Review Quiz 1 AND 2

Question 1

1. Which type of assignment can occur without the consent of the insurer?

a. Assignments when the insured decides they want to

b. Assignments under the Insurance Act

c. Assignments of assets to an executor or administrator of a will

d. Assignments when property is sold

Answer 1

c. Assignments of assets to an executor or administrator of a will

Question 2

4. How is personal liability coverage for cemetery plots provided to insured homeowners?

a. Coverage for personal liability related to cemetery plots can be added with an endorsement.

b. Coverage for personal liability related to cemetery plots is provided under Coverage-G.

c. Cemetery plots are typically included in the definition of premises under the personal liability section of homeowners policies.

d. Cemetery plots are not an insurable premise for liability coverage under homeowners
policies.

Answer 2

c. Cemetery plots are typically included in the definition of premises under the personal liability section of homeowners policies.

Question 3

5. Which type of cause is required for an insurer to pay a loss when that cause is an insured peril?
   a. The immediate cause of the loss
   b. The last link in the chain of causes
   c. The remote cause of the loss
   d. The proximate cause of the loss

Answer 3

d. The proximate cause of the loss

Question 4

6. Tenants legal liability insurance is used to pay for which type of damage?

a. Damage caused by the tenant to the premises they rent.

b. Damage caused by the tenant to the tenant’s own contents.

c. Damage caused by the landlord to the premises rented by the tenant.

d. Damage caused by the tenant to other units in the building.

Answer 4

a. Damage caused by the tenant to the premises they rent.

Question 5

7. Which statement describes the Additional Condition–Parts?

a. If a property consists of several parts, the insurer is only liable for the insured value of the
lost or damaged part(s).

b. If a property is made up of several parts, loss, or damage to any one or more parts will be
considered loss or damage to the entire property.

c. If a property consists of several parts, the insurer will pay a reasonable and fair percentage of
the value of the total set.

d. If a property consists of several parts, each part must be scheduled separately.

Answer 5

a. If a property consists of several parts, the insurer is only liable for the insured value of the
lost or damaged part(s).

Question 6

8. Which situation requires the addition of an OPCF 4 permissions endorsement to an automobile
   policy?

a. Insured is a professor of Geology and carries specialized rocks to and from his lab for study.

b. Insured is a car dealer and sometimes uses his own vehicle to transport customers.

c. Insured is an engineer and is required to carry a Geiger counter, which contains radioactive
material.

d. Insured is a real estate broker and sometimes carries passengers or clients to view home
listings.

Answer 6

c. Insured is an engineer and is required to carry a Geiger counter, which contains radioactive
material.

Question 7

9. The sharing of loss or liability between two or more insurance companies covering the same
   risk is the definition for which term?

a. Salvage

b. Subrogation

c. Contractual provisions

d. Contribution

Answer 7

d. Contribution

Question 8

10. While making dinner in his rental apartment, the insured causes a fire that damages his unit
    and two adjacent units. Which liability coverage would cover the damage to the other units?

a. Premises liability

b. Tenants legal liability

c. Personal liability

d. The building owner’s liability coverage

Answer 8

c. Personal liability

Question 9

2. Which party from the examples provided would be considered to have insurable interest?

a. A fur shop owner who has a fur coat in her care, custody, and control

b. A grandson who is going to inherit property sometime in the future

c. A potential buyer of an automobile

d. A member of a golf club

Answer 9

a. A fur shop owner who has a fur coat in her care, custody, and control

Question 9

3. Which type of assignment can occur without the consent of the insurer?

a. Assignments when the insured decides they want to

b. Assignments under the Insurance Act

c. Assignments of assets to an executor or administrator of a will

d. Assignments when property is sold

Answer 9

c. Assignments of assets to an executor or administrator of a will

Question 9

12. Which term describes when an insurer is deprived of subrogation rights by the insured who releases a third party from the obligation to pay?

a. Statutory Provision
b. Contribution
c. Contractual Provision
d. Prejudice

Answer 9

d. Prejudice

Question 9

Georgia is excluded from her parent’s policy as a driver. She decides to take the vehicle for a
drive and is involved in an accident. Would Georgia be entitled to accident benefits?

a. Maybe. Insurers are not obligated to pay some accident benefits when the insured is an
excluded driver.

b. Yes. Insurers are obligated to pay educational expenses even though she was an excluded
driver.

c. No. Insurers are not obligated to pay any accident benefits when the insured is an excluded
driver.

d. Yes. Insurers are obligated to pay non-earner benefits even though she was an excluded
driver.

Answer 9

c. No. Insurers are not obligated to pay any accident benefits when the insured is an excluded
driver.

Question 9

13. What is the standard maximum funeral benefit?

a. $5,000

b. $9,000

c. $6,000

d. $8,000

Answer 9

d. $8,000

Question 10

17. A letter published in a local newspaper was found to have defamed or injured a person’s
    reputation. What is the author of the letter guilty of?

a. Slander

b. Negligence

c. Libel

d. Nuisance

Answer 10

c. Libel

Question 11

18. Unlawfully taking another person’s property in his/her presence, by violence or the threat of
    violence, is the definition for which term?

a. Burglary
b. Theft
c. Fidelity
d. Robbery

Answer 11

d. Robbery

• remember based on severity
• theft > burglary (breaking in) > robbery (hold up)

Question 12

19. Priscilla, her stepson Bruce, and his friend Miles were in a car accident with an uninsured
    person. Brue and Miles are killed. Would Bruce and Miles be considered insureds under the
    Uninsured Motorist section of her policy?

a. Yes, both Miles and Bruce would be considered insured, despite the lack of blood
relationship to Priscilla.

b. Only Bruce would be considered a named insured.

c. Bruce might be considered a person insured, if he had been named on the policy, Miles
would not.

d. Neither Bruce nor Mikes would be considered a named insured as they are not dependent
relatives.

Answer 12

a. Yes, both Miles and Bruce would be considered insured, despite the lack of blood
relationship to Priscilla.

Question 13

21. After a privacy breach has occurred how can an organization prevent future breaches from
    occurring?

a. With better privacy policies
b. Contact the provincial ombudsperson or commissioner to find out how to prevent future
privacy breaches
c. Determine how it happened and take disciplinary action against those responsible
d. Determine how it happened and take steps to stop it from happening again

Answer 13

d. Determine how it happened and take steps to stop it from happening again

Question 14

22. What is the purpose of the OPCF 32—Use of Recreational Vehicle by Unlicensed Operators?

a. Ensures compliance with the statutory condition pertaining to qualification and age of the
vehicle operator when it is operated off public highways.

b. Waives compliance with the statutory condition pertaining to qualification and age of the
vehicle operator when it is operated on public highways.

c. Ensures compliance with the statutory condition pertaining to drivers who are not licensed
but borrow the recreational vehicle to drive on local roads.

d. Waives compliance with the statutory condition pertaining to qualification and age of the
vehicle operator when it is operated off public highways.

Answer 14

d. Waives compliance with the statutory condition pertaining to qualification and age of the
vehicle operator when it is operated off public highways.

Question 16

24. If a customer experiences bodily injury or property damage from the use of a product made by
    ABC Manufacturing which type of damages could the manufacturer be responsible to pay?

a. Punitive damages

b. Compensatory damages

c. Pecuniary damages

d. Direct damages

Answer 16

b. Compensatory damages

• special damages are specific

Question 16

25. Which policy would protect an insured against a loss caused by a dishonest employee?

a. Robbery policy

b. Fidelity policy

c. Theft policy

d. Burglary policy

Answer 16

b. Fidelity policy

• fidelity: faithfulness to a person, cause, or belief, demonstrated by continuing loyalty and support.

Question 17

26. Hunter becomes a paraplegic after an accident where he was not at-fault. A judge awards him
    $1,200,000 for his lifelong care. The at-fault driver carries the legal minimum of $200,000
    liability coverage. Hunter’s OAP 1 has liability up to $1,000,000 with OPCF 44R. How will Hunter
    collect what he is entitled to?

a. $200,000 from the third party’s policy; $800,000 from his own policy
b. $200,000 from the third party’s policy; $200,000 from his own policy; $800,000 from the
third party directly
c. $200,000 from the third party’s policy, $1,000,000 from the Unsatisfied Judgement Fund
d. $1,200,000 from the third party’s insurer

Answer 17

a. $200,000 from the third party’s policy; $800,000 from his own policy

• review this?
• first party, own party, remainder
• you can only claim up to 1m total
• limit of 44R = 1m, 44R will TOP UP

Question 17

36. Chris causes an accident and injures a third party while racing his automobile. How will Chris’s
    insurer respond to the third-party claim for $300,000?

a. His insurer will pay the full amount of the claim.

b. His insurer will NOT pay the claim.

c. His insurer will NOT pay however the uninsured motorist fund will cover the claim.

d. His insurer is required to pay up to the provincial minimum limits to the third party claim.

Answer 17

d. His insurer is required to pay up to the provincial minimum limits to the third party claim.

• absolute liability?

Question 17

35. What is the premium cost on a home valued at $750,000 when the insurer is using 25-cent
    rates?

a. $750 annually
b. $2,500 annually
c. $1,875 annually
d. $1,250 annually

Answer 17

d. $1,250 annually

• RATE MAKING: ‘‘amount of ins/100 x rate’’

Question 18

28. How would an OAP 2—Driver’s Automobile Policy assist someone who drives a government owned vehicle?

a. Provides increased liability coverage to the vehicle because governments carry only the
minimum compulsory limits

b. Provides extension of coverage to other government employees that might drive the vehicle

c. Provides physical damage coverage to the vehicle because governments are not required to
carry insurance

d. Provides liability coverage when driving a government vehicle because governments are not
required to carry insurance

Answer 18

d. Provides liability coverage when driving a government vehicle because governments are not
required to carry insurance

Question 19

30. The Spear family have an accident in California where their ‘unrepairable’ car is sold for
    salvage. Will there be any insurance coverage for the customs duties they are charged?

a. No, customs duties are the responsibility of the insured.

b. Yes, custom duty charges will need to be paid before
they return to the United States again.

c. No, the Spears are Canadian citizens and are not required to pay custom duty charges.

d. Yes, their insurance policy will respond to these custom duty charges under additional
benefits.

Answer 19

d. Yes, their insurance policy will respond to these custom duty charges under additional
benefits.

• salvage charges, duty charges

Question 19

31. How is the loss of food in a fridge or freezer addressed by a comprehensive homeowners
    policy?

a. The loss is NOT covered unless a personal property endorsement has been purchased.
b. The loss is covered if the fridge/freezer is on the insured premises and the loss was a result
of an accidental interruption of power or the freezer’s breakdown.
c. The loss is covered regardless of the fridge/freezer’s location and the loss was a result of any
interruption of power.
d. The loss is NOT covered as loss of food in a fridge or freezer is excluded.

Answer 19

b. The loss is covered if the fridge/freezer is on the insured premises and the loss was a result

Question 20

33. What differentiates speculative risk from pure risk?

a. The chance of loss

b. The presence of a hazard

c. The chance of profit

d. The presence of a peril

Answer 20

c. The chance of profit

Question 21

38. Which conditions must be met for a fire insurance policy to classify an incident as a fire?

a. Heating of something that is damaged in the heating process; the incident was intentional.

b. The fire department must be called to put out the fire.

c. There must be an actual fire; what is on fire is something that should not have been on fire;
the fire was accidental.

d. The fire department must classify the incident as a fire.

Answer 21

c. There must be an actual fire; what is on fire is something that should not have been on fire;
the fire was accidental.

Question 22

What is the provincial superintendent of insurance (or provincial equivalent) responsible for?

a. Licensing and supervision of insurance companies and solvency standards for insurers.

b. Licensing of motor vehicles, drivers, and traffic control of vehicles on highways.

c. Licensing of brokers and agents, and adjusters pursuant to the Provincial Insurance Act.

d. Licensing of brokers and agents, and adjusters pursuant to the Insurance Companies Act.

Answer 22

b. Licensing of motor vehicles, drivers, and traffic control of vehicles on highways.

Question 22

50. The common elements of a condominium building are insured by which of the following?

a. A Section of the Comprehensive homeowners Policy
b. Condominium unit owner insurance
c. The condominium corporation’s master policy
d. A subscription policy lead by the condominium corporation and signed by each unit owner

Answer 22

c. The condominium corporation’s master policy

Question 23

45. What is the main purpose of a co-insurance clause?

a. To allow an insurer, who has paid a claim, to recover some or all of the claim settlement from
those who are legally responsible for it

b. To ensure that when two or more insurers have a policy covering the same loss, the payment
for the loss is divided equitably among the insurers

c. To encourage insureds to carry adequate amounts of insurance on their property by requiring
them to bear a portion of every loss if underinsurance exists

d. To encourage insureds to carry adequate amounts of insurance for their liability claims

Answer 23

c. To encourage insureds to carry adequate amounts of insurance on their property by requiring
them to bear a portion of every loss if underinsurance exists

Question 23

47. With regards to contract law, a “meeting of the minds” is necessary to fulfill the element of

a. Agreement
b. Genuine intention
c. Consideration
d. Legal capacity

Answer 23

a. Agreement

Question 24

49. Which one (1) of the following items has a special limit of insurance if the item is stolen, but
    not if it is damaged or destroyed in a fire?

a. Garden tractors
b. Watercraft
c. Computer software
d. Jewellery

Answer 24

d. Jewellery

• easily stolen
• sample pg 5
• damaged for various reasons

Question 24

51. Which of the following describes how mobile home insurance is different from homeownerinsurance for a regular home?

a. Regular home insurance policies include liability coverage, but mobile home policies do not.

b. Regular home insurance policies include coverage for building and contents, but mobile home policies do not.

c. Regular home insurance policies include the peril of windstorm, but mobile home policies do not.

d. Regular home insurance policies do not consider contents, such as appliances as part of the structure, but mobile insurance policies can consider them part of the building.

Answer 24

d. Regular home insurance policies do not consider contents, such as appliances as part of the
structure, but mobile insurance policies can consider them part of the building.

Question 24

52. Many small to medium sized enterprises such as retail stores can purchase pre-set package
    policies that typically include which of the following coverages?

a. Contents, liability, errors and omissions and crime

b. Contents, liability, crime, and business interruption

c. Contents, liability, crime, fidelity

d. Contents, liability, boiler and machinery, fidelity

Answer 24

b. Contents, liability, crime, and business interruption

Question 25

What are the two main types of business interruption insurance?

a. Income Replacement Insurance and Extra Expense

b. The Earnings Approach and the Profits Approach

c. Gross Earnings coverage and the Profits Approach

d. Extra Expense and Business Restoration

Answer 25

b. The Earnings Approach and the Profits Approach

Question 25

54. Insurance to protect against the destructive effects of power that is accidentally released was
    traditionally known as Boiler and Machinery insurance and is now more commonly known as
    which of the following?

a. Electronic Data Processing Equipment insurance

b. Builders Risk insurance.

c. Business Interruption insurance

d. Equipment Breakdown insurance

Answer 25

d. Equipment Breakdown insurance

Question 26

A promise made by one party to guarantee the performance of a second party to a third party is known as which of the following?

a. Insurance

b. Surety Bond

c. Fiduciary

d. Obligee

Answer 26

b. Surety Bond

Question 27

55. When discussing Surety Bonds, who is the Principal?

a. The party who guarantees the performance

b. The party whose performance is guaranteed

c. The party who is owed the stated obligation

d. The person entrusted with the administration of something for the benefit of another

Answer 27

b. The party whose performance is guaranteed

• the persons in charge (2+)

Question 28

58. John is involved in a collision for which he is 50% at-fault. The total damage to his vehicle is $3000
    and he does not have collision coverage. How much would John receive from his insurance
    company?

a. $0

b. $750

c. $1500

d. $3000

Answer 28

c. $1500

• review?
• because he’s 50% at fault

Question 29

60. With Direct Compensation-Property Damage under the OAP 1, an insured whose vehicle sustains $3000 damage as a result of an accident in which the driver of the other vehicle was
    100% at fault will be indemnified by how much and from which insurer?

a. He will have to sue the other driver’s insurer for indemnification

b. $1,500 from his own insurer and $1,500 from the other driver’s insurer

c. $3000 by his own insurer

d. $3000 by the other driver’s insurer

Answer 29

c. $3000 by his own insurer

• review? why? look up DCPD

Question 30

61. Which endorsement allows a minor to operate a snowmobile off the highway?

a. OPFC 20

b. OPFC 28

c. OPFC 32

d. OPFC 35

Answer 30

c. OPFC 32

Question 31

62. Pina is involved in an automobile accident that causes $1000 damage to her automobile and
    she is deemed to be 25% at fault while the driver of the other vehicle (Paul) is deemed to be
    75% at fault. How will the indemnification for PINA be paid assuming no deductible applies?

a. Pina would be indemnified from her own policy; Section 7 – Loss or Damage Coverages for
$250 and from Section 6 – Direct Compensation Property Damage for $750.

b. Pina would be indemnified from Section 6 – Direct Compensation Property Damage for $250
and $750 from Paul’s insurer.

c. Pina would be indemnified $1000 from Section 6 – Direct Compensation Property Damage.

d. Pina would have to sue Paul and his insurer to pay for the damage to her vehicle.

Answer 31

a. Pina would be indemnified from her own policy; Section 7 – Loss or Damage Coverages for
$250 and from Section 6 – Direct Compensation Property Damage for $750.

Question 32

64. The Uninsured Motorist coverage is designed to provide indemnity for which one (1) of the
    following?

a. Property damage caused by a hit and run accident

b. Bodily injury caused by the negligence of an uninsured motorist

c. Bodily injury that meets verbal threshold

d. Property damage or bodily injury

Answer 32

b. Bodily injury caused by the negligence of an uninsured motorist

Question 32

63. In terms of automobile insurance, an insured is required to submit proof of loss within how
    many days of the loss?

a. 15 days

b. 30 days

c. 60 days

d. 90 days

Answer 32

d. 90 days

Question 32

66. What provision regarding automobile insurance allows an innocent third party to claim against the insured’s policy who is held legally liable for the loss even though the insured may be convicted of a crime and is penalized for it?

a. Absolute Liability

b. Statutory Condition

c. General Conditions

d. Priorities of Payment

Answer 32

a. Absolute Liability

• review absolute liability

Question 33

65. Which of the following best describes the Facility Association?

a. It is a provincial government insurance office that accepts applications from all automobile
owners who are having difficulty obtaining the automobile insurance that they need.

b. It is a pool of insurers who operate to provide a reinsurance device for accommodating
automobile policyholders who wish to have particularly high limits of insurance.

c. It is a for-profit organization that for a fee will facilitate the process of getting automobile
insurance for an individual that is having difficulty finding the favourable rates s/he is looking
for.

d. As an unincorporated non-profit association, it provides insurance for owners and operators
of motor vehicles who may otherwise have difficulty obtaining insurance in the open market
due to their driving history.

Answer 33

d. As an unincorporated non-profit association, it provides insurance for owners and operators
of motor vehicles who may otherwise have difficulty obtaining insurance in the open market
due to their driving history.

Question 33

In addition to the legal requirements of ordinary contracts insurance contracts, to be valid, must
contain additional distinctive elements. What are the additional elements of an insurance
contract?

a. Indemnity, Insurable Interest, Subrogation

b. Indemnity, Insurable Interest, Utmost Good Faith

c. Salvage, Subrogation, Contribution

d. Salvage, Subrogation, Utmost Good Faith

Answer 33

b. Indemnity, Insurable Interest, Utmost Good Faith

Question 34

67. In regard to the statutory condition ‘Change of Interest’, after which situation is an insurer still
    liable for loss/damage?

a. Change of title after death
b. Change of title after sale
c. Change of title after donation
d. Change of title after repossession

Answer 34

a. Change of title after death

Question 35

68. A contract is an agreement enforceable at law and has several requirements. Which of the
    following contains the full list of legal requirements of ordinary contracts?

a. Agreement, Genuine Intention, Utmost Good Faith, Consent

b. Agreement, Consideration, Capacity to Contract, Genuine intention, Legality of purpose

c. Agreement, Consideration, Capacity to contract, Utmost good faith

d. Agreement, Capacity to contract, Legality of purpose, Insurable Interest

Answer 35

b. Agreement, Consideration, Capacity to Contract, Genuine intention, Legality of purpose

Question 36

70. The Personal Articles Endorsement provides all-risk coverage on specific classes of personal
    property that are susceptible to thieves and command a higher premium. Which of the
    following may be scheduled on a personal articles endorsement?

a. Video recorder, diamond ring, a painting

b. Violin, diamond ring, skis

c. Sterling silver cutlery, Video recorder, fur coat

d. Sterling silver cutlery, diamond ring, skis

Answer 36

c. Sterling silver cutlery, Video recorder, fur coat

82 4-20
- this one is weird. originally i put D when we reviewed, answer is actually C?

Question 37

71. If an insured accidentally drives his automobile into his own garage door, what damage would
    be covered by Section 7 Loss or Damage coverage with Collision or Upset of the OAP 1?

a. Damage to the automobile

b. Damage to the garage door

c. Damage caused to both the automobile and the garage door

d. Neither damage to the automobile or garage door would be covered

Answer 37

a. Damage to the automobile

Question 38

1. Which legislation is enforced by the Office of the Superintendent of Financial Institutions (OSFI)?

a. The Insurance Companies Act

b. The Highway Traffic Act

c. The Insurance Act

d. The Compulsory Automobile Insurance Act

Answer 38

a. The Insurance Companies Act

• OSFI = federal level

Question 39

2. Which coverage does a comprehensive homeowner policy extend to personal property during a
   move?

a. In transit for a specified period and at the new residence

b. Cannot be insured

c. None without a special endorsement

d. At the new residence, but in transit coverage requires an endorsement

Answer 39

a. In transit for a specified period and at the new residence

Question 40

3. What two basic categories is the insurance business divided into?

a. Property insurance and Liability insurance

b. Property insurance and Casualty insurance

c. Personal insurance and Commercial insurance

d. Life and health insurance, and General insurance

Answer 40

d. Life and health insurance, and General insurance

Question 41

5. What is the OAP 1—Uninsured Automobile Coverage limit for physical damage?

a. $25,000
b. $30,000
c. $35,000
d. $50,000

Answer 41

a. $25,000

-Maxes out at 25k
- review limits

Question 42

7. What is the ONLY coverage available to an injured driver when he has taken the car without the owner’s consent?

a. Accident benefits
b. All perils
c. Uninsured motorist
d. Third-party liability

Answer 42

a. Accident benefits

Question 43

Suri is walking in her neighbourhood when she slips and falls on ice in front of her neighbour’s house where the sidewalk has not been cleared for over a week. Where would the payment to Suri come from?

a. The personal liability section of Suri’s homeowners policy.

b. The personal liability section of the neighbour’s homeowners policy.

c. The premises liability section of Suri’s homeowners policy.

d. The property section of the neighbour’s homeowners policy.

Answer 43

b. The personal liability section of the neighbour’s homeowners policy.

Question 44

11. Which act establishes and governs the automobile statutory conditions?

a. The Insurance Companies Act
b. The Insurance Act
c. The Compulsory Insurance Act
d. The Statutory Accident Benefits Act

Answer 44

b. The Insurance Act

• review Insurance act vs insurance companies act

Question 45

15. Which endorsement is added to a policy that will provide coverage for the cost of using alternate
    transportation while the automobile is being repaired?

a. OPCF 20—Coverage for Transportation Replacement

b. OPCF 29—Additional Coverage for Named Persons

c. OPCF 35—Coverage for Emergency Road Service

d. OPCF 3—Government Owned Automobiles

Answer 45

a. OPCF 20—Coverage for Transportation Replacement

Question 46

18. Alan’s roommate took Alan’s car without permission and was involved in an accident that
    damaged Alan’s car. If Alan has collision and comprehensive, would coverage apply?

a. Yes, as it was not Alan’s fault that the roommate took the car

b. Maybe, it depends on a possible theft charge

c. No, because it would be covered under the roommate’s insurance

d. No, because his roommate did not have permission to use the car

Answer 46

d. No, because his roommate did not have permission to use the car

Question 47

19. Which special class of loss payee has a registered interest on real property as security for the
    money that they have loaned the property owner?

a. Named insured

b. Lessee

c. Mortgagee

d. Insured

Answer 47

c. Mortgagee

• any financial institute who loans you will be classified as a loss payee. has a registered interest on your property

Question 48

20. What is the purpose of a risk sharing pool?

a. A way for the government to ensure that insurance companies are adhering to codes of
conduct.

b. A way for insurers to take on the responsibility of higher exposure risks that still qualify for
the regular market from the members of the association.

c. A way for insurers to transfer some of the responsibility for higher exposure risks that still
qualify for the regular market, among all the members of the association.

d. A way for the government to gather statistical analysis for different risk across Ontario.

Answer 48

c. A way for insurers to transfer some of the responsibility for higher exposure risks that still
qualify for the regular market, among all the members of the association.

Question 48

21. Which insurance distribution system uses salaried employees as their sales force and owns the
    business?

a. General agency
b. Independent brokerage
c. Exclusive agency
d. Direct writing

Answer 48

d. Direct writing

• not C because they are not employed by insurance company, but represent the insurance company

Question 49

22. What is the insurance term for when a contractor is sued by the insurance company after he
    causes a fire while completing repair work on the insureds home?

a. Contracts
b. Contribution
c. Salvage
d. Subrogation

Answer 49

d. Subrogation

• review Contribution vs Subrogation

Question 50

25. How do collateral benefits interact with benefits available from an automobile policy?

a. The insured will receive both benefits.

b. The collateral benefits will no longer be received.

c. They may be deducted depending on the collateral benefit.

d. The insurer pays them back when they are recovered.

Answer 50

c. They may be deducted depending on the collateral benefit.

Question 50

28. What is one of the qualifiers as stated in the verbal threshold for a claimant to sue for noneconomic damages?

a. The claim must be for a serious injury.
b. The claim must be for property damage caused to the claimant.
c. The claimant’s impairment must be a form of bodily injury.
d. The claimant’s impairment must be a permanent serious disfigurement.

Answer 50

d. The claimant’s impairment must be a permanent serious disfigurement.

• verbal threshold = perm

Question 51

29. What is the term for unlawful removal of property from a premise by visible forceable entry or
    exit?

a. Theft

b. Malicious mischief

c. Vandalism

d. Burglary

Answer 51

d. Burglary

Question 52

30. A garage that is attached to the dwelling by a fence is which type of structure?

a. Subsidiary structure

b. Detached structure

c. Attached structure

d. Compound structure

Answer 52

b. Detached structure

Question 53

31. Blake purchases and installs a $2500 stereo for his automobile. Is the full amount of his new
    stereo covered?

a. No, the stereo would not be covered as it is not part of the original car.

b. No, the stereo would be subject to a limit of $1,500.

c. Yes, as the equipment is now part of the vehicle, it would be fully covered up to $2,500.

d. Yes, the stereo is covered with no limitations.

Answer 53

b. No, the stereo would be subject to a limit of $1,500.

• review OAS 8-8

Question 54

32. Who performs the day to day tasks for the Facility Association?

a. Broker Association

b. Every member of the association
c. Ministry of Transportation

d. Servicing Carriers

Answer 54

d. Servicing Carriers

Question 54

34. The condominium corporation is responsible for snow and ice removal on the property. A guest
    falls and sues the corporation for his injuries. The corporation’s policy liability limit is $2,000,000,
    however the plaintiff is awarded $2,500,000 by the court. How does the unit owner’s loss
    assessment insurance coverage apply?

a. The unit owner will be assessed on their share of the shortfall of $500,000 and can claim it on
their unit owner’s policy.

b. The unit owner’s policy pays nothing as the unit owner is not responsible for snow and ice
removal.

c. The unit owner’s policy will pay the entire settlement if the injury occurred on the unit
owner’s driveway.

d. The unit owner’s policy pays nothing as the unit owner was not sued.

Answer 54

a. The unit owner will be assessed on their share of the shortfall of $500,000 and can claim it on
their unit owner’s policy.

Question 55

35. What is an unusual, fortuitous, unexpected, or unforeseen event or occurrence called?

a. Accident
b. Risk
c. Pure Risk
d. Hazard

Answer 55

a. Accident

Question 55

40. What exposures does a commercial comprehensive 3-D policy insure?

a. Dishonesty, Disappearance, and Damage

b. Dishonesty, Disappearance, and Destruction

c. Dishonesty, Disappearance, and Delays

d. Dishonesty, Disappearance, and Disruption

Answer 55

b. Dishonesty, Disappearance, and Destruction

Question 56

41. What is a key purpose of Statutory Conditions?

a. Establish specific rights for the insurer and obligations on the insured.

b. Establish specific rights for the insured and obligations for the insurer.

c. Establish specific rights and obligations for both the insurer and the insured.

d. Establish the rights and obligations for brokers and insurers.

Answer 56

c. Establish specific rights and obligations for both the insurer and the insured.

Question 56

43. With respect to the Outboard Motors/Boats Coverage, a Full Average Clause:

a. Describes average exposure for the policy year, for the calculation of the premium.

b. Requires the insured to bear a portion of any loss if the boat is not insured for its full value.

c. Provides all risk coverage on the hull and motor.

d. Describes average exposure for the policy year for the calculation of loss settlement.

Answer 56

b. Requires the insured to bear a portion of any loss if the boat is not insured for its full value.

Question 57

44. To cover costs for a business to lease a new location to continue business after an insured loss,
    the business would require which of the following?

a. Profits coverage

b. Extra expense coverage

c. Extended business profit endorsement

d. Gross earnings

Answer 57

b. Extra expense coverage

Question 57

49. A fiduciary is someone __________.

a. To whom a bond is given.

b. Who makes good the obligations of the obligee if the principal fails to do so.

c. Who provides a personal guarantee promising to make good any defaults of another.

d. To whom the administration of something is entrusted for the benefit of another.

Answer 57

d. To whom the administration of something is entrusted for the benefit of another.

• entrust

Question 58

55. The insured leaves a tavern, gets into his auto in an intoxicated state, and causes an accident on
    the way home. Which of the following would NOT be covered?

a. Collision damage to his automobile.

b. Damage to a telephone pole.

c. Damage to another automobile.

d. Medical and surgical expenses required as a result of injuries he sustains.

Answer 58

a. Collision damage to his automobile.

Question 58

51. Under a personal liability policy, Employers’ Liability _____________.

a. Acknowledges that the premises is a place where business is conducted, or an area is leased to others.

b. Extends legal liability coverage for bodily injury to residence employees arising out of
their employment for the insured.

c. Extends contingent coverage to employees of the insured if Workers’ Compensation will not
respond for specified reasons.

d. Extends coverage for property damage caused to another by residence employee arising out
of their employment for the insured.

Answer 58

b. Extends legal liability coverage for bodily injury to residence employees arising out of
their employment for the insured.

Question 58

54. An insured calls to report that his automobile went through the ice while ice fishing. His
    OAP 1 Owner’s Form has liability, accident benefits, and comprehensive coverages. What would
    the insurer pay?

a. The claim in full.

b. Nothing, as there is no coverage.

c. The claim less the deductible.

d. Nothing, as the automobile was not being
operated on a public highway.

Answer 58

c. The claim less the deductible.

Question 59

52. Uninsured Motorist coverage _______________.

a. Must be added by endorsement to OAP1 Owner’s Form.

b. Only covers bodily injury, but never property damage.

c. Can cover accidental damage to the insured’s automobile, provided the uninsured
owner or driver of the other automobile is identified.

d. Provides coverage for third parties if the insured causes bodily injury and has breached a
statutory condition.

Answer 59

c. Can cover accidental damage to the insured’s automobile, provided the uninsured
owner or driver of the other automobile is identified.

• OAS 6-6
• must be identifiable
  section 5
  section 7 is for hit and run

Question 60

56. A cigarette sets the automobile seat on fire and causes $450 damage. The policy shows a $300
    deductible under Specified Perils. For a vehicle insured in Ontario, what would the insurer pay?

a. $0.

b. $150.

c. $300.

d. $450.

Answer 60

d. $450.

• OAS 8-5
• peril is fire so it is covered

Question 61

58. In terms of automobile insurance and under Loss of Use Due to Theft, when does reimbursement
    end?

a. The date of the completion of the repairs or replacement.

b. The date the Insurer tenders settlement.

c. Either A or B, whichever occurs first.

d. The expiry date of the policy

Answer 61

c. Either A or B, whichever occurs first.

• you have 72 hrs
• maxes out at 900

Question 62

61. Without slowing down, driver A drives through an intersection on a red light and collides with
    driver B. Driver A is injured and his car is damaged. Driver B is seriously injured and her car was
    destroyed in the accident. What injury and/or damage could be covered by third party liability
    coverage?

a. Driver A’s injury

b. Driver A’s injury and damaged car

c. Driver B’s and driver A’s injuries

d. Driver B’s injury

Answer 62

d. Driver B’s injury

• review third party liability coverage

Question 63

63. Who scrutinizes a risk and decides if it is eligible for insurance?

a. Adjusters
b. Actuaries
c. Underwriters
d. Brokers/agents

Answer 63

c. Underwriters

Question 64

66. For which exposure does the Non-owned Automobile policy provide coverage?

a. Employees using their employer’s commercial vehicle for personal use

b. Employees using their employer’s personal vehicle for personal use

c. Employees using their employer’s commercial vehicle for purposes of the employer’s
business

d. Employees using their personal vehicles for purposes of their employer’s business

Answer 64

d. Employees using their personal vehicles for purposes of their employer’s business

• aka SPF 6 standard policy form
• review non owned auto policy

Question 64

65. While working in the insured’s home, a housekeeper severely injures her hand. Which section of a
    homeowners policy would provide coverage?

a. Voluntary Medical Payments

b. Voluntary Payment for Damage to Property

c. Voluntary Compensation for Residence Employees

d. Voluntary Payment for Bodily Injury

Answer 64

c. Voluntary Compensation for Residence Employees

• when employer is not negligent, it is voluntary

Question 65

69. The Sue and Labour Clause in an insurance policy is designed to:

a. Require the insurer to sue others who may be responsible for loss or damage to the insuredproperty.

b. Require the insurer to do some of the repair work to restore the property.

c. Point out to the insured their duty to take all reasonable steps in and about the recovery of the property in return for agreement that the insurer will contribute to the cost.

d. Permit the insurer to sue the insured for failure to maintain the property in good condition.

Answer 65

c. Point out to the insured their duty to take all reasonable steps in and about the recovery of the property in return for agreement that the insurer will contribute to the cost.

Question 65

68. Your client wants to insure some items of historical value. What do you advise your client?

a. Items of historical value are fully covered under an all-risk policy.

b. Purchase a fine arts floater.

c. Insure the items with a broker who specializes in items of historical significance.

d. Purchase a personal articles endorsement.

Answer 65

b. Purchase a fine arts floater.

• Review fine art floater vs personal articles endorsement

Question 66

70. A Building worth $100,000 is insured for $60,000 under a policy with 80% co-insurance clause.
    Fire damages the building to the extent of $90,000. How much would the insurer pay?

a. $60,000

b. $48,000

c. $50,000

d. $67,500

Answer 66

a. $60,000

Question 67

73. An insured’s house is destroyed by fire and due to local by-laws, has to be rebuilt with more
    expensive materials. In the absence of a special endorsement indicate if the comprehensive
    homeowners policy covers:

a. The cost plus 25% for improvements and betterments.

b. The increased cost to rebuild.

c. The cost plus 10% for improvements and betterments.

d. The cost to rebuild in the same manner and the same general materials as existed
before the loss.

Answer 67

d. The cost to rebuild in the same manner and the same general materials as existed
before the loss.

Question 68

75. Your insured owns a summer residence with a detached garage and tool shed. The property is
    insured for Fire & Extended Coverage Perils under a Seasonal Dwelling form. What is the maximum amount of insurance that could apply if one of these detached structures is destroyed
    by fire?

a. The actual cash value of the destroyed structure without reference to the other structures.

b. That proportion of 10% of the amount of insurance on the dwelling building that the value of
the destroyed structure bears to the total value of both structures.

c. 10% of the amount of insurance on the dwelling.

d. 10% of the amount of insurance on the dwelling divided by the number of structures.

Answer 68

b. That proportion of 10% of the amount of insurance on the dwelling building that the value of

• ? i dont get it

Question 69

76. Your insured has a condominium Unit Owners Comprehensive policy. While smoking in bed,
    he/she negligently causes a fire in his/her unit. The fire spreads to the adjoining unit and the
    occupant is overcome by smoke and dies. Under which section of the policy would the insurer
    respond if a claim were made by the relatives of the deceased person?

a. Voluntary Medical Payments

b. Personal Liability Coverage

c. Loss Assessment Liability Coverage

d. Loss Assessment Property Damage Coverage

Answer 69

b. Personal Liability Coverage

• review personal liability coverage

Question 70

77. Which one (1) is NOT TRUE of the Replacement Cost Coverage under a homeowners
    comprehensive policy?

a. Payment will be made without deduction for depreciation.

b. Replacement cost coverage for contents must be endorsed on to the policy.

c. Replacement cost coverage applicable to both the building and personal belongings
insured under the policy are basic coverages.

d. Replacement must be made with property of similar quality.

Answer 70

c. Replacement cost coverage applicable to both the building and personal belongings
insured under the policy are basic coverages.

Question 71

79. Your insured is driving alone and is injured in an accident in the state of Georgia. The U.S. driver is
    found 100% at fault. Your insured carries $1,000,000 liability coverage and the OPCF #44 Family
    Protection Coverage. The other vehicle is covered for Bodily Injury $10,000 one person $20,000 to
    two or more persons and $10,000 property damage. Your insured is awarded $180,000 in
    damages for bodily injury. How much would be paid out under the OPCF #44?

a. $140,000

b. $180,000

c. $170,000

d. $160,000

Answer 71

c. $170,000

-OAS 10-20

Question 72

80. In the following statements about Section 6- Direct Compensation – Property Damage of the OAP
    1 Owner’s Form, which one (1) is INCORRECT?

a. The accident may occur anywhere in Canada and at least one of the other automobiles
involved is insured under an automobile insurance policy.

b. The insured collects from his/her insurer even though the operator of the vehicle, with the
insured’s consent was not entirely at fault for the accident.

c. It covers damage to the automobile, certain unscheduled trailers, their equipment and
contents caused by another automobile in Ontario, including their loss of use.

d. The policy on the other vehicle must be issued by an Ontario licensed insurer or one that has
filed with the Ontario Insurance Commission to provide this coverage.

Answer 72

a. The accident may occur anywhere in Canada and at least one of the other automobiles
involved is insured under an automobile insurance policy.

Question 73

Which one (1) of the following accidents would be considered a loss under Section 7.1.2.B,
comprehensive of an O.A.P. 1 Owner’s Form policy?

a. Your insured’s windshield was smashed by a falling boulder while driving through a rock-slide
area.

b. You insured, while passing another vehicle at the entrance to a narrow bridge, struck the
bridge supports.

c. Your insured severely damaged the undercarriage of his vehicle when he/she struck
pothole in the roadway.

d. Your insured’s towing a trailer and stopped quickly causing the trailer to hit the rear of
his/her automobile damaging both vehicles

Answer 73

a. Your insured’s windshield was smashed by a falling boulder while driving through a rock-slide
area.

Question 74

83. Anne and her sisters rent a vehicle while on vacation. Anne, who will mainly drive the rental car,
    has an OAP 1 with an OPCF 27 added. Does Anne’s insurance extend to her sisters if they drive
    the rental car?

a. Yes, if each of her sisters have their own OAP 1 with an OPCF 27.

b. Yes, if her sisters have been specifically listed on Anne’s OPCF 27 endorsement.

c. No, because they do not have valid driver’s licences in the country that they are vacationing in.

d. No, because they did not declare their intention to the rental company.

Answer 74

b. Yes, if her sisters have been specifically listed on Anne’s OPCF 27 endorsement.

Question 75

86. Peter is injured in an accident with an uninsured driver outside of Ontario. The minimum liability
    where the accident occurs is $100,000. He carries a $1 million limit and the loss is $300,000.
    Which liability limit would apply to this loss?

a. $300,000

b. $100,000

c. $1,000,000

d. $200,000

Answer 75

b. $100,000

• OAS 6-4

Question 76

87. An insured with basic homeowners insurance rents a basement apartment to tenants. Which loss
    would be EXCLUDED?

a. Damage to the front window results from a driver losing control of his vehicle.

b. A kitchen fire causes extensive damage to the homeowner’s fittings and fixtures.

c. Vandals cause damage to the building which has been reported to the police.

d. The tenants move out and take all the homeowner’s appliances from the rental unit.

Answer 76

d. The tenants move out and take all the homeowner’s appliances from the rental unit.

• review basic homeowners

Question 77

89. If a tenant causes fire damage to an apartment building, which policy will most likely respond to the
    insured loss?

a. Tenants legal liability

b. Building owners policy

c. Personal legal liability

d. Contractual liability policy

Answer 77

a. Tenants legal liability

• Review tenants legal liability

Question 78

90. Which theft loss would be covered by a basic homeowners policy?

a. Theft by tenants or from parts of the dwelling rented to tenants.

b. Theft of property or building materials from properties under construction.

c. Theft of personal property from insured’s principal dwelling and damage to the building
due to attempted theft.

d. Theft from secondary locations if insureds are not residing there.

Answer 78

c. Theft of personal property from insured’s principal dwelling and damage to the building
due to attempted theft.

Question 79

94. How would a comprehensive homeowners policy respond to the theft of the insured’s antiques that
    are on exhibit at a local fair?

a. There is theft coverage with a special limit.

b. There is no coverage as property on exhibit is excluded.

c. There is coverage provided for half the loss.

d. There is no coverage as antiques are excluded.

Answer 79

b. There is no coverage as property on exhibit is excluded.

• at the exhibit which increases the chance of loss, would need exhibition floater