Chapter 1 Flashcards
RIBO is an acronym for:
a)Real Insurance Brokers of Ontario
b)Registered Insurance Brokers of Ottawa
c)Registered Insurance Brokers of Ontario
d) All of the above
C
RIBO regulates the:
a)Licensing and professional competence of underwriters
b)Licensing and professional competence of Insurance brokers across Canada.
c) Licensing and professional competence of Insurance brokers across Ontario.
d) Licensing and professional competence of policyholders.
C
Which of the following is not an example of speculative risk?
a) Gambling.
b) A home that has been damaged by a windstorm.
c) Starting a new business.
d) A faulty furnace.
B
A building is old and in poor condition. The older electrical wiring caused a small fire last year.
This is an example of:
a) Speculative risk.
b) Moral Hazard.
c) Pure risk.
d) Physical hazard.
D
Which of the following statements is not correct?
a) With pure risk, there is a chance of loss but no chance of profit or financial gain.
b) With speculative risk, there is the possibility of either financial loss or financial gain.
c) With pure risk, there is a chance of either financial loss and/or financial gain.
d) Insurance is based on pure risk
C
Which of the following is an example of personal risk?
a) The cost of repairing or replacing damaged property.
b) The loss of one’s health or life.
c) The loss of business income resulting from a fire at the business.
d) Being held financially responsible for one’s negligent actions.
B
Which of the following is correct?
a) A peril is an event which may cause a loss to occur.
b) A hazard can cause a loss to be less severe.
c) A business that makes heavy machinery is an example of a physical hazard.
d) Moral hazards are easier to detect and correct than physical hazards.
A
A physical hazard is:
a) A type of peril.
b) The same as moral hazard.
c) A physical characteristic of a risk which may give rise to a loss.
d) The possibility of a loss due to the nature of the insured.
C
The item that is insured or covered by an insurance policy is called:
a) The object of insurance.
b) The policy.
c) The peril
d) The hazard
A
In general, when an insurance company indemnifies an insured, it tries to:
a) Put the insured back into the same financial position they were in when they purchased the policy
b) Put the insured back into the same financial position they where in when the loss is finally settled with the insurance company.
c) Better the financial position of the insured.
d) Put the insured back into the same financial position they were in at the time the loss occurred.
D
