Habitual Insurance (Multiple Choice)

Question 1

Which of the following is true?

a) Homeowner insurance is mandatory in Ontario.
b) Most Homeowner policies do not include Liability.
c) An amount for Additional Living Expenses is included in each Homeowner Policy.
d) The Homeowner Policy will cover your best friend for Liability while she is living with you.

Answer 1

c) An amount for Additional Living Expenses is included in each Homeowner Policy.

Question 2

Which of the following statements found in the Homeowner Policy is correct?

a) Personal Property when temporarily removed and stored in a warehouse is covered only for theft from the first day it is stored there.
b) Loss of the insured’s valuable parrot by theft is covered.
c) The deductible clause doesn’t apply in connection with fire losses.
d) The insured may have the option of a replacement cost basis of settlement on his building as long as it is on the same location and is done within a reasonable time, but the insured may be penalized in the amount of settlement if the insured’s building is insured for less than 80% of its value.

Answer 2

d) The insured may have the option of a replacement cost basis of settlement on his building as long as it is on the same location and is done within a reasonable time, but the insured may be penalized in the amount of settlement if the insured’s building is insured for less than 80% of its value.

Question 3

Losses or increased costs of repair due to the operation of any zoning, demolition, repair, or construction law:

a) Are insured.
b) Are not insured but a special policy known as a municipal risk policy can be purchased.
c) Are not insured but various by-law endorsements may be purchased.
d) Are insured and included in this policy.

Answer 3

c) Are not insured but various by-law endorsements may be purchased.

Question 4

The by-law exclusion (choose the incorrect statement):

a) Is not covered by the insurance company unless purchased as an endorsement.
b) Is an exclusion that an insurance company places on a risk to avoid paying increased building costs resulting from municipal or provincial by-laws.
c) Allows the insurance company to waive the right to use replacement cost under the basis of claims section.
d) None of the above are incorrect.

Answer 4

c) Allows the insurance company to waive the right to use replacement cost under the basis of claims section.

Question 5

Which of the following are not included in the definition of Dwelling Building?

a) An attached garage.
b) A permanently installed swing set.
c) An outdoor swimming pool.
d) Building material at a lot 1.5km away.

Answer 5

d) Building material at a lot 1.5km away.

Question 6

Which of the following does not have a special limit of insurance for Personal Property?

a) Jewelry and furs.
b) Numismatic property.
c) Fine arts.
d) Money or bullion.

Answer 6

c) Fine arts.

Question 7

Additional Living Expenses (choose the incorrect statement):

a) Covers extra expenses as a result of your home becoming uninhabitable as a result of an insured peril.
b) Cover extra expenses until your home is habitable.
c) Cover all your bills as a result of your home becoming uninhabitable as a result of an insured peril.
d) Cover additional transportation costs to get children to and from school.

Answer 7

c) Cover all your bills as a result of your home becoming uninhabitable as a result of an insured peril.

Question 8

Which of the following have no limit on the amount paid (other than policy limits)?

a) Silverware.
b) Freezer Food.
c) Coins.
d) Professional tools.

Answer 8

a) Silverware.

Question 9

The roof of a townhouse condominium is damaged by an insured peril but the building policy does not contain sufficient insurance to pay for the complete loss. To cover such a situation, an insured should have:

a) Additional Living Expense.
b) Off premises coverage.
c) Extended Liability.
d) Coverage A1 - Condominium Unit.

Answer 9

d) Coverage A1 - Condominium Unit.

Question 10

Your client has recently purchased a condominium townhouse with a fully finished basement that was completed by the previous owner. Which coverage below would ensure the client is protected?

a) Unit Improvements and Betterments.
b) Replacement cost.
c) Loss Assessment.
d) Unit Owners Contingent Insurance.

Answer 10

a) Unit Improvements and Betterments.

Question 11

If it becomes necessary to move property to protect it from loss, which one of these statements is true?

a) Coverage exists for the remainder of the policy term.
b) Coverage is automatically terminated under the policy.
c) There is no coverage unless an endorsement is issued.
d) The amount of coverage available is the amount that is left over from what has already been incurred for the loss.

Answer 11

d) The amount of coverage available is the amount that is left over from what has already been incurred for the loss.

Question 12

Under the Comprehensive Homeowner Policy, special limits of insurance apply to which property only if it is stolen:

a) Stamp collections.
b) Money.
c) Computer software.
d) Items pertaining to business.

Answer 12

a) Stamp collections.

Question 13

A person decides to renovate their home and as a result they have to obtain temporary residence until the work is completed. What will the Homeowner Policy pay?

a) Nothing.
b) Up to the policy limits for Additional Living Expense.
c) Only 10 per cent of their total living costs.
d) Only 10 percent of their Additional Living Expense.

Answer 13

a) Nothing.

Question 14

Which of the following best describes a Tenant Package Policy?

a) It covers the building and for Liability.
b) There is no coverage for Personal Property.
c) It is the same as a Homeowner Package Policy, except it does not cover the building.
d) It does not cover theft.

Answer 14

c) It is the same as a Homeowner Package Policy, except it does not cover the building.

Question 15

Personal Property insurance may be written on a replacement cost basis which is:

a) The same as actual cash value.
b) Replacement or repair of the damaged property as it cost at the time of the loss with property of like kind and quality with a deduction for depreciation.
c) Replacement or repair of the damaged property as it cost at the time of the loss with property of like kind and quality with no deduction for depreciation.
d) Replacement cost is not offered on Personal Property.

Answer 15

c) Replacement or repair of the damaged property as it cost at the time of the loss with property of like kind and quality with no deduction for depreciation.

Question 16

Which of the following statements is correct in connection with a Homeowner Policy?

a) Only property belonging to the named insured is covered.
b) Actual cash value is not a consideration after total loss of property.
c) The insured gets to choose how losses under Coverages A & B will be settled.
d) There is no co-insurance requirement by the insurer.

Answer 16

c) The insured gets to choose how losses under Coverages A & B will be settled.

Question 17

Which of the following is correct pertaining to the Condominium Unit Owner Policy?

a) The Condominium Unit Owner Policy does not insure contents.
b) The Condominium Unit Owner Policy has no provisions to cover common areas of the condominium complex.
c) The Condominium Corporation does not own the land where the building is located.
d) The Condominium Unit Owner owns the space inside the unit, the contents, and Improvements and Betterments.

Answer 17

d) The Condominium Unit Owner owns the space inside the unit, the contents, and Improvements and Betterments.

Question 18

Which of the following would not be fully covered (ignore the deductible) under a $200,000 Comprehensive Homeowner Policy?

a) A fifty dollar bill which was accidentally thrown in a fireplace with some papers.
b) The loss of a $3,500 emerald ring.
c) A $5,000 fire that extensively damaged the kitchen.
d) Windstorm damage to the garden shed.

Answer 18

b) The loss of a $3,500 emerald ring.

Question 19

Which of the following is not an insured peril under the Comprehensive Homeowner Policy?

a) Impact by vehicle.
b) Flood.
c) Theft.
d) Water Escape.

Answer 19

b) Flood.

Question 20

Which of the following are considered as part of the Dwelling Building as it relates to insured coverages?

a) Garden shed and outdoor trees.
b) Trees, shrubs, and garden tractors.
c) Awnings, plants, lawns, and golf clubs.
d) Building fixtures, swimming pool, and storm doors.

Answer 20

d) Building fixtures, swimming pool, and storm doors.

Question 21

The Additional Living Expense coverage:

a) Will pay all normal living expenses.
b) Is equal to 10% of the amount of building insurance.
c) Is in addition to the amount of the building insurance.
d) Will pay for as long as the insured decides it is necessary.

Answer 21

c) Is in addition to the amount of the building insurance.

Question 22

A Homeowner Policy requires which of the following?

a) The contents to be insured for a specified amount.
b) The building to be insured at its cost of replacement.
c) At least a minimum amount of insurance for Personal Liability.
d) The dwelling to be a single family dwelling only.

Answer 22

b) The building to be insured at its cost of replacement.

Question 23

A Comprehensive Condominium Unit Owner Policy:

a) Does not cover building improvements to the insured unit.
b) Automatically includes necessary Loss Assessment coverage.
c) Insures items such as mirrored walls and closet doors against breakage only.
d) May allow the increase of dollar limits for Additional Living Expenses subject to additional premium.

Answer 23

b) Automatically includes necessary Loss Assessment coverage.

Question 24

The Homeowner Policy:

a) Provides coverage on outbuildings without reducing the building amount by 10%.
b) Provides coverage on outbuildings but reduces building amount by 10%.
c) Provides no coverage on outbuildings.
d) Provides coverage on outbuildings at an increased premium.

Answer 24

a) Provides coverage on outbuildings without reducing the building amount by 10%.

Question 25

The Comprehensive Homeowner Policy excludes loss or damage when the insured knows that the building has been vacant or unoccupied for:

a) More than 60 consecutive days.
b) More than 30 consecutive days.
c) More than 7 consecutive days.
d) More than 14 consecutive days.

Answer 25

b) More than 30 consecutive days.

Question 26

Your insured is driving his 50 HP inboard/outboard watercraft and accidentally backs into an inflatable lifeboat. The propeller from the insured’s boat cuts through the lifeboat and knocks the stem off a diver’s air tank. The air tank acting like a missile takes off through the water and smashes through the hull of a nearby 40 foot cabin cruiser. The cruiser sinks, quickly, and all 5 family members on board drown. Your insured’s policy:

a) Covers all damages regardless of the limits.
b) Excludes watercraft under 26 feet.
c) Includes damage to the lifeboat but excludes damage to the cabin cruiser and the insured’s boat.
d) Covers the Personal Liability up to the limits of the insured’s policy.

Answer 26

d) Covers the Personal Liability up to the limits of the insured’s policy.

Question 27

Which of the following with regard to Section II - Liability Coverage is correct?

a) The Voluntary Medical Payments coverage will include coverage for an insured that falls and injures him/her self on the premises.
b) The Voluntary Payment for Property Damage coverage will protect a child of eight who intentionally scratched a neighbour’s car.
c) The Personal Liability coverage fully protects the insured for injury to others whether or not he/she is negligent or liable.
d) None of the above.

Answer 27

b) The Voluntary Payment for Property Damage coverage will protect a child of eight who intentionally scratched a neighbour’s car.

Question 28

The general purpose of Section II - Liability Coverage is to give the insured protection for:

a) Injuries caused to others when an insured is negligent and held legally liable.
b) Careless use of other people’s property which the insured borrows.
c) Claims for injury done to others whether or not the insured is negligent.
d) Negligently caused damage to his/her own property.

Answer 28

a) Injuries caused to others when an insured is negligent and held legally liable.

Question 29

A member of the insured’s family, properly insured by a Tenant Policy was found to be negligent and liable due to a carelessly handled cigarette which caused injuries and property damage to third party individuals in the apartment building. It also caused fire damage to the portion of the building occupied by the insured. Which coverage of Section II - Liability Coverage would pay these claims?

a) None of these sections.
b) The apartment building owner policy would pay since that policy insured the building.
c) Voluntary compensation.
d) Coverage E: Personal Liability

Answer 29

d) Coverage E: Personal Liability

Question 30

Your client calls to advise you that he has purchased a golf cart to use at the exclusive rendezvous condominium complex. He is happy because he lives at an exclusive residence complex and will enjoy using the golf cart to retrieve his mail and enjoy the sights of complex. You advise your client:

a) Coverage is only available while it is used on private land.
b) Coverage is only available while it was used on a golf course.
c) Coverage is only available while it was used on a camp ground.
d) Coverage would never be extended to golf carts as they are motorized vehicles.

Answer 30

b) Coverage is only available while it was used on a golf course.

Question 31

Which of the following statements is true?

a) Under the Comprehensive Homeowner Policy, Personal Liability is extended to any boat you own.
b) Personal Liability extends coverage to you anywhere in North America.
c) Premises includes a location where you are residing temporarily or which you are using temporarily but subject to conditions.
d) Business means any continuous or part-time pursuit undertaken for financial gain including a trade, profession or occupation.

Answer 31

c) Premises includes a location where you are residing temporarily or which you are using temporarily but subject to conditions.

Question 32

Under Section II - Liability Coverage:

a) The policy will not protect the insured if found negligent for an act of careless smoking.
b) The policy protects an insured if he/she assumes, in a written agreement, liability of other persons in relation to the insured’s premises.
c) There is protection for negligent use of owned outboard watercraft but it is limited to 50 horsepower.
d) There is protection for owned motorized golf carts as long as they are being operated on private property.

Answer 32

b) The policy protects an insured if he/she assumes, in a written agreement, liability of other persons in relation to the insured’s premises.

Question 33

Which of the following is not covered under Section II - Liability Coverage of the Homeowner Policy?

a) The insured lights a bonfire in his garden that gets out of control and spreads to his neighbor’s fence.
b) The insured picks up a hot pot from the stove and gets badly burned by it, causing her to miss several days of work.
c) The insured invites a friend for coffee and the friend trips on a loose rug and breaks his ankle.
d) The insured is out fishing when he accidentally catches his hook in someone’s eye.

Answer 33

b) The insured picks up a hot pot from the stove and gets badly burned by it, causing her to miss several days of work.

Question 34

A fourteen-year-old child deliberately breaks a friend’s bike. Which section of their parent’s Homeowner Policy would cover this?

a) Personal Liability.
b) Voluntary Payment for Property Damage.
c) Additional Living Expense.
d) None of the above.

Answer 34

d) None of the above.

Question 35

A tenant negligently causes a fire which damaged the apartment building. Under which policy is the building damage covered?

a) The Tenant’s Building Policy.
b) The Tenant’s Legal Liability Policy.
c) The Building Owner’s Liability Policy.
d) Each Tenant would be assessed part of the cost of repairs.

Answer 35

b) The Tenant’s Legal Liability Policy.

Question 36

Personal Articles Coverage:

a) Is always subject to a deductible.
b) Automatically overseas any newly acquired article provided it is reported to the insurer within 60 days.
c) Provides protection on scheduled personal articles on an all risk basis and eliminates the deductible.
d) Excludes the peril of theft unless there are visible signs of entry or exit.

Answer 36

c) Provides protection on scheduled personal articles on an all risk basis and eliminates the deductible.

Question 37

Your client has a Seasonal Dwelling which he stores his canoe valued at $200. Your client was away from the cottage for 30 days. Upon his arrival he noticed that the canoe was stolen, the front door was smashed open, and the walls were spray painted. Your client declined coverage for Burglary, Robbery, and Vandalism or Malicious Acts. You advise your client:

a) Nothing at all is covered.
b) Only the canoe is covered.
c) The canoe and the door are covered.
d) Everything is covered.

Answer 37

a) Nothing at all is covered.

Question 38

Your client owns a cottage and leaves the unit unlocked. While away from his cottage some hooligans enter the unit and steal some of his belongings. Your client did not purchase the Vandalism or Malicious Acts coverage. You advise your client:

a) There is no endorsement to protect them against this peril.
b) There is no protection as they didn’t purchase the appropriate coverage.
c) There is no protection but you can add the coverage prior to the date and the incident.
d) This is an insured peril and the claim would be covered less his deductible.

Answer 38

a) There is no endorsement to protect them against this peril.

Question 39

You are given a gift of a very expensive antique crystal decanter and this would usually be insured under:

a) Scheduled Personal Articles Coverage.
b) Fine Arts Coverage.
c) Loss Assessment.
d) Improvements and Betterments.

Answer 39

b) Fine Arts Coverage.

Question 40

Sewer Back-up Coverage:

a) Removes the exclusion on sewer back-up.
b) Provides coverage for increased cost of construction in times of high inflation.
c) May be added to a policy at no extra premium upon request of the insured.
d) Pays for demolition of old buildings when an insured plans to build on the same site.

Answer 40

a) Removes the exclusion on sewer back-up.

Question 41

Under Personal Articles Coverage, it is usual to insure the following:

a) Electrician’s tools and testing equipment.
b) Instruments used by physicians and surgeons.
c) Salesman’s samples.
d) Hobby movie camera and equipment.

Answer 41

d) Hobby movie camera and equipment.

Question 42

A neighboring tree damages your house when it falls during a storm. You are upset and confront your neighbor to pay for the damages to your property. You speak to your insurance broker and she advises you that your insurer would:

a) Pay the claim and ignore your deductible.
b) Refuse to pay because it was a neighbor’s tree.
c) Pay and they would immediately subrogate against the neighbor.
d) Pay the claim subject to your deductible and review the claim to determine if subrogation would be an option.

Answer 42

d) Pay the claim subject to your deductible and review the claim to determine if subrogation would be an option.

Question 43

How would a Seasonal Dwelling be covered?

a) It must have a separate policy and can’t be added to existing Homeowner Policy.
b) It can be added to a Homeowner Policy as a second location.
c) It cannot be insured under a fire policy.
d) It is already covered for All Perils.

Answer 43

b) It can be added to a Homeowner Policy as a second location.

Question 44

Which of the following insured perils is not automatically included under in Secondary Residence Policy?

a) Electricity.
b) Vandalism or Malicious Acts.
c) Riot.
d) Burglary and Robbery.

Answer 44

d) Burglary and Robbery.

Question 45

Which of the following coverages is not automatically included in the Secondary Residence Policy?

a) Personal Property.
b) Property Removed.
c) Additional Living Expense.
d) Dwelling Building.

Answer 45

c) Additional Living Expense.

Question 46

The following is the best description for pair and set:

a) In the event there is a loss of one earring belonging to a set, your client will receive the full value of the set.
b) In the event there is a loss of one earring belonging to a set, the final settlement will be based on a reasonable and fair proportion of the total value of the set.
c) f your client has two tickets to a Bon Jovi concert and he sells one of the tickets he can claim it against his/her policy.
d) In the event there is a loss of one earring belonging to a set, the item becomes worthless and the insurance company has the absolute right to deny the claim.

Answer 46

b) In the event there is a loss of one earring belonging to a set, the final settlement will be based on a reasonable and fair proportion of the total value of the set.

Question 47

Which of the following is true?

a) Homeowner insurance is mandatory in Ontario.
b) Most Homeowner policies do not include Liability.
c) An amount for Additional Living Expenses is included in each Homeowner Policy.
d) The Homeowner Policy will cover your best friend for Liability while she is living with you

Answer 47

c) An amount for Additional Living Expenses is included in each Homeowner Policy.

Question 48

On a Comprehensive Homeowner Policy which of the following statements is true?

a) Coverage on Personal Property of visitors is included if it is on or in the insured’s private residence premises.
b) Unscheduled jewelry, watches, gems, and furs are limited to $5,000 in all for loss caused by theft or mysterious disappearance.
c) Coverage of all Personal Property of visitors is included as long as it is on or in the insured’s private residence premises provided the visitor does not have their own applicable insurance coverage.
d) There is automatic protection for Additional Living Expenses if an insured peril occurs making the premises unfit for occupancy and the indemnity period for this protection is limited to two weeks.

Answer 48

c) Coverage of all Personal Property of visitors is included as long as it is on or in the insured’s private residence premises provided the visitor does not have their own applicable insurance coverage.

Question 49

Which of the following losses is covered under a Tenant Policy?

a) Damage to the building caused by fire that originated from a faulty furnace.
b) Water damage to his contents while he was on summer vacation.
c) Water damage to the interior of the apartment while he was on summer vacation.
d) Lightning damage to the building.

Answer 49

b) Water damage to his contents while he was on summer vacation.

Question 50

What is incorrect about the Personal Articles Coverage?

a) Where a “V” appears beside an item, that article is valued at and insured for the amount shown.
b) If you acquire any type of new item, it will be insured automatically on Personal Articles Coverage for up to $5,000 in value and for up to 30 days.
c) Any deductible shown on the coverage summary page does not apply to this coverage.
d) We will not pay more than $250 for any one coin or stamp that makes up part of a collection.

Answer 50

b) If you acquire any type of new item, it will be insured automatically on Personal Articles Coverage for up to $5,000 in value and for up to 30 days.

Question 51

When are theft losses covered at a Seasonal Dwelling?

a) When the insured has purchased the optional burglary and robbery coverage on the seasonal policy.
b) Theft is covered at any other location the insured owns, rents or occupies while the insured is temporarily living there.
c) Theft losses at a seasonal dwelling are never covered.
d) None of the above.

Answer 51

b) Theft is covered at any other location the insured owns, rents or occupies while the insured is temporarily living there.

Question 52

Your 40-year-old son has moved back home with you. His golf clubs are stolen while he is on vacation. Your broker accurately advises you that:

a) He’s way too old to be living with you and your policy will not cover him.
b) Under the definition of insured, his contents would be covered anywhere in the world.
c) His golf clubs would only be covered while on your premises.
d) He needs his own tenant’s package while he lives with you.

Answer 52

b) Under the definition of insured, his contents would be covered anywhere in the world.

Question 53

There is windstorm damage to the roof top pool at my Condominium. Would the loss be covered?

a) Yes, under my Condominium Unit Owner Policy under Loss Assessment.
b) Yes, under the Condominium Corporation Policy as it is a common area.
c) No. It is not covered at all.
d) Yes, it is covered under my Unit Improvements and Betterments.

Answer 53

b) Yes, under the Condominium Corporation Policy as it is a common area.

Question 54

How much will the insurer pay if my Japanese maple tree is run over by an uninsured drunk driver?

a) There is no coverage under my Homeowner Policy for this.
b) My insurer will pay up to $500 per tree that was damaged.
c) There is no limit on what the policy will pay for trees that are damaged.
d) None of the above.

Answer 54

b) My insurer will pay up to $500 per tree that was damaged.