insurers
d. Autopac and private insurers
d. Autopac and private insurers
What is the percentage priority in British Columbia that bodily injury claims have over property damage claims in respect to Priorities of Payment?
a. 20%
b. 50%
c. 75%
d. 90%
d. 90%
Which of the following is considered carrying passengers for compensation or hire under the SPF1?
a. driving current or prospective clients
b. driving a domestic worker hired by the insured or the insured’s spouse
c. driving customers to and from locations such as airports or hotels, and on sightseeing excursions
d. driving children to and from school activities that are conducted within an educational program
c. driving customers to and from locations such as airports or hotels, and on sightseeing excursions
In which of the following situations would Accident Benefits be provided by Autoplan:
a. Suicide
b. attempted suicide
c. cyclists injured in a motor vehicle accident
d. motor vehicle involved in a race or speed test
c. cyclists injured in a motor vehicle accident
The primary objectives of any special industry program for insurance availability should include
a. equal sharing of the insurance market by all insurers
b. equitable sharing of the residual market by all insurers
c. proportional sharing of the insurance market by all underwriters
d. all of the above
b. equitable sharing of the residual market by all insurers
The QPF 1 is NOT suitable for covering which of the following?
a. private passenger vehicles
b. recreational vehicles
c. garage risks
d. motorcycles
c. garage risks
An insurer’s best defense against absolute liability claims is to
a. hire effective legal representation
b. use the defense of misrepresentation
c. ensure you prove onus probandi
d. do research before binding coverage
d. do research before binding coverage
Subrogation is the transfer of legal rights to the
a. insurer
b. insured
c. third party injured
d. crown
a. insurer
While driving home from his job in Toronto, Joe hits a pothole in the road and loses control of his vehicle, crashing into a third party’s fence. Joe has an OAP 1 with Collision coverage.
What part of the policy would pay to repair the third party’s fence?
a. DCPD coverage
b. Third Party Liability coverage
c. Loss or Damage coverage
d. Uninsured Automobile coverage
b. Third Party Liability coverage
While driving to work, Dominique is involved in an accident with another vehicle, in which the other driver is 100% at fault. There were several individuals who witnessed the accident take place. The accident caused serious damage to the Dominique’s vehicle, which was covered by his own insurer.
In this scenario who is considered the first party?
a. Dominique
b. the witnesses
c. the insurance company
d. the other driver
a. Dominique
Which of the following is an example of a temporary substitute automobile?
a. you test drive a new vehicle when shopping for cars
b. you borrow your wife’s vehicle to go to the grocery store
c. a friend lends you their vehicle while your vehicle is in for repairs
d. you lease a vehicle for six months while working overseas in another country
c. a friend lends you their vehicle while your vehicle is in for repairs
One of the Accident Benefits that Autoplan provides is
a. funeral expenses
b. tax benefits
c. legal expenses
d. life benefits
a. funeral expenses
Which of the following provinces has NOT established a rate board to control automobile insurance rates?
a. New Brunswick
b. Newfoundland
c. Nova Scotia
d. Saskatchewan
d. Saskatchewan
In New Brunswick, Uninsured Motorist coverage is
a. separate from Accident Benefit coverage
b. an optional coverage
c. included in Accident Benefit coverage
d. included in Third Party Liability coverage
a. separate from Accident Benefit coverage
As per the Insurance (Vehicle) Act, B.C. residents that are injured or killed, or whose property is damaged by an uninsured or unidentified driver is provided with automatic coverage of up to
a. $ 200,000
b. $ 250,000
c. $ 500,000
d. $ 1,000,000
a. $ 200,000
Under DCPD coverage in New Brunswick, fault is determined using
a. fault determination rules
b. the Driver’s Fault Chart
c. liability rules
d. court decisions
a. fault determination rules
A car year is the measurement of
a. an insurer’s exposure
b. the year the insured vehicle was made
c. the condition of the insured vehicle
d. the mileage on the insured vehicle
a. an insurer’s exposure
Other than the insurer’s reinsurance treaties, limits for Section A—Liability Coverage stated in the limit table are based on the
a. extent to which the insurer is willing to expose its own net account
b. types of classes and risks that the insurer will write
c. total amount of premium collected
d. the insurer’s yearly profit projections
a. extent to which the insurer is willing to expose its own net account
Under Prescribed Condition 8, action or proceedings against the insurer may be brought within
a. 1 year from the occurrence of loss or damage
b. 2 years from the occurrence of loss or damage
c. 3 years from the occurrence of loss or damage
d. 5 years from the occurrence of loss or damage
b. 2 years from the occurrence of loss or damage
If loss or damage occurs to an insured’s vehicle a proof of loss should be submitted to the insurer 90 days from when the
a. accident occurred
b. claim was reported
c. damage was assessed
d. police report occurred
a. accident occurred
If the insurer pays the actual cash value of the automobile or exercises its option to replace it, who owns any resultant salvage?
a. the insurer
b. the insured
c. the government
d. it is destroyed
a. the insurer
Hector purchased a basic Autoplan coverage with Collision and Comprehensive coverage. While driving to the store on a rural road, Hector collided with a deer. The deer was fine, but there was $2,000 damage to Hector’s vehicle.
Which of the following subsections would cover Hector’s loss?
a. specified perils
b. comprehensive
c. collision
d. additional coverage
b. comprehensive
Computer programs that have been programmed to handle some risk selection through flagging the underwriter on the screen are known as
a. flagging underwriting systems
b. risk selection underwriting systems
c. intelligent underwriting systems
d. broad range underwriting systems
c. intelligent underwriting systems
What is the name of the Alberta risk sharing pool that allows automobile insurers to transfer any eligible private passenger automobile insurance exposure they underwrite, up to a pre-defined maximum?
a. grid pool
b. non-grid pool
c. “first chance” risk sharing pool
d. mobile pool
b. non-grid pool
In BC, a verbal application of insurance can only be completed
a. over the phone
b. with proof of ones vehicle registration
c. accompanied by a signed written application
d. in a face-to-face interview in the agent or broker’s office
d. in a face-to-face interview in the agent or broker’s office
What usual function of underwriting is considered illegal for government insurers in British Columbia?
a. selling endorsement coverage
b. selling coverage extensions
c. declining basic insurance coverage
d. lowering insurance rates
c. declining basic insurance coverage
Basic Autoplan insurance includes coverage for
a. loss or damage, third party liability, accident benefits
b. loss of use, third party liability, accident benefits
c. third party liability, accident benefits, first party coverage
d. third party liability, accident benefits, second party coverage
c. third party liability, accident benefits, first party coverage
A minimum liability limit of $500,000 is required in
a. Alberta
b. Newfoundland
c. Nova Scotia
d. Prince Edward Island
c. Nova Scotia
Under the CLEAR system, rate groups for vehicles are based on their
a. claims costs
b. MSRP
c. consumer appeal
d. name brand
a. claims costs
Residual markets are
a. special programs to ensure insurance availability for all unlicensed drivers
b. sponsored by government insurers
c. special programs to ensure insurance availability for risks that are less desirable/more hazardous from an underwriting standpoint
d. special programs to encourage insurance for risks that are more desirable/less hazardous from an underwriting standpoint
c. special programs to ensure insurance availability for risks that are less desirable/more hazardous from an underwriting standpoint
Crown corporations provide automobile insurance in which provinces?
a. Saskatchewan and Manitoba
b. British Columbia and Alberta
c. Manitoba and Ontario
d. Saskatchewan and Alberta
a. Saskatchewan and Manitoba
Under Own Damage coverage, deductibles do NOT apply to losses resulting from
a. fire, hail, or theft of the entire vehicle
b. fire, lightning, or theft of the entire vehicle
c. fire, windstorm, or theft of the entire vehicle
d. fire, earthquake, or theft of the entire vehicle
b. fire, lightning, or theft of the entire vehicle
Lawsuits for motorists and injured passengers are banned in
a. Alberta
b. British Columbia
c. Prince Edward Island
d. Quebec
d. Quebec
In respect to automobile accidents, the onus of proof lies with the
a. crown
b. defendant
c. plaintiff
d. evidence
c. plaintiff
Precedent is
a. judge-made-law
b. established by the Order in Council
c. established by the Lieutenant Governor in Council
d. a statute governing British Columbia Automobile Insurance
a. judge-made-law
Uninsured Motorist coverage is provided under Accident Benefits Coverage in
a. Alberta
b. Newfoundland
c. Nova Scotia
d. Prince Edward Island
a. Alberta
The higher the deductible
a. the lower the premium
b. the higher the premium
c. the lower the risk absorbed by the insured
d. the higher the chance of loss
a. the lower the premium
What is the limit of basic Underinsured Motorist Protection under Autoplan?
a. $ 200,000
b. $ 500,000
c. $ 1,000,000
d. $ 2,000,000
c. $ 1,000,000
In which of the following provinces are Accident Benefits optional?
a. Alberta
b. Newfoundland
c. Nova Scotia
d. Prince Edward Island
b. Newfoundland
Which of the following provinces has a risk sharing pool that is designed to provide affordable automobile insurance to operators with less then six years of driving experience and clean driving records?
a. Alberta
b. British Columbia
c. New Brunswick
d. Nova Scotia
c. New Brunswick
The Fichier central des sinistres automobile is
a. a fraud tracking system
b. an automobile claims tracking system
c. a property damage compensation fund
d. a risk sharing pool
b. an automobile claims tracking system
Specified Perils coverage is typically sold as a combination with which type of coverage?
a. all perils
b. comprehensive
c. collision coverage
d. additional coverage
c. collision coverage
