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C12 Property Insurance > Multiple Choice > Flashcards

Multiple Choice Flashcards

1
Q

A homeowner losing the ability to continue to rent his or her basement suite after a fire is an example of a(n)
a. Incident loss
b. Direct loss
c. Indirect loss
d. Liability

A

c. Indirect loss

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2
Q

Identify the doctrine that stipulates that, if a loss to property is attributable to more than one cause occurring simultaneously, any one of which is covered by insurance policy, the loss is payable under the policy
a. Concurrent causation
b. Proximate cause
c. Remote cause
d. Fortuitous

A

a. Concurrent causation

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3
Q

In property insurance, what is a deductible?
a. The portion that the insurer pays for a covered loss
b. It is the amount the insurer will pay in the event of a loss
c. It is an amount the insured must pay on a claim before the insurance company will cover the rest of the claim
d. The amount that is applied only once during the renewal term in the event of a loss even though there are several losses.

A

c. It is an amount the insured must pay on a claim before the insurance company will cover the rest of the claim

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4
Q

In the basic fire policy, for how many days does the removal of insured property extension apply to remove property from an insured location to prevent further damage?
a. 7 days or until the policy expires
b. 8 days or until the policy expires
c. 15 days or until the policy expires
d. 30 days or until the policy expires

A

a. 7 days or until the policy expires

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5
Q

What is the main benefit of a mortgage clause for the mortgagee?
a. Entitles the bank to a larger share of the proceeds if there is a total loss
b. Prevents the insurer from terminating a policy mid-term
c. The policy will cover the mortgagee even if the insured has breached a condition of the policy
d. Entitles the bank to cancel the policy at any time and get a pro rata refund

A

c. The policy will cover the mortgagee even if the insured has breached a condition of the policy

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6
Q

What is the objective of indemnity
a. Allow the insured to benefit from the claim
b. Provide the full replacement cost at the time of the loss
c. Return the insured as nearly as possible to the financial position he or she was in prior to the loss; no more, no less
d. Allow the insured to obtain a larger settlement with his or her loss

A

c. Return the insured as nearly as possible to the financial position he or she was in prior to the loss; no more, no less

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7
Q

What must the insured have in the subject matter before they can be indemnified for a loss?
a. Utmost good faith
b. Insurable interest
c. Indemnity
d. Agreement

A

b. Insurable interest

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8
Q

Which of the following descriptions is correct as it relates to the statutory conditions in the common law provinces
a. They apply to oral and written fire insurance contracts
b. They apply whether included with the fire policy or not
c. The conditions apply to only accident and sickness policies
d. The conditions must be identified and printed in every fire insurance policy

A

d. The conditions must be identified and printed in every fire insurance policy

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9
Q

Which of the following policy provisions is used to restrict coverages specifically regarding the use, condition, or maintenance of the insured property?
a. Warranties
b. Endorsements
c. Coinsurance clauses
d. Actual cash values

A

a. Warranties

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10
Q

Which statement is true about replacement insurance?
a. It is the current market price
b. It is not provided in any personal-lines policy
c. The amount to be paid is the replacement cost less depreciation
d. Replacement insurance is determined by the purchase price of the insured item

A

a. It is the current market price

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11
Q
  1. Which system of law originated in England by judges based on court decisions; also known as case law?
    a. Statue law
    b. Common law
    c. Judgement law
    d. Civil code of Quebec
A

b. Common law

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12
Q
  1. What is a legal decision that serves as a basis to resolve subsequent disputes in similar cases?
    a. Case law
    b. Precedent
    c. Insurance law
    d. Civil code of Quebec
A

b. Precedent

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13
Q
  1. What are the two types of legal system in Canada?
    a. Private law and common law
    b. Administrative law and common law
    c. Common law and the civil code of Quebec
    d. Procedural law and the civil code of Quebec
A

c. Common law and the civil code of Quebec

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14
Q
  1. Which of the following reactions arises from the statutory condition that provides that the insured must promptly notify the insurer of any material change?
    a. A new feature is introduced that increases the chance of loss
    b. It results in damage to buildings/contents caused by alterations or additions
    c. It results in damage to goods caused by their undergoing a process involving the application of heat
    d. Due to a bylaw change, it provides for use of materials inferior to those that existed at the time the insurance policy was purchased
A

a. A new feature is introduced that increases the chance of loss

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15
Q
  1. What action must the insurer take when it opts to repair, rebuild, or replace damaged property rather than make payment in the form of a cash settlement?
    a. First provide the insured with the option of accepting or rejecting the proposed basis of settlement
    b. Provide the insured with written notice of its intention to do so within 30 days after receipt of proof of loss
    c. Seek the consent of the insured’s mortgagee
    d. Advise the insured’s broker or agent of its decision
A

b. Provide the insured with written notice of its intention to do so within 30 days after receipt of proof of loss

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16
Q
  1. When the insured termination or cancels a policy prior to the expiry date of his or her policy, the insurer will refund the unearned premium based on a
    a. Pro rata basis
    b. Short rate basis
    c. Full premium basis
    d. Minimum retained premium basis
A

b. Short rate basis

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17
Q
  1. Under statutory condition 3, change of interest, the insurer is obliged to insure a new interest replacing the named insured’s interest except
    a. When the owner sells the home to a relative
    b. By change in title due to succession
    c. By change in title due to the death of the named insured
    d. With authorized assignment under the bankruptcy and insolvency act
A

a. When the owner sells the home to a relative

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18
Q
  1. What does the acronym PIPEDA stand for?
    a. Personal information and electronic documents act
    b. Private information and electronic documents act
    c. Property information and electronic documents act
    d. Personal information and email document act
A

a. Personal information and electronic documents act

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19
Q
  1. The freedom of information and protection of privacy act (FOIPPA) applies to which jurisdiction?
    a. Quebec
    b. Nunavut
    c. Yukon
    d. Saskatchewan
A

d. Saskatchewan

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20
Q
  1. Which of the following statements is correct as it relates to the personal information protection act (PIPA)?
    a. It applies to Quebec
    b. It applies to Yukon, the northwest territories and Nunavut
    c. It governs private-sector organizations in the course of commercial business activities
    d. It regulates public bodies such as provincial government departments, municipalities, universities, school boards and crown corporations
A

c. It governs private-sector organizations in the course of commercial business activities

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21
Q
  1. What would be considered a fortuitous loss?
    a. An appliance that breaks down due to age
    b. A loss that is caused intentionally by the insured
    c. A loss that the insured will benefit from
    d. Hail Damage to a roof
A

d. Hail Damage to a roof

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22
Q
  1. What type of policy form is defined by its exclusions?
    a. Endorsement
    b. Named perils
    c. All risks
    d. Specified perils
A

c. All risks

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23
Q
  1. In all-risks coverage, the onus is on the insurer to prove that
    a. An exclusion applies
    b. Loss or damage to insured property at an insured location occurred during the policy term
    c. An exclusion does not apply
    d. The loss was fortuitous
A

a. An exclusion applies

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24
Q
  1. By provincial statute, a fire policy may only EXCLUDE fire if it results from which of the following?
    a. Fire at a neighbouring residence
    b. Fire that started in an automobile in the driveway
    c. Property undergoing a heat process
    d. Pot of grease being forgotten on the stove
A

c. Property undergoing a heat process

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25
Q
  1. In the IBC name-perils forms, which of the following losses would be covered under the water damage section of the insured’s property policy?
    a. Freezing
    b. Sewer backup after a severe rainstorm
    c. Rain that enters through an open window
    d. A sudden and accidental escape of water from a domestic water container located outside the dwelling
A

d. A sudden and accidental escape of water from a domestic water container located outside the dwelling

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26
Q
  1. Glass breakage is automatically included as a named peril in which one of the following forms.
    a. IBC 1161 Tenants Basic form
    b. IBC 1173 Seasonal residence form
    c. IBC 1151 Homeowners Basic form
    d. IBC 1165 Condominium Unit Owners Basic Form
A

c. IBC 1151 Homeowners Basic form

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27
Q
  1. For which of the following non-standard perils can an endorsement be purchased?
    a. Collapse
    b. Ice damming
    c. Seepage
    d. Mould
A

b. Ice damming

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28
Q
  1. Which of the following is a correct example of a flood?
    a. A dishwasher hose breaks, causing water to accumulate in the basement
    b. A hurricane causes a coastal storm surge, with the resultant flood waters inundating roads and sewers, and causing water to flow into the dwelling (and the sewers in the basement to back up).
    c. A pipe in the dwelling bursts, causing water to accumulate in the basement
    d. A toilet overflows, causing water to accumulate in the basement
A

b. A hurricane causes a coastal storm surge, with the resultant flood waters inundating roads and sewers, and causing water to flow into the dwelling (and the sewers in the basement to back up).

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29
Q
  1. What does the Acronym COPE stand for?
    a. Construction, occupancy, protection, Exposure
    b. Construction, occupation, protection, Elements
    c. Construction, occupation protection, Exposure
    d. Construction, occupancy, protection, Elements
A

a. Construction, occupancy, protection, Exposure

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30
Q
  1. What are two perils that remain excluded even when permission for vacancy is granted?
    a. Water damage and glass breakage
    b. Vandalism and explosion
    c. Malicious acts and water damage
    d. Riot and vandalism
A

c. Malicious acts and water damage

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31
Q
  1. What is the purpose of the declarations or coverages summary?
    a. Is only used with personal property policies
    b. Is of limited value with subscription policies
    c. States the coverage and limits agreed by the insurer
    d. States the coverage and limits agreed by the insured and the insurer
A

d. States the coverage and limits agreed by the insured and the insurer

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32
Q
  1. What are multi-peril policies covering various classes of business also known as?
    a. Homeowner’s comprehensive policies
    b. All risks form
    c. Named peril forms
    d. Package policies
A

d. Package policies

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33
Q
  1. What is a main benefit of having a single limit policy?
    a. One limit of insurance is applied on a blanket basis for all insurance coverages
    b. Perils insured are broader
    c. No deductible applies
    d. It only applies to commercial property policies
A

a. One limit of insurance is applied on a blanket basis for all insurance coverages

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34
Q
  1. When may a subscription policy be used?
    a. When the limits on property are low
    b. When the limits on property are very high
    c. The property risk is well protected by fire hydrants
    d. The property risk is loss free
A

b. When the limits on property are very high

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35
Q
  1. Which of the following clauses potentially limits an insurer’s liability?
    a. Deductible clause
    b. Breach of conditions clause
    c. Replacement cost clause
    d. Debris removal clause
A

a. Deductible clause

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36
Q
  1. Why is there a need for co-insurance?
    a. Enables an insurer to spread risk
    b. Provides all-risks coverage automatically
    c. Encourages insureds to carry adequate limits of insurance since most losses are partial
    d. Insured will pay less premium
A

c. Encourages insureds to carry adequate limits of insurance since most losses are partial

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37
Q
  1. What is the key benefit of the IBC standard mortgage clause to a mortgagee?
    a. No exclusions apply to coverage applicable to mortgagee
    b. The mortgagee will always receive the full amount of the mortgage
    c. A separate contract is created between the mortgagee and the insurer; this provides the mortgagee with greater protection
    d. Coverage applicable to the mortgagee will be on an ACV basis
A

c. A separate contract is created between the mortgagee and the insurer; this provides the mortgagee with greater protection

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38
Q
  1. Which of the following is part of a broker or agent’s main role?
    a. Accept or reject the application
    b. Assess the risk and determine what coverage the insured will require
    c. Determine whether an endorsement or further coverage is required
    d. Determine whether to pay the loss that has been reported or to deny it
A

b. Assess the risk and determine what coverage the insured will require

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39
Q
  1. In reading a policy, it’s particularly important to distinguish between these two words
    a. And, or
    b. Simply, merely
    c. Understand, comprehend
    d. Cost, fee
A

a. And, or

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40
Q
  1. What does contra proferentem mean when a policy wording has been drafted by the insurer?
    a. Any ambiguity in the policy wording will be interpreted against the insurer
    b. Any ambiguity in the policy wording will be interpreted against the insured
    c. No claims will be paid
    d. An insured right to claim would be limited by statute
A

a. Any ambiguity in the policy wording will be interpreted against the insurer

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41
Q
  1. Which of the following terms applies to a building with no people in it but to which people intend to return?
    a. Occupancy
    b. Absence
    c. Vacancy
    d. Unoccupancy
A

d. Unoccupancy

42
Q
  1. Which of the following persons would be included in the definition of an insured?
    a. Insured’s mother, who is visiting from out of town
    b. Insured’s father, who lives with the insured
    c. An unrelated boarder who lives in the insured’s dwelling
    d. Insured’s boyfriend, with whom she has had a relationship for two months
A

b. Insured’s father, who lives with the insured

43
Q
  1. Most often, the policy language comes from the insurer and so will be interpreted in favour of the insured if terms are unclear or their meaning is uncertain. What is this legal doctrine called?
    a. Uberrimae fidei
    b. Contra Proferentem
    c. Ab initio
    d. Caveat emptor
A

b. Contra Proferentem

44
Q
  1. Outdoor trees, plants and shrubs are optional coverages under which of the following types of policies?
    a. Basic
    b. Broad
    c. Comprehensive
    d. Basic, board and comprehensive
A

d. Basic, board and comprehensive

45
Q
  1. When does the lock replacement coverage apply?
    a. When locks are damaged
    b. If locks are replaced after a theft loss
    c. Pays for lock replacement if keys are stolen
    d. Only if the lock replacement claim is below $100.00
A

c. Pays for lock replacement if keys are stolen

46
Q
  1. Extension of credit or debit cards, forgery and counterfeit money offers some protection against such loss, subject to which of the following limitations?
    a. The coverage applies to cards issued to or registered in the name of the insured or the insured’s spouse.
    b. The insured must have complied with all the conditions of the card agreement
    c. There is coverage if the card is used by a household member, or any person entrusted with the card
    d. There is coverage for the insured’s liability arising from cards issued to the insured employer or to the insureds business, unless they are in the insureds name and the insured is personally responsible for all indebtedness under such card
A

b. The insured must have complied with all the conditions of the card agreement

47
Q
  1. For which of the following losses is the insured required to provide notice to authorities?
    a. All losses
    b. Fire losses
    c. Losses caused by a malicious act
    d. All losses that are made under the comprehensive homeowner’s form
A

c. Losses caused by a malicious act

48
Q
  1. For personal property losses, which of the following is an alternative basis of settlement specified by the homeowner’s forms?
    a. The insurer will pay the cost of reproduction of electronic media from duplicates or from originals of the previous generation of the media
    b. The insurer will settle a loss of fine art and paintings at replacement cost
    c. The insurer will settle a loss of memorabilia at replacement cost
    d. For electronic media the insurer will pay for the cost of gathering or assembling information or data for reproduction
A

a. The insurer will pay the cost of reproduction of electronic media from duplicates or from originals of the previous generation of the media

49
Q
  1. Which of the following provisions transfers the insured’s right of recovery against others to the insurer and entitles the insurer to sue in the insureds name when the insurer has made payment or assumed liability?
    a. Indemnity
    b. Duty after loss
    c. Reinstatement
    d. Subrogation
A

d. Subrogation

50
Q
  1. Which clause requires the insured to submit to examination under oath, produce relevant documents and allow the insurer to make copies of them?
    a. Indemnity
    b. Duty after loss
    c. Deductible
    d. Subrogation
A

b. Duty after loss

51
Q
  1. Exclusions remove the exposure to losses that are considered to be
    a. Insurable
    b. Fortuitous
    c. Uninsurable
    d. Named perils
A

c. Uninsurable

52
Q
  1. If property is excluded under a comprehensive form, it is likely excluded under the
    a. Basic form only
    b. Basic and broad forms
    c. Comprehensive form only
    d. Broad form only
A

b. Basic and broad forms

53
Q
  1. Who must prove if an exception applies to an exclusion when a loss has occurred?
    a. Insurer
    b. Broker
    c. Insured
    d. Courts
A

c. Insured

54
Q
  1. Under which of the following circumstances would property awfully seized by a government agency be covered?
    a. When it’s done to prevent vandalism
    b. When it’s done to prevent the spread of fire
    c. When it’s done to prevent a riot
    d. When it’s done because the insured stopped making payments on it
A

b. When it’s done to prevent the spread of fire

55
Q
  1. Which of the following losses would be covered under damage caused to sporting equipment?
    a. Skis damage when a ski jump isn’t landed properly
    b. A back catchers mask that is cracked by a baseball
    c. Worn out basketball shoes
    d. Hockey equipment stolen from the locker room
A

d. Hockey equipment stolen from the locker room

56
Q
  1. There are three instances where loss or damage caused by marring, scratching, abrasion, or chipping are still covered as they are exceptions to the exclusions. Which of the following is NOT an exception?
    a. An accident to a land vehicle, watercraft, or aircraft
    b. A specified peril
    c. A theft or attempted theft
    d. An accidental dropping of the item
A

d. An accidental dropping of the item

57
Q
  1. A contractor incorrectly installs a subfloor before installing new tiles throughout the main floor of a home. The error isn’t discovered until the tile flooring is complete and as a result, additional costs will now be incurred to rip up and replace both the subflooring and tile. Which exclusion would an insurer rely on to deny a claim for these additional costs?
    a. Intentional or criminal acts
    b. Property being worked on
    c. Fault design, material, or workmanship
    d. Trickery or fraud
A

c. Fault design, material, or workmanship

58
Q
  1. What kind of water damage loss is covered by a comprehensive homeowners form?
    a. Shoreline ice buildup
    b. Damage to a watermain
    c. Ground water
    d. Escape of water from a swimming pool
A

d. Escape of water from a swimming pool

59
Q
  1. In the case study, if the loss had occurred while the home was still undergoing renovations, would the Scalas have been covered for the loss?
    a. Yes, because loss or damage while under construction is not excluded
    b. No because water damage is excluded even with permission for the construction
    c. Yes, because the insured obtained permission for the construction from the insurer
    d. No because the loss was caused by one of the contractors
A

b. No because water damage is excluded even with permission for the construction

60
Q
  1. In the case study, if the Scalas had come home and found their basement full of water because of a sewer backup, would there still be coverage under the policy?
    a. No because sewer ack up is specifically excluded from the policy
    b. No because the insureds were away at the time of the loss and didn’t have anyone checking the premises
    c. Yes, because the base policy provides coverage for sewer back up losses
    d. No because sewer back up falls under the flood exclusion
A

a. No because sewer ack up is specifically excluded from the policy

61
Q
  1. What is an endorsement?
    a. A coverage to add for highly mobile contents such as jewellery
    b. An amendment added to a written document
    c. A contract to promote a product
    d. An exclusion
A

b. An amendment added to a written document

62
Q
  1. Which is the most appropriate concise definition of Contro Proferentem?
    a. Against the insurer
    b. Against the insured
    c. Against the additional named insured
    d. Against the lienholder
A

a. Against the insurer

63
Q
  1. Sewer systems are usually publicly owned and dispose of what kind of material?
    a. Recycled material
    b. Potable water
    c. Waste water
    d. Garbage disposal material
A

c. Waste water

64
Q
  1. The rates for an earthquake endorsement are based on all the following factors, EXCEPT
    a. Geographic locations
    b. Building design, construction, and age
    c. Occupancy
    d. Municipal by laws
A

d. Municipal by laws

65
Q
  1. The insurer will not pay for increased costs due to any law regulating the zoning, demolition, repair or construction of buildings and their related services. Which endorsement will address this limitation and extend coverage?
    a. Identity theft endorsement
    b. Vacancy permit
    c. Home-based business endorsement
    d. Bylaws endorsement
A

d. Bylaws endorsement

66
Q
  1. The purpose of a homeowners floater is to provide additional coverage for which type of items
    a. Commercial property
    b. Personal property on exhibit
    c. Movable and portable personal property
    d. Stationary personal property
A

c. Movable and portable personal property

67
Q

Which of the following is a list of items individually covered by a policy?
a. Schedule of insurance
b. Appraisal
c. General personal contents
d. Itemized list of personal contents

A

a. Schedule of insurance

68
Q
  1. Possessing software that has been illegally acquired is considered copyright infringement or piracy and is a violation of what federal act?
    a. Personal information protection and electronic documents act
    b. Access to information act
    c. Copyright act
    d. Canadian anti-privacy act
A

c. Copyright act

69
Q
  1. Which of the following reports show the value, mechanical condition, safety, and evidence of any physical damage of a watercraft?
    a. Watercraft report
    b. Boat survey
    c. Marine survey
    d. Pleasure craft report
A

c. Marine survey

70
Q
  1. Which of the following would be covered by coverage C of the homeowners forms?
    a. Aircraft
    b. Camper units
    c. Canoe
    d. Motorized vehicle
A

c. Canoe

71
Q
  1. A home is considered high-valued if it has minimum replacement value of
    a. 5 million
    b. 3 million
    c. 1 million
    d. 500,000
A

c. 1 million

72
Q

What materials are traditionally used as a foundation for a mobile home?
a. Chassis and tires only
b. Concrete blocks
c. Settled ground
d. Tie-downs

A

b. Concrete blocks

73
Q

Up to how many acres are acceptable to be covered on a hobby farm?
a. 15 acres
b. 25 acres
c. 45 acres
d. 50 acres

A

b. 25 acres

74
Q

A home that is visited throughout various times of the year, for weekends and vacations, qualifies for what type of policy form?
a. Homeowners form
b. Residential form
c. Secondary home form
d. Seasonal residence form

A

d. Seasonal residence form

75
Q

In British Columbia, what is the governing body of a condominium multi-unit building made up of single unit owners known as?
a. Condominium corporation
b. Strata unit board
c. Condominium owners bureau
d. Strata corporation

A

d. Strata corporation

76
Q

Through which of the following provisions does the condominium corporation assign responsibility between the unit owner and the corporation for loss or damage to a unit?
a. Condo owner rule
b. Common property bylaw
c. Standard unit bylaw
d. Bylaw ordinance

A

c. Standard unit bylaw

77
Q
  1. Condominium coverage requires special treatment due to the specific nature of the risk. Coverages U1 and U2 are written into the wordings to address the nature of the risk. What does Coverage U1 address?
    a. Standard unit bylaw
    b. Condominium common areas
    c. Loss assessment
    d. Improvements and betterments
A

d. Improvements and betterments

78
Q
  1. Tenants would be responsible for which of the following properties?
    a. Dwelling structure they live in as a principal residence
    b. Outdoor shrubs, lawn, and trees at the premises where they live
    c. Tenants’ own personal property at the premises where they live
    d. Landlord’s appliances in the unit that the tenant rents
A

c. Tenants’ own personal property at the premises where they live

79
Q

The frequency with which tenants move can generate additional work for the insurer that is time consuming and costly. This is considered to be a concern for whom?
a. Tenants
b. Landlord
c. Underwriter
d. Advisors

A

c. Underwriter

80
Q

The tenants basic form covers personal property stored in a warehouse ONLY against theft. How many days does the comprehensive form also cover loss to such property caused by any other peril?
a. 10 days
b. 30 days
c. 45 days
d. 60 days

A

b. 30 days

81
Q
  1. What does “all risks” refer to?
    a. Named perils including theft and water damage are covered.
    b. All perils are covered.
    c. All physical loss or damage except as excluded is covered.
    d. Only the perils named in the policy are covered.
A

c. All physical loss or damage except as excluded is covered.

82
Q

What are the common coverages listed on the named-perils form?
a. All physical loss or damage except as excluded is covered.
b. There are no exclusions on the named-perils form.
c. The named-perils form only covers all risks of a physical nature.
d. The named-perils form covers fire and additional perils named on the form.

A

d. The named-perils form covers fire and additional perils named on the form.

83
Q

What is an example of property commonly excluded under a commercial property broad form?
a. Furs or jewellery
b. An occupied vacation residence
c. An occupied cottage
d. A separate building on the property

A

a. Furs or jewellery

84
Q

What exclusion would the client want to add back onto their policy if they were concerned about their building and its age?
a. Pollution
b. Bylaws
c. War
d. Terrorism

A

b. Bylaws

85
Q
  1. Which province has the Act Respecting the Distribution of Financial Products and Services requiring brokers to review all exclusions with the client?
    a. Ontario
    b. Saskatchewan
    c. New Brunswick
    d. Quebec
A

d. Quebec

86
Q

Any client who has stock or is responsible for stock in transit has inventory shortage as a risk. Why does insurance generally not provide coverage for this risk?
a. There is no coverage available for stock in transit.
b. Inventory shortage is automatically covered under all commercial forms.
c. Documentary evidence is needed to prove that the stock was in the insured’s care, custody, and control at the time of the inventory shortage.
d. Inventory shortage requires reporting to the insurer on a weekly basis and is cost prohibitive for most insureds to consider purchasing.

A

c. Documentary evidence is needed to prove that the stock was in the insured’s care, custody, and control at the time of the inventory shortage.

87
Q

How do many insurers treat the temporary location extension in the commercial property broad form (CPBF)?
a. Insurers include this extension at little or no premium charge.
b. Insurers include this extension at a high premium charge.
c. Insurers do not include this extension.
d. Insurers will not cover an overflow of stock or equipment that is stored off-site.

A

a. Insurers include this extension at little or no premium charge.

88
Q

What is the coinsurance clause meant to do?
a. Ensure that the client will get paid on the claim
b. Protect equipment and stock that is at a temporary location only
c. Encourage the insured to carry adequate amounts of insurance on the property
d. Require the insured to report all stock values periodically during the policy term

A

c. Encourage the insured to carry adequate amounts of insurance on the property

89
Q

Under which of the following circumstances would a sales representative’s samples generally be EXCLUDED under the extension to the commercial property broad form (CPBF)?
a. When the samples are in transit to an unnamed location
b. When the samples are with the salesperson at a client’s location
c. While the samples are on the actual premises of the business they pertain to
d. When the samples are held in an unlocked vehicle

A

d. When the samples are held in an unlocked vehicle

90
Q

Other than the peak season endorsement, what is another way to protect fluctuating values?
a. Actual cash value
b. Stock reporting basis
c. Blanket limit
d. Temporary locations coverage

A

b. Stock reporting basis

91
Q
  1. What does the acronym COPE stand for?
    a. Calculation, occupancy, protection, and exposure
    b. Construction, occupancy, protection, and exposure
    c. Construction, occupancy, property, and exposure
    d. Construction, occupancy, protection, and environment
A

B. Construction, occupancy, protection, and exposure

92
Q
  1. Which guide describes the maximum amounts of exposure an insurance company is prepared to accept on various classes of risk?
    a. Rating guide
    b. Line guide
    c. Claims guide
    d. Underwriting guide
A

b. Line guide

93
Q

From an insurance perspective, the majority of large-loss hail events occur in which province?
a. Alberta
b. British Columbia
c. Quebec
d. Nova Scotia

A

a. Alberta

94
Q
  1. The underwriting process involves which three main steps?
    a. Evaluating the risk, making the underwriting decision, and pricing the risk
    b. Evaluating the risk, making the claims decision, and pricing the risk
    c. Interviewing the client, making the underwriting decision, and pricing the risk
    d. Running reports, making the underwriting decision, and pricing the risk
A

a. Evaluating the risk, making the underwriting decision, and pricing the risk

95
Q

Which of the following outcomes is a result of applying the modified rate for a particular risk to the amount of insurance for that risk?
a. Premium
b. Claims cost
c. Severity of loss
d. Deductible

A

a. Premium

96
Q
  1. In the common-law provinces and territories, a blank proof of loss form must be provided to an insured within how many days of the notice of loss?
    a. 10
    b. 20
    c. 30
    d. 60
A

d. 60

97
Q
  1. Which of the following is an example of a critical workplace skill that an adjuster would use?
    a. Being patient
    b. Being abrupt
    c. Being knowledgeable about commercial insurance
    d. Being knowledgeable about underwriting
A

a. Being patient

98
Q

Which of the following is part of the role of a broker or agent in the event of a claim?
a. Investigate the loss.
b. Explain the claims process to the insured, thereby reducing anxiety and setting realistic expectations.
c. Arrive at a settlement.
d. Recommend payment.

A

b. Explain the claims process to the insured, thereby reducing anxiety and setting realistic expectations.

99
Q
  1. Who is considered the third point of contact in the insurance transaction?
    a. Underwriter
    b. Broker
    c. Agent
    d. Claims adjuster
A

d. Claims adjuster

100
Q
  1. Who is responsible for explaining the claims process to the insured, with the goal of reducing anxiety and setting realistic expectations?
    a. Underwriter
    b. Broker or Agent
    c. Contractor
    d. Claims adjuster
A

b. Broker or Agent

C12 Property Insurance (3 decks)

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