Insurance Level 1 Exam Questions

Question 1

CIP Program Requirements

Answer 1

5 Mandatory, 3 applied, 2 Elective

Question 2

The Insurance Council

Answer 2

Is the regulatory body responsible for the licensing and discipline of insurance agents, brokers and adjusters in the province of Alberta.

Question 3

Disclosure of Markets

Answer 3

If an agent or broker can offer only one company, s quote to a prospective client, there is a duty upon you to make this limitation known before excepting and before placing any business on the clients behalf.

Question 4

Confidentiality

Answer 4

Agents or Brokers shall hold in strict confidence all information acquired in the course of the professional relationship concerning the business and affairs of the client, and shall not divulge any such information unless authorized by the client to do so, or required by law to do so in conducting negotiations on behalf of the client.

Question 5

Property and Casualty Insurance Compensation Corporation (PACICC)

Answer 5

An administrative body. When a bankruptcy occurs and claims cannot be paid, the Corporation will then pay all valid claims.
A max, $250 000 for all claims arising from a single occurrence.

Question 6

Common Law

Answer 6

Law of precedents - case by case

All provinces except Qerbec

Question 7

Pair and Set

Answer 7

Only the part that is lost will be covered.

Question 8

Removal Clause Legislated

Answer 8

Items removed to protect from further loss will be covered for 30 days

Question 9

Retrocession

Answer 9

When a reinsurer cedes out to another reinsurer, they become retrocessionaires

Question 10

Premises

Answer 10

The land contained within the lot lines on which the dwelling is situated.

Question 11

The purpose of insurance is to pay for losses that are both;

Answer 11

Accidental and future

Question 12

Statutory Conditions are part of fire, auto and accident and sickness but;

Answer 12

Liability insurance

Question 13

Additional Living Expenses Coverage D

Answer 13

Coverage is over and above what would normally have cost the insured to live had the loss not occurred. ex of this would be

• Cost to place the family pet in a kennel
• taxi fares to take children to and from school
• Costs of moving personal effects to a new temporary location

Question 14

Access prohibited by Order of Civil Authority

Answer 14

Cannot be your home, the insurer agrees to pay the fair rental value for a period not exceeding 2 weeks. Must be from a peril insured by insureds own policy

Question 15

There is no deductible on

Answer 15

Endorsements

Question 16

Property is not covered

Answer 16

against vandalism. water damage, and glass the moment it becomes vacant, or for loss or damage after it has been vacant for more than 30 days.

Question 17

Specified Perils in the Homeowners comprehensive form are;

Answer 17

fire, lighting, explosion, smoke, falling objects, riot, vandalism or malicious acts, water damage, windstorm or hail, transportation

Question 18

Mobile Home Insurance includes;

Answer 18

Coverage A - Dwelling, C- Personal Property and D - Additional living expenses but no B coverage (Detached buildings)

Question 19

Common elements of a condominium policy are;

Answer 19

Parking area
Landscaping
Recreational Areas
Walkways

Question 20

Seasonal Dwelling Insurance

Answer 20

Theft is not covered when you are not there, attempted theft is not covered at all.
Burglary, vandalism or malicious acts and glass breakage can be added for an additional premium.

There is no coverage for loss of property due to change in temp.

• freezer food
• outdoor trees, plants and shrubs

Question 21

Civil law

Answer 21

Settle disputes between individuals or other legal entities.

- Allow victims to seek compensation for the wrong done to them.

Question 22

A third party is;

Answer 22

one who is not a party to the agreement or to a transaction but who may have rights therein.

Question 23

Special Damages;

Answer 23

• can be determined exactly

ex. medical or hospital expenses

Question 24

General damages;

Answer 24

• cannot be determined exactly

ex,, awards for pain or suffering, or the loss of future income

Question 25

Coverage G - Volunteer payments for damage to property

Answer 25

The insurer agrees to voluntarily pay for unintentional damage caused to property of others even when the insured is not liable for such damage.