MAIN PRACTICE 2 Flashcards
1.All of the following details are required to be shown on an application for Automobile Insurance, except one. Choose the exception.
• The previous registered owner of the vehicle
• License, insurance and loss history
• Particulars of the insured automobile, including registered owner
• Territory in which the described automobile will chiefly be used
The previous registered owner of the vehicle
2.Statutory conditions found in all policies of “fire” insurance:
• State the rights of third parties
• Are required by law
• Outline the rules of conduct between the Insured and the Insurer
• Specify the coverage’s provided
Outline the rules of conduct between the Insured and the Insurer
3.In a contact of Insurance, “consideration” means:
• Not essential to a binding contract
• The amount the broker collects when a quote is completed
• The reviewing of the details of the risk to be insured by an underwriter
• A sum of money or another thing of value being paid for the article or contract
A sum of money or another thing of value being paid for the article or contract
4.Under a policy of insurance, a “deductible” is generally:
• Payable by the Insured only if he is responsible for the loss
• Payable by the Insured only where the Insurer disputes the amount of its liability for the loss
• Payable by the Insured in all situations where the insured peril has an applicable deductible
• The responsibility of the broker
• Payable by the Insured in all situations where the insured peril has an applicable deductible
5.Supplementary Payments: Additional expenses incurred by insurers and insureds in investigating, settling and defending a claim are provided under a separate Insuring Agreement entitled Supplementary Payments. The costs insured by this Agreement include;
• Costs of defense; reasonable expenses incurred by the insured at the insurer’s request to assist in the investigation and defence of the claim; court costs assessed against the insured; interest from the date the judgment was rendered but only on the amount which is within the insurers limit of liability
• Cost of defense, reasonable expenses to assist in investigation at the insurers request, and required to assist in the investigation and defense of the claim
• Cost of defense, reasonable expenses incurred to assist in the investigation at the insurers request, interest from the date of the judgement rendered only on the limit that exceeds the applicable liability limit in the province
• All of the above
All of the above
Insurable Interest” means:
• The interest payable on a loan
• The financial interest a person has in something of value
• The personal interest a person has in something he expects to inherit
• The financial interest a person will have in something of value
The financial interest a person has in something of value
7.Section E of any Habitational policy protects against claims of BI or PD arising from:
• Personal acts of the Insured, carelessness of Insured’s children and default in payment of debts
• Personal acts of the Insured, poor up-keep of Insured’s dwelling and ice on the steps of the Insured’s business premises
• Personal acts of the Insured, carelessness of Insured’s children and ownership of certain boats
• Personal acts of the Insured, ownership of certain boats and ownership of automobiles
Personal acts of the Insured, ownership of certain boats and ownership of automobiles
.Section E of any Habitational policy protects against claims of BI or PD arising from:
• Personal acts of the Insured, carelessness of Insured’s children and default in payment of debts
• Personal acts of the Insured, poor up-keep of Insured’s dwelling and ice on the steps of the Insured’s business premises
• Personal acts of the Insured, carelessness of Insured’s children and ownership of certain boats
• Personal acts of the Insured, ownership of certain boats and ownership of automobiles
• Personal acts of the Insured, ownership of certain boats and ownership of automobiles
8.Our Insured hires an independent contractor to perform renovations to her building. Our Insured will be deemed to be liable for the acts of an “independent” contractor in all of the following instances except one. Choose the exception.
• Where Insured supplies tools and materials from which damages arose
• Where Insured hires and fires persons doing the work
• Where Insured supplies “blue prints” and leaves contactor to his own resources to arrive at the desired results
• Where Insured provides on-site direction and supervision of work
Where Insured supplies “blue prints” and leaves contactor to his own resources to arrive at the desired results
9.Personal property on all Homeowners’ Forms is insured:
• Anywhere in North America excluding Mexico
• Only at the location described on the Coverage Summary page
• Anywhere in Canada, Mexico or the continental United States of America
• Anywhere
• Anywhere
10.Which of the following statements is true when a Standard Mortgage clause is attached to a policy?
• The Insurer may cancel the policy at any time by providing the mortgagee within fifteen days notice of cancellation by registered mail from Insurer’s office
• Neither the Insurer nor the Insured may cancel the policy until the mortgage has been paid off
• The mortgagee is not required to advise the Insurer of any material change in the risk known to him
• The Insurer could be called upon to pay a loss to the mortgagee, even though the Insured violated a policy condition
• The Insurer could be called upon to pay a loss to the mortgagee, even though the Insured violated a policy conditio
11.Every policy of “fire” insurance:
• Covers fire, explosion and lightning
• Is required by law to cover fire, windstorm and lightning
• Usually covers fire, faulty electrical wiring and specified types of explosion
• Is required by law to cover at least fire, lightning and specific types of explosion
Is required by law to cover at least fire, lightning and specific types of explosion
12.There are a number of General Provisions, Definitions and Exclusions that apply to the entire Automobile Insurance Policy. All of the following statements are true except one. Choose the exception.
• When the Insured purchases a new automobile to replace the insured automobile, coverage is automatically extended for a period of 14 days.
• Any persons who uses the automobile without the owners consent is entitled to Accident Benefits coverage only
• Coverage is restricted to Canada, the USA, and upon vessels plying between the ports of these countries
• The insured automobile is not permitted to be leased or rented to others without the specific consent of the Insurer
The insured automobile is not permitted to be leased or rented to others without the specific consent of the Insurer
13.A building worth $200,000 is insured for $125,000 and the policy contains an 80% Co-insurance Clause. A fire causes the building to be destroyed. The Insured will recover: • $97,662.50 • $78,125.00 • $100,000.00 • $125,000.00
• $125,000.00
14.When an Insured replaces an automobile designated in the policy, or adds another automobile to others which are all insured by the same Insurer, coverage is automatically provided for such Newly Acquired Automobile for a maximum of:
• 21 days from the date on the bill of sale
• 7 days from the date on the bill of sale
• 30 days from the date of sale at the dealership
• 14 days from the date of acquisition of newly acquired vehicle
14 days from the date of acquisition of newly acquired vehicle
15.The General Provisions, Definition and Exclusions contain in automobile policies do not permit the use of the insured automobile for certain purposes. All of the following are excluded uses under the policy, except one. Choose the exception.
• The lease or rental of the insured automobile
• The carrying of passengers for compensation or hire
• The carrying of explosives or radioactive materials
• The occasional carry of children for educational program
The occasional carry of children for educational program
16.Our insured has made application for Appraisal. The intent of the Appraisal process is to settle the dispute between our Insured and the Insurer regarding:
• The premium charged for coverages being provided by the Insurer
• Right of Insured to purchase salvage for an insured loss
• The amount of the settlement being offered
• Denial of insurance coverage under the policy
The amount of the settlement being offered
17.When you sell Comprehensive or “All Risk” coverage you should advise the Insured that the policy insures:
• All risks of direct physical loss or damage, subject to the policy conditions and exclusions
• All risks, except theft from the interior of an unlocked automobile
• All risks, except earthquake and radioactive contamination
• All risks
All risks of direct physical loss or damage, subject to the policy conditions and exclusions
18.Where an Insured’s access to his own dwelling is prohibited by Civil Authority, the Insurer will respond to pay Fair Rental Value and Additional Living Expenses under most Habitational Insurance Policies, provided that:
• Access is denied as a direct result to neighbouring premises by any peril
• Access to the insured property is prohibited by order of Civil Authority, and the peril causing the loss is insured by the insured’s own policy
• All additional expenses are recoverable under the contract as well as indemnifying the insured for all rental income that they cannot otherwise collect
• Coverage extends until the Civil Authority will allow residency
Access to the insured property is prohibited by order of Civil Authority, and the peril causing the loss is insured by the insured’s own policy
19.The occupier of property owes the greatest duty of care to: • Thief • Trespasser • Pizza Delivery person • Postal Worker
Pizza Delivery person
20.Liability policies insure bodily injury and property damage on an occurrence basis. This includes coverages for unexpected injury and damage which happens…
• Suddenly and unexpectedly only
• Suddenly and accidentally, over a long period of time or as a continuous and repeated exposure to substantially the same harmful condition
• Suddenly and over long periods of time
• Never covers anything over a long period of time
Suddenly and accidentally, over a long period of time or as a continuous and repeated exposure to substantially the same harmful condition
21.Uninsured Motorist Coverage is included in the Accident Benefits coverage by Automobile Insurance Policies. It provides limit coverage for Insured’s that are injured or killed by an Insured or unidentified automobile. All of the following conditions must be present if a claim for damages arising out of an unidentified automobile is to be successful, except one. Choose the exception.
- The Insured must show that the identity of either the owner or driver of such automobile cannot be ascertained
- It must be shown that the Insured was wholly and continuously disabled or a period of not less than 14 days
- The accident must have been reported to authorities within 24 hours
- It must be shown that the Insured was wholly and continuously disabled for a period of not less than 7 days
The Insured must show that the identity of either the owner or driver of such automobile cannot be ascertained
22.Automobile Insurance policies are subject to Statutory Conditions. One such Condition deals with the duties and responsibilities of the Insured and Insurer where there is a loss or damage to the insured automobile. All of the following statements with respect to this Condition are true except one. Choose the exception.
• The amount of the settlement offered by the Insurer is final and is not subject to negotiation
• The Insured is entitled to effect only such repairs as are immediately necessary for the protection of the automobile
• The settlement of all losses is determined on the basis of ACV
• The Insurer agrees to pay such expenses as are necessary to protect the automobile from further loss or damage
The amount of the settlement offered by the Insurer is final and is not subject to negotiation
23.Automobile Insurance policies are subject to Statutory Conditions. One such condition deals with the duties and responsibilities of the Insured and Insurer when there is a loss or damage to the Insured automobile. All of the following statements in respect to this Condition are true except one. Choose the exception.
• When payment is made under the policy, the salvage, if any, is the property of the Insurer
• When payment is made under the policy, the salvage, if any, is property of the Insured
• The insurer agrees to pay such expenses as are necessary to protect the automobile from further loss or damage
• The settlement of all losses is determined on the basis of ACV
When payment is made under the policy, the salvage, if any, is property of the Insured
24.The Statutory Conditions provide that the Insured may terminate the contract:
• By failing to exercise the right of renewal within 5 days of the anniversary date of the policy
• By calling the broker and telling them that you want to cancel
• By destroying the policy
• At any time on request
• At any time on request
25.Under the Basic Residential Policy Form, which of the following losses is covered?
• Water hammer
• Back up of sewer
• Smoke due to faulty operation of the basement furnace
• Damage to the garage door caused by vehicle driven by Insured
• Smoke due to faulty operation of the basement furnace
27.Insurance deals with many types of risks; they fall into different categories: personal, property, liability. Insurance is a solution to the handling of these risks. Choose the best way to describe insurance as a way to deal with risk.
• The chance of loss for no financial gain is eliminated
• Retention of risk
• Give a portion of all of their risk away
• Reduce the frequency and severity of losses by controlling the risk
Reduce the frequency and severity of losses by controlling the risk
28.”Subrogation” means:
• That the Insured has the option of receiving payment for the loss from either the Insurer or the person responsible
• The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss
• The amount the insurance company receives from a person who is legally responsible for a loss
• Stepping into another’s shoes
The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss
29.To “bind a risk” means:
• Finding a company willing to give a quote on a risk
• Automatically renewing an existing policy
• Having authority from an Insurer to write up an application
• Having authority from an Insurer to put insurance in force
Having authority from an Insurer to put insurance in force
30.Financial responsibility laws in each province require automobile owners to establish their financial ability to pay losses up to a certain dollar limit. The minimum legislated limits of third party liability coverage required to be carried in all provinces (except Quebec) is: • $200,000 • $180,000 B.I. and $20,000 P.D. • $50,000 • $190,000 B.I. and $10,000 P.D.
32.All of the following are “Insured’s” under most Habitational Insurance policies except one. Choose the exception.
• Insured’s common law spouse who moved in four months ago
• Insured’s twins, age 22, who are living at Insured’s home while attending university
• Insured’s grandmother who lives with them
• 16-year-old foster child left in the care of the Insureds
33.Loss caused by “freezing” during the usual heating season is covered on Habitational Insurance policies only if the Insured fulfills the obligations outlined in the policy. If the Insured is away for more than four consecutive days, they must:
• Ensure all windows and doors are securely locked and heating is maintained
• Arrange for a competent person to enter the dwelling daily to ensure heating is being maintained or shut water supply off and drain all pipes and appliances
• Advise the Insurer that the dwelling will be unoccupied and take whatever steps you deem relevant so that freezing will not occur
• Obtain written permission from the Insurer for continuation of coverage during period of unoccupancy
34.There are a number of advantages to an Insured in choosing to insure under a Homeowner’s Policy. One feature common to all Homeowner’s Forms is:
• Personal property is insured on a Replacement Cost Basis
• Special Limits of Liability do not apply to jewellery, watches, gems, furs and fur garments in respect to theft
• Personal liability coverages automatically included
• Personal property automatically insured for 50% of value of dwelling building
35.Liability policies are concerned with matters of civil liability, Civil Law addresses the following area(s): • Contractual Liability • Legal Liability • Criminal Law • Legal and Contractual Liability
36.An “Occurrence Basis” Liability Policy is “broader” than a Liability Policy issued on an “Accident Basis.” An Occurrence Basis Policy:
• Provides coverage for damage caused by continuous and repeated exposure to substantially the same harmful conditions
• Provides coverage for bodily injury and property damage caused intentionally
• Provides coverage only for a sudden and unusual event
• Provides excess insurance over other existing liability policies
37.Physical damage coverage for automobiles rented in the name of an individual can be added to the Insured’s Automobile Insurance policy by the SEF 27 Legal Liability for Non-Owned Automobiles Endorsement. All of the following coverage provisions apply to this endorsement except one. Choose the exception.
• No more than one such automobile may be in the Insured’s or their spouse’s care, custody, or control at any one time
• Coverage is subject to a maximum of $50,000 in any one occurrence
• Coverage is for the same perils as the Insured under the Insured’s Automobile Insurance policy
• Coverage is restricted to certain types of automobiles
Coverage is subject to a maximum of $50,000 in any one occurrence
38.Which of the following statements is correct in connection with the 80% Co-insurance Clause?
• It restricts the insurance payable to less than 80% of the actual cash value of the property
• The Insured can collect only 80% of any loss
• If the amount of insurance is less than 80% of the value of the property, payment may be less than the actual loss
• The amount of insurance carried must, by law, be not less than 80% of the value of the property
f the amount of insurance is less than 80% of the value of the property, payment may be less than the actual loss
39.All of the following statements regarding the SEF 44 Family Protection Endorsement are true except one. Choose the exception.
• Provides Insureds with additional coverage in the event they are injured or killed by an uninsured or under- insured driver
• The limit of coverage provided is in addition to the limit of third party liability insurance carried by the at- fault driver
• The limit of coverage provided is the difference between the limit of third party liability insurance carried by the at-fault driver and that provided by the Insured’s own policy
• Persons entitled to coverage include Insureds and their dependent relatives
The limit of coverage provided is in addition to the limit of third party liability insurance carried by the at- fault driver
40.An owner of a condominium unit has a Condominium Unit Owner’s Policy. This policy provides protection for:
• Additional Living Expense based on the amount of personal property insured
• Improvements and betterments done by the owner to his/her own unit
• Special assessments necessitated relating to shortfalls of being underinsured in a building loss
• All of the above
41.If the Insured knowingly fails to reveal all material information when applying for insurance, the Insurer:
• Must continue the policy until expiry, but may not renew it
• May sue the Insured for misrepresentation
• Must pay all claims of the Insured
• May void the policy with respect to the property effected
42.The term of Fire Policy provides that the Insurer:
• Is liable for increased cost of repair where contributed to by a by-law regulation reconstruction
• Is liable only for such costs incurred after a loss for the tearing down and removal of debris of any structure, which does not conform to existing by-laws regulating building reconstruction
• Is not liable for any increased costs of repair due to the enforcement of any by-law regulating reconstruction
• Is only liable for 80% of increased costs of repair where contributed to by a by-law regulation reconstruction
43.The Additional Living Expenses Coverage as provided under Habitational Insurance Policies would pay:
• Those increased costs only, if any, for temporary accommodations occupied by the Insured after an insured loss
• All mortgage payments which Insured must continue to make after an insured loss
• Those increased costs for items such as food, transportation and accommodations which are incurred by the Insured after an insured loss, so long as such costs do not serve to increase the Insured’s standard of living
• All costs as incurred by the Insured for food, transportation and accommodations occupied by the Insured after an insured loss
Those increased costs for items such as food, transportation and accommodations which are incurred by the Insured after an insured loss, so long as such costs do not serve to increase the Insured’s standard of living
44.Our Insured recently purchased a Homeowners Comprehensive Form which she was told covered her property for “All Risks” of physical loss or damage. Last week, her home was burglarized and $30,000 in jewelry stolen. Insurer would pay:
• $5,000
• Whatever the specific limit for jewelry that the insurers policy contains
• 50% immediately and the remaining 50% upon replacement of the jewellery
• $30,000
Whatever the specific limit for jewelry that the insurers policy contains
45.There are a number of established “legal precedents” that will affect our client’s legal liability for damages. Generally, our Insured will be liable for damages caused in all of the following instances except one. Choose the exception.
• Escape of dangerous things(s)
• Acts of his children over 10 years of age
• Domestic animals
• Acts of an employee acting within the scope of his employment
Acts of his children over 10 years of age
46.The Voluntary Property Damage section of a Homeowner’s Liability or Comprehensive Personal Liability Policy excludes damage caused intentionally by an Insured over the age of:
• 18 years
• Majority, as determined by the province in which the Insured resides
• 12 years
• 21 years
12 years
.“Indemnity” means:
• Restoring the Insured to the same financial position as he was in at the inception date of the policy
• Umberrima Fides
• Restoring the Insured to the same financial position as he was immediately prior to the loss
• Pay the Insured the face amount of the policy
Restoring the Insured to the same financial position as he was immediately prior to the loss
With respect to federally licensed insurance companies, the Federal Department of Insurance:
• Controls the types of policies issued
• Only supervises life insurance companies
• Stipulates the types of agents who may represent the company
• Regulates the financial stability of Insurers
Regulates the financial stability of Insurers
49.If your client does not advise the Insurer of his previous losses when required to do so, he has violated an essential principle of insurance contacts. The principal is: • Legality of object • Insurable interest • Indemnity • Uberrima Fides
Uberrima Fides
50.Under an application for Automobile Insurance:
• All drivers who will be using the described automobile must sign the application
• Only the applicant needs to sign the application
• No signature is required on the application
• The applicant’s signature is required only when insuring leased automobiles
Only the applicant needs to sign the application
51.The SEF 20 Loss of Use Endorsement contains all of the following provisions except one. Choose the exception.
• Provides coverage only when the entire automobile has been stolen
• The time in which coverage starts varies which the cause of loss
• Covers expenses incurred for taxicabs or public means of transportation
• Coverage provided are subject to a daily and occurrence limit
Provides coverage only when the entire automobile has been stolen
52.Your clients have advised you they will be vacationing in Florida later this month. They have indicated they will be renting a car for two or three weeks while on vacation. All of the coverages provided by their own Automobile Insurance Policy will automatically extend to the rental car, except one. Choose the exception.
• The Insured’s legal liability for damage to the rented automobile
• The Insured’s legal liability for bodily injury to a pedestrian who is run over at a crosswalk
• The Insured’s claim for reimbursement of hospital and ambulance charges incurred as a result of an automobile accident
• The Insured’s legal liability for property damage caused to a motel building when the car rolled down an incline
The Insured’s legal liability for damage to the rented automobile
53.The Accident Benefits Coverage provided by the Insured’s automobile policy is available to all of the following persons except one. Choose the exception.
• A neighbour who is injured while removing boxes from the Insured’s trunk
• A pedestrian who is hit at an intersection by the Insured’s car
• The Insured’s 14 year old daughter
• Insured’s boarder who in injured while riding in a friend’s car
Insured’s boarder who in injured while riding in a friend’s car
54.Under a policy of “fire” insurance, which of the following losses is covered?
• Loss caused by enemy attack by armed forces
• Radioactive contamination
• Fire damage caused by a fire which followed a short circuit
• Loss to property caused by a process involving the application of heat
Radioactive contamination
55.Under a policy of “fire” insurance, the Insurer must make payment for loss within:
• 1 year from the date the loss occurred
• 90 days after completion of the Proof of Loss
• 60 days after completion of the Proof of Loss unless the contact provides for a shorter period
• 60 days after completion of Proof of Loss
60 days after completion of the Proof of Loss unless the contact provides for a shorter period
