RIBO Practice Exam 7

Question 1

What two (2) types of risks can be included in a property risk?

Select one:

a.
Personal losses and indirect losses

b.
Direct losses and indirect losses

c.
Direct losses and liability losses

d.
Personal losses and liability losses

Question 2

What type of risk is Harry taking, when he opens a new barber shop on a busy downtown street and expects to earn a big profit?

Select one:

a.
Pure risk

b.
Speculative risk

c.
Moral risk

d.
Insurable risk

Question 3

Identify an example of a pure risk.

Select one:

a.
Physical injury

b.
Stock market

c.
Business investment

d.
Gambling

Question 4

Q: A building owned by A. is sold for cash to B. Two days after the sale, a fire destroys the building causing a loss of $100,000. Neither the broker nor the insurer were notified of the change in ownership. The insurer would pay

Select one:

a.
$80,000.

b.
Nothing.

c.
$50,000.

d.
$100,000

Question 5

Q: A building worth $120,000 is insured for $60,000 under a fire policy with an 80% co-insurance clause. Fire damages the building to the extent of $104,000. How much would the insurer pay?

Select one:

a.
$48,000.

b.
$52,000.

c.
$60,000.

d.
$65,500

Answer 5

c.
$60,000.

• you cannot collect more than the limit of insurance

Question 6

Q: A valued policy is one which

Select one:

a.
Provides for replacement cost of the property irrespective of the amounts of the insurance.

b.
Establishes, at the time the policy is issued, the amount of insurance the insurer will pay in the event the property is totally damaged, lost or destroyed.

c.
Is a special kind of policy, rarely issued and is therefore, highly “valued”.

d.
Agrees to pay for the full value of the damage, however, caused.

Question 7

Q: If an insured requests mid-term cancellation of a policy, the insurer will

Select one:

a.
Allow a pro-rata refund of a portion of the premium.

b.
Make a note in the file not to renew.

c.
Allow a short rate refund of a portion of the premium

d.
Advise the insured the premium is fully earned.

Question 8

Q: In insurance terms, a peril is frequently described as a cause of loss. Which one (1) of the following is NOT a peril.

Select one:

a.
Fire.

b.
Windstorm.

c.
Burglary.

d.
Gasoline.

Question 9

Q: Nearly every insurance policy has Policy Conditions which are common to all policies issued in a particular class. Some policies contain Statutory Conditions. Which one (1) of the following types of insurance has Statutory Conditions?

Select one:

a.
Yacht insurance policy.

b.
Burglary insurance policy.

c.
Liability insurance policy.

d.
Fire insurance policy.

Question 9

Q: Subrogation is

Select one:

a.
Following payment of a loss to the insured, the right of the insurer to seek recovery from any other party responsible.

b.
The percentage of risk taken by each insurer on a subscription policy.

c.
Co-insurance where more where more than one property is destroyed in the same fire.

d.
The insurer’s right to deny the claim.

Question 10

Q: The agreement or contract between an insurance broker and an insurer usually authorizes the broker to do one (1) of the following. Which is it?

Select one:

a.
Bind the insurer on acceptable risks.

b.
Issue registered letters on behalf of the insurer to cancel policies.

c.
Establish their own rates and premium on the business they write.

d.
Pay all claims on behalf of the insurer.

Question 11

Q: The contents of a building are insured for $45,000 but valued at $100,000. The policy contains a 90% co-insurance clause along with a $2,500 deductible clause. If fire damages the contents to the extent of $8,000, how much would the insurer pay?

Select one:

a.
$7,000.

b.
$1,500.

c.
$8,000.

d.
$5,500.

Answer 11

Reference: C81 - Study 7 - LO2

The correct answer is: $1,500.

• don’t forget the deductible

Question 11

Q: The insurance industry is very particular about specific definitions describing various perils under crime coverages. Which one (1) of the following would be considered a robbery loss?

Select one:

a.
Criminals hid themselves in your insured’s store when the store was closing for the evening. They stole several valuable items of stock and took all of the change out of the cash register. They then forced the rear door and escaped.

b.
A group of violent people entered your insured’s store, threatened the clerks on duty with a gun and carried away several items of stock and all the cash in the cash register.

c.
An employee stole funds from the cash register while making change for a customer.

d.
A customer entered your insured’s store and secretly carried out several items of merchandise without paying for them.

Question 11

Q: What is Contribution?
Select one:

a.
The sharing of loss or liability between two or more insurance companies

b.
The amount of loss which the insured must pay

c.
Amount of loss a third party must pay for their responsibility

d.
Stated amount payable on the occurrence of the event insured against

Answer 11

The correct answer is: The sharing of loss or liability between two or more insurance companies

Question 12

Q: The insured, under a property policy, goes bankrupt and there is a loss shortly thereafter. Which (1) one of the following statements is TRUE?

Select one:

a.
Bankruptcy is considered a material change to the risk and the policy is therefore void.

b.
As the insured is bankrupt, the policy is void.

c.
The loss would be paid by the Trustee in Bankruptcy.

d.
The insurer is liable to pay the trustee in bankruptcy.

Question 12

Q: The insured decides to install a recreation room in the basement of the house. How may this affect coverage under the insured’s Homeowners Comprehensive Policy?

Select one:

a.
The insurer must be notified, otherwise any loss involving the building will not be covered.

b.
If the policy covers sewer back-up, that peril will no longer be insured.

c.
Coverage under the policy will not be affected.

d.
Losses to the recreation room will not be covered unless the insurer has been advised of the change.

Answer 12

Reference: C81 - Study 5 - LO5

The correct answer is: Coverage under the policy will not be affected.

Question 13

Q: Where a loss occurs under an insurance binder before a policy has been issued, the insurer will

Select one:

a.
Take no action until a policy is issued.

b.
Pay the claim in accordance with the coverages bound.

c.
Demand that the broker pay the loss.

d.
Cancel the binder by registered letter and deny liability,

Question 14

Q: Which one (1) of the following does NOT have an insurable interest in a building owned by the insured which is mortgaged?

Select one:

a.
The Mortgagee.

b.
The Owner.

c.
The Estate of the owner.

d.
A Prospective purchaser of the property.

Question 15

Q: A subscription policy differs from other policies in that _______________.

Select one:

a.
It is specifically designed for a particular risk and does not use preprinted wordings

b.
More than one insurer participates in a policy prepared by the lead company

c.
More than one insurer covers a portion of the risk under its own wording

d.
Court decisions have established the meanings of words regardless of the intent

Question 15

Q: Pure premium is which of the following?

Select one:

a.
Total premium required by the insurance company

b.
Premium required to meet the stated anticipated losses

c.
Rate or unit of premium required

d.
Premium required to meet the losses that occur

Question 15

What is insurance?

Select one:

a.
A necessary product mandated by all governments

b.
An expensive way of an individual taking care of their financial future

c.
A way to ensure that fraudulent claims are not paid out

d.
A method of collecting funds from all members of a group and then using them to pay for the losses of the few

Question 16

Q: A building has a replacement cost of $200,000 and is subject to a 90% Coinsurance clause. The Insured carries insurance in the amount of $90,000 and there is a $60,000 loss to the building. What will the Insurance Company pay?

Select one:

a.
$60,000

b.
$30,000

c.
$27,000

d.
$35,000

Question 16

Q: Which of the following is the definition of Insurance-to-value?

Select one:

a.
The highest limit the client asks for

b.
Coverage not subject to coinsurance

c.
Coverage to 80% of the item’s value

d.
Insurance in the amount that the item is worth

Question 16

Q: Which of the following is the definition of Insurance?

Select one:

a.
The undertaking of one person to indemnify another person against loss

b.
The sharing of many losses among a few people

c.
Ensures that a loss will not occur

d.
Requires a small group of people each of whom contributes a considerable sum to a common fund

Question 17

A fire damages your neighbour’s house and during repairs the damage extends to your house. What type of cause would the peril of fire be to your property?

Select one:

a.
Effective cause

b.
Remote cause

c.
Immediate cause

d.
Proximate cause

Answer 17

Reference: C81 - Study 1 - LO3

The correct answer is: Remote cause

• this was an interrupted cause of event ie fire > repaired > dmg to your home

Question 18

How can insurance be an aid to credit?

Select one:

a.
It increases the available credit insureds have access to

b.
It substitutes a certain premium payment in place of an uncertain loss payment

c.
It is a source of employment for many Canadians

d.
It is almost impossible to obtain credit without having insurance on the item concerned

Question 19

Fire, crime, business interruption, liability and automobile insurance are examples of what type of insurance?

Select one:

a.
Casualty insurance

b.
General insurance

c.
Health insurance

d.
Life insurance

Question 19

What are some examples of perils available in extended coverage?

Select one:

a.
Fire, Freezing, and Vandalism or Malicious Acts

b.
Explosion, Riot, and Windstorm

c.
Water Escape, Rupture, and All Lightning

d.
Falling Object, Smoke, and Theft

Question 20

What are actuaries responsible for?

Select one:

a.
Management of branch operations

b.
Scrutinizing a risk and deciding on eligibility for insurance

c.
Analyzing data and performing calculations that determine the rate (price) of various classes of insurance

d.
Analyzing the validity of claims brought forward by adjusters

Question 20

Which statement best describes stock companies?

Select one:

a.
Companies with the main purpose of making a profit for shareholders

b.
Companies owned by their members

c.
Companies that require no capital or shareholders

d.
Companies that have extensive engineering and training facilities

Question 21

What is facultative reinsurance?

Select one:

a.
Reinsurance on an excess of loss basis covered by a treaty negotiated annually

b.
Reinsurance in which the reinsurer automatically accepts a portion of the insurer’s liability for a specified class

c.
Reinsurance of risks on a class-by-class basis, so all risks in a designated class are automatically reinsured

d.
Reinsurance of risks on an individual case-by-case basis subject to acceptance or rejection by the reinsurer

Question 22

What does a certificate of insurance confirm?

Select one:

a.
The correct coverage details to the insured

b.
The existence of insurance for someone with Insurable interest

c.
The coverage changes made by the insured

d.
The correct coverage details to the insurer

Question 23

What does it mean to uphold utmost good faith?

Select one:

a.
Applicant can decide which facts to disclose or omit on the application

b.
Applicant should have faith in the insurer to pay the claim in the event of a loss

c.
Insurer should never believe what the applicant has disclosed on the application

d.
Maintain the highest standard of integrity by all parties to the contract

Question 24

Q: A Tenant’s Comprehensive policy provides coverage for Voluntary Payment for Damage to Property. This applies to only one (1) of the following situations. Which is it?

Select one:

a.
Property of others damaged unintentionally by the insured, even though not legally liable.

b.
Loss by theft from insured’s premises of a shotgun on loan from local sporting goods store.

c.
Damage to a ride-on lawnmower rented from a local rent-all establishment.

d.
Damage caused by a guest, who backed an automobile into a portable barbeque which the insured had borrowed from a neighbor.

Question 25

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

Select one:

a.
Insured

b.
Mortgagee

c.
Named insured

d.
Lessee

Question 26

Who is responsible for overseeing privacy legislation in the provinces and territories?

Select one:

a.
The superintendent of insurance

b.
The premier of each province

c.
The Superintendent of financial institutions

d.
The provincial or territorial ombudsperson or commissioner

Question 27

Q: A Tenant’s Comprehensive policy provides coverage for Voluntary Payment for Damage to Property. This applies to only one (1) of the following situations. Which is it?

Select one:

a.
Property of others damaged unintentionally by the insured, even though not legally liable.

b.
Loss by theft from insured’s premises of a shotgun on loan from local sporting goods store.

c.
Damage to a ride-on lawnmower rented from a local rent-all establishment.

d.
Damage caused by a guest, who backed an automobile into a portable barbeque which the insured had borrowed from a neighbor.

Question 28

Q: Which one (1) of the following does the Homeowners Comprehensive policy automatically cover?

Select one:

a.
Private structures on the insured’s premises.

b.
Personal belongings temporarily stored in a storage warehouse for all listed perils of the policy.

c.
Owned recreational vehicles.

d.
Insured’s tools used in connection with his carpentry business, which he keeps at his place of business.

Question 29

Q: A vacancy permit is required to continue fire insurance on a property where ___________.

Select one:

a.
The occupant has taken a six-month vacation and left no one to take care of the residence and its contents.

b.
The occupants have moved out and do not intend to return.

c.
The insured has moved out with one half of the contents and left his wife with only half of the house furnished.

d.
The occupant has been transferred to another location and resides in the premises only on weekends.

Question 30

Q: 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 Homeowners Comprehensive policy covers

Select one:

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.

Question 31

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

Select one:

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

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.

Question 32

Q: To what extent does Loss Assessment Coverage A2 in a Comprehensive Condominium Unit Owners Policy cover an assessment against a unit owner?

Select one:

a.
Any assessment made by the Condominium Corporation as a contribution to cover the deductible in the Condominium Corporations insurance.

b.
Any covered assessment made by the Condominium Corporation, as additional insurance up to the limit specified on Unit Improvements and Betterments.

c.
Any assessment not exceeding $25,000, made in respect of any losses sustained by the Condominium Corporation.

d.
Any covered assessment made by the Condominium Corporation up to $10,000 or the limit specified in the Unit Owners policy declarations.

Question 33

Q: Which one (1) of the following coverages under a Homeowners Comprehensive policy including Inflation Protection is NOT automatically increased in amount at the anniversary date of the policy?

Select one:

a.
Additional Living Expense coverage.

b.
Dwelling Building coverage.

c.
Liability coverage.

d.
Personal Property Coverage.

Question 33

Q: Under the Tenants Comprehensive policy, all of the following, EXCEPT ONE covers the tenant’s own property. Mark the EXCEPTION.

Select one:

a.
Damage to the exterior of the building directly caused by vandalism or malicious acts.

b.
Property temporarily removed from the residence for 14 days after a loss to protect it from further damage.

c.
Personal property damaged by change of temperature resulting from physical damage by an insured peril.

d.
Theft cover on money up to $500 and securities up to $2,000.

Question 34

Q: Which one (1) of the following would protect your client against a loss due to the dishonesty of an employee?

Select one:

a.
A hold-up policy.

b.
A burglary policy.

c.
A theft policy.

d.
A fidelity policy.

Question 35

Q: Which one (1) of the following liability coverages is intended to protect an insured who is planning to build a new home and will be sub-letting part of the contract to subcontractors?

Select one:

a.
Blanket contractual liability insurance.

b.
Employers liability insurance.

c.
Owner’s or contractor’s protective liability insurance.

d.
Personal injury insurance.

Answer 35

Reference: C82 - Study 7 - LO1

The correct answer is: Owner’s or contractor’s protective liability insurance.

• look at C82 7-10 chart

Question 35

Q: Which one (1) of the following is a type of Business Interruption Insurance?

Select one:

a.
Builder’s Risk Insurance.

b.
Named Perils Insurance.

c.
All Risk Insurance.

d.
Profits Insurance.

Answer 35

Reference: C82 - Study 6 - LO4

The correct answer is: Profits Insurance.

Question 36

Q: Your client, John Smith insures his Condominium Unit through your office on a Comprehensive form subject to a $200 deductible. He calls in a fire damage claim. Damage is estimated to be $750 to replace a dishwasher, $1000 for the marble countertop and $250 to clean the cabinets. How much will he recover under his policy?

Select one:

a.
$750 for the dishwasher, $250 for the cabinets, less the deductible

b.
$2000 for the entire loss

c.
$750 for the dishwasher, less the deductible

d.
$1800 for the entire loss

Question 37

Q: Laws regulating the zoning, demolition, repair, or construction of buildings and their related services can increase the costs of repairs to buildings. Which of the following is a true statement about these increased costs?

Select one:

a.
The costs are considered uninsurable

b.
Only insurable under an “All Risk” Policy

c.
Partly covered under the 10% extension clause in most policies

d.
Insurable if specified in a property policy

Question 37

Q: Your insured owns one of each of the vehicles listed and seeks advice concerning coverage. Which one (1) is covered under the Liability section of the Homeowners Comprehensive policy?

Select one:

a.
A trail bike.

b.
A moped.

c.
A snowmobile.

d.
A motorized wheelchair.

Answer 37

Reference: C82 - Study 7 - LO2

The correct answer is: A motorized wheelchair.

• review special limits

Question 37

When items covered by a personal articles endorsement have more sentimental value than financial value, on what basis are they covered?

Select one:

a.
A retail cost basis

b.
A valued basis

c.
A depreciated basis

d.
A coinsurance basis

Question 38

Q: Which of the following is automatically included under the Property Coverages of a Homeowners Comprehensive Policy?

Select one:

a.
Fine Arts

b.
Summer cottage

c.
Outboard motor/boat

d.
Additional living expenses

Question 38

Which water damage loss would be covered by a basic homeowners policy?

Select one:

a.
Melting and refreezing ice and snow causes extensive damage to the roof.

b.
During a heavy rainfall, water pools in the basement window wells and floods into the house through the basement windows.

c.
Lightning makes a hole in the roof of a dwelling before the opening can be covered, rain damages the interior and personal property.

d.
Water seeps in slowly over time through a crack in the foundation and causes mould to grow in the basement.

Question 39

Which additional condition of a comprehensive homeowners policy warrants that no one other than the policyholder who has custody of the insured property will benefit from the policy?

Select one:

a.
Subrogation

b.
No benefit to bailee

c.
Notice to authorities

d.
Sue and labour

Question 40

What coverage is included in the extension of coverage-property temporarily removed–of a tenants policy?

Select one:

a.
Contents being held in a storage unit within the building

b.
Contents temporarily moved to a nursing home with an elderly parent

c.
Personal property of others being stored by the tenant

d.
Personal property of a student temporarily living away from home

Answer 40

Reference: C82 - Study 5 - LO1

The correct answer is: Personal property of a student temporarily living away from home

Question 40

What is a typical cause of a sewer back-up into a home?

Select one:

a.
Storm surge

b.
Flooding

c.
Overwhelmed municipal sewer systems

d.
Overland water

Question 41

What is the difference between burglary coverage and theft coverage for a cottage or seasonal dwelling?

Select one:

a.
Theft coverage is available for cottages or seasonal dwellings, while burglary coverage is not.

b.
Burglary coverage indemnifies insureds for theft losses up to $500, and theft coverage indemnifies insured for losses greater than $500.

c.
Burglary coverage requires there be unlawful removal of property from the premises by visible forcible entry, while theft coverage does not.

d.
Theft coverage requires there be unlawful removal of property from the premises by visible forcible entry, while burglary coverage does not.

Question 41

What is covered under the personal property section of mobile homeowners policy form?

Select one:

a.
Contents damage for theft, burglary and vandalism

b.
Liability for payment of damages awarded in a lawsuit

c.
Building damage while the building is in transit

d.
Building and contents damaged by an insured peril

Question 42

Q: How would you describe to your policyholder the purpose of OPCF #44 Family Protection Coverage? It is designed to

Select one:

a.
Indemnify an insured up to the limit of the insured’s policy for an amount he/she is legally entitled to recover for bodily injury or death from an inadequately insured Third Party.

b.
Ensure protection to the insured for injuries to any passengers resulting from the insured purchasing inadequate coverage limits.

c.
Provide flexibility in the insured’s coverage in case it is inadequate to meet the costs resulting from the use or operation of the insured vehicle.

d.
Provide additional third party liability insurance if the insured is involved in an accident in a state or province where the statutory minimum limits are higher than those being carried.

Question 42

On which basis(es) can a professional liability policy be written?

Select one:

a.
Occurrence basis is the only option

b.
Claims-made basis is the only option

c.
Both claims-made and occurrence basis depending on the coverage

d.
Claims-made or occurrence basis

Question 43

Q: A client phones to tell you he has bought a high-end stereo system costing $5,000 which has just been installed in his car. What should you tell him?

Select one:

a.
Be sure to always lock the car as there is no coverage if the system is stolen when the car is unlocked.

b.
There is no coverage on the system without an approved security system in the car.

c.
No further action is needed. The new system is automatically covered under the O.A.P. 1 Owner’s Form as part of the car.

d.
To provide you with a copy of the invoice so you can have his O.A.P. 1 Owner’s Form endorsed to cover its full value.

Question 44

Q: An insured requests that the limit of liability in his/her automobile policy O.A.P. 1 be reduced. What is the minimum amount he/she must carry under Ontario Law.

Select one:

a.
$100,000/$300,000 - Bodily Injury, $50,000 - Property Damage

b.
$500,000 inclusive.

c.
$200,000 inclusive.

d.
$100,000 inclusive.

Question 45

Q: The basic Income Replacement Benefit payable under O.A.P. 1 Owner’s Form, Section 4 - Accident Benefits Coverage is $400 per week. The actual amount is based on

Select one:

a.
80% of Net Income.

b.
70% of Net Income.

c.
70% of Gross Income

d.
90% of Gross income

Answer 45

Reference: OAS - Study 5 - LO2

The correct answer is: 70% of Gross Income

-The amount of the benefit for the first 104 weeks is 70 percent of the insured person’s gross weekly income. The maximum weekly income benefit is $400 unless an optional income replacement benefit has been purchased.

Question 45

Q: The lessor of an automobile is

Select one:

a.
The person or entity to whom the vehicle is leased.

b.
The automotive dealer who sold the vehicle which was subsequently leased.

c.
The employee who drives the leased automobile.

d.
The owner from whom the vehicle is leased.

Question 46

Q: Under the “What Automobiles Are Covered” section of O.A.P. 1 Owner’s Form, a newly acquired automobile is automatically covered for a period of 14 days. This automatic coverage is limited to

Select one:

a.
Those coverages which applied to the vehicle replaced or which apply to all of the insured’s vehicles if it is an additional automobile.

b.
Private passenger vehicles only.

c.
A vehicle which replaces one already insured under the policy.

d.
Vehicles which are chiefly used for pleasure purposes.

Answer 46

Reference: OAS - Study 3 - LO1

The correct answer is: Those coverages which applied to the vehicle replaced or which apply to all of the insured’s vehicles if it is an additional automobile.

The insured must notify the insurer within 14 days of taking possession of the newly acquired automobile. This gives the insured time to have the change to the policy property recorded. It is insured for the same coverages as the described vehicle it replaces.

Question 47

Q: A burning cigarette on the seat of an automobile causes $450 damage. The specified perils policy has a $300 deductible. How much would the insurer pay?

Select one:

a.
$300.

b.
$0.

c.
$150.

d.
$450.

Answer 47

Reference: OAS - Study 8 - LO1

The correct answer is: $450.

• for AUTO, fire or lighting, no deductible is required

Question 47

Q: 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?

Select one:

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 abutment.

c.
Your insured severely damaged the undercarriage of his vehicle when he/she struck a pot-hole in the roadway.

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

Answer 47

Reference: OAS - Study 8 - LO1

The correct answer is: Your insured’s windshield was smashed by a falling boulder while driving through a rock-slide area.

• any falling object. comprehensive is not COLLISION

Comprehensive automobile coverage protects an insured automobile against all perils other than collision or upset. Perils covered by comprehensive include, but are not limited to: perils listed under specified perils; falling or flying objects; missiles (including windshield claims caused by stone chips); vandalism.

Question 48

Q: Complete the sentence with the CORRECT option. The OPCF44 Family Protection endorsement ______________

Select one:

a.
allows an insured to recover up to the limit of his own policy.

b.
applies a deductible to injury losses.

c.
applies to property damage caused by unidentified and uninsured motorists.

d.
is part of every Canadian owner’s automobile policy.

Question 48

Q: A vehicle parked on a frozen lake, while the owner was ice fishing, goes through the ice. Which one (1) of the following best describes how the OAP 1 Owners policy with Liability, Accident Benefits and Comprehensive coverage would respond?

Select one:

a.
Pay the claim less the deductible.

b.
Not pay the claim, as there is no coverage for this peril.

c.
Pay the claim and waive the deductible.

d.
Not pay the claim, as the automobile was not being operated on a public highway.

Answer 48

Reference: OAS - Study 8 - LO4

The correct answer is: Pay the claim less the deductible.

comprehensive automobile coverage includes specified perils and it allows coverage for sinking.

Question 49

Q: In the Additional Agreements of the Insurer, Own Damage, the insurer agrees to waive subrogation against which of the following?

Select one:

a.
A neighbor driving the auto with the insured’s consent.

b.
A neighbor who had care or custody of the auto for repair purposes.

c.
Someone who was storing the auto in a parking garage.

d.
Anyone, other than the named insured, who has breached any condition of the policy.

Question 49

Q: Under Section 7, Physical Damage to Own Automobile coverage, the insurer agrees to indemnify ___________________.

Select one:

a.
The named insured.

b.
Any of the above.

c.
Any occupant of the vehicle.

d.
Anyone who drives or operates the automobile with consent.

Answer 49

Reference: OAS - Study 8 - LO1

The correct answer is: The named insured.

• who ever the registered owner is

Loss or damage coverages indemnify the insured for direct and accidental loss of or damage to the vehicle and it’s equipment.

Question 49

Q: In which of the following situations is coverage available for a temporary substitute automobile?

Select one:

a.
The insured rents an automobile while on vacation in Florida.

b.
A friend lends his automobile to the insured.

c.
The insured borrowed his friend’s automobile while his vehicle is being repaired.

d.
The insured borrows the company van to move a few pieces of furniture.

Question 50

Q: What type of automobile insurance policy provides liability coverage to a person who does not own an automobile but requires coverage for other automobiles?

Select one:

a.
Excess policy

b.
Lessors Contingent policy

c.
Driver’s policy

d.
Standard non-owned policy

Answer 50

Reference: OAS - Study 10 - LO6

The correct answer is: Driver’s policy

-When a person drives a vehicle that belongs to another and does not have automobile insurance of his or her own that extends coverage to “other automobiles”, or it is a government-owned automobile, a driver’s policy (OAP 2) is available to provide coverage. It is also used when there is uncertainty as to whether the vehicle to be driven is insured.

Question 50

Q: The Facility Association

Select one:

a.
Is an Ontario Government- owned insurance company for bad automobile risks

b.
Is a pooling arrangement of all automobile insurers who share the loss experience of the pool.

c.
Is an insurer specializing in insuring only personal automobile risks.

d.
Is an association of fifteen responsible insurers who provide insurance for substandard automobile risks.

Answer 50

Reference: OAS - Study 11 - LO2

The correct answer is: Is a pooling arrangement of all automobile insurers who share the loss experience of the pool.

Question 50

Q: Which of the following documents must be approved by the provincial government?

Select one:

a.
Application forms.

b.
Policy forms.

c.
Endorsement forms.

d.
All of the above.

Question 51

Q: An insured has Collision and Comprehensive coverages on his auto. Which of the following situations would not be included by these coverages?

Select one:

a.
Custom duties charged on repairs to the auto while the insured was vacationing in the USA

b.
Loss of use by theft

c.
Theft of the auto by the insured’s roommate

d.
Legal liability for damage to a temporary substitute auto

Answer 51

Reference: OAS - Study 8 - LO2

The correct answer is: Theft of the auto by the insured’s roommate

you’d only get it if you had all perils coverage

Loss or damage caused by theft by any person or persons living in the same dwelling premises as the insured.

Question 51

Municipal governments have jurisdiction to make laws relating to which areas?

Select one:

a.
Health services, education, and driving speed

b.
Telecommunications, fisheries, and impaired driving

c.
Zoning, construction permits, parking

d.
Fisheries, education, parking

Question 51

Which organization insures high risk drivers?

Select one:

a.
Residual Market

b.
Crown Corporation

c.
Facility Association

d.
Insurance Association of Ontario

Question 52

What is, the time frame during which the insurance will apply?

Select one:

a.
Application date

b.
Expiry date

c.
Policy period

d.
Rating information

Question 52

Driving experience; driving record; and vehicle usage are factors commonly used for what purpose related to automobile insurance?

Select one:

a.
Endorsements

b.
Subrogating

c.
Ratemaking

d.
Risk selection

Question 53

Is there insurance coverage under OAP 1 when the ridesharing driver has accepted a ride and is driving to the rider’s pick-up location?

Select one:

a.
No, it is insured by the rider

b.
Yes, it is not part of the commercial transaction

c.
Yes, it is similar to commuting to work

d.
No, It is considered a part of the excluded commercial transaction

Question 54

How are the additional agreements of the insured in the OAP 1 reinforced?

Select one:

a.
Through the requirements of common law

b.
Through the Insurance Companies Act

c.
Through the Statutory Conditions

d.
Through the Insurance Act

Question 54

Which Act outlines a person’s legal liability as a driver?

Select one:

a.
Insurance Act of Ontario

b.
The Highway Traffic Act

c.
Common Law

d.
Fault Determination Rules

Question 55

According to Ontario’s Statutory Accident Benefits Schedule (SABS) for accidents occurring in or outside Ontario, who is an insured person?

Select one:

a.
Pedestrians involved in the accident.

b.
Occupants of two public transit vehicles that collided with one another.

c.
Bystanders who were witnesses to the accident.

d.
The named insured and anyone listed in the policy as a driver of the insured automobile.

Question 55

Injured parties can sue for non-economic loss if an impairment they suffer due to an automobile accident meets which threshold?

Select one:

a.
The impairment requires at least 6 months of treatment to improve.

b.
The impairment is a permanent serious disfigurement.

c.
The impairment requires at least 12 months of treatment to improve.

d.
The impairment is any form of bodily injury.

Answer 55

Reference: OAS - Study 4 - LO3

The correct answer is: The impairment is a permanent serious disfigurement.

Question 56

Under the automobile Statutory Condition—Time and Manner of Payment what must the insurer do if a claim is denied?

Select one:

a.
Inform the insured that the insurer is not liable to pay the claim; there is no specified time for format requirement for the notification to the insured.

b.
Promptly inform the insured in writing of the reasons the insurer is not liable to pay the claim.

c.
Promptly inform the insured of the denied claim and refund a portion of their premium.

d.
File a dispute resolution request with the Insurance Tribunal.

Answer 56

Reference: OAS - Study 9 - LO1

The correct answer is: Promptly inform the insured in writing of the reasons the insurer is not liable to pay the claim.

Question 56

Why is the motor vehicle accident claim fund (MVACF) called the payor of last resort?

Select one:

a.
The fund provides compensation when there is no other option for the injured victim.

b.
The fund only provides monies to those that are catastrophically injured.

c.
The fund will not pay out until a judgement has been made confirming there has been an injury.

d.
The fund will not pay out until the victim has exhausted all funds trying to prove their claim.

Question 57

While discussing travel health insurance needs with a client, he mentions that he will be skiing for the first time during this trip. Which coverage limitation should be discussed with him?

Select one:

a.
There are no coverage limitations to discuss because all plans cover all types of sports injuries.

b.
Skiing may be considered a high-risk sports activity and excluded by some insurers. But it may be possible to obtain this coverage for additional premium.

c.
Participating in professional sports is excluded and he will not be covered.

d.
Skiing activities void the policy so there is no benefit to purchasing travel health insurance.

Question 57

Q: Which one of the following is NOT a policy condition found in a Travel Health policy?

Select one:

a.
Benefits are not payable for elective surgery

b.
Travel health policies do not cover medical treatment where the policy is sought specifically to obtain such treatment.

c.
Senior citizens are only eligible for travel health insurance if accompanied by an immediate family member.

d.
Travel health policies do not cover eye glasses or contact lens.

Question 58

For an applicant with pre-existing medical conditions, what does the completed medical questionnaire assist insurers in determining?

Select one:

a.
The stability period for the pre-existing condition and the required premium.

b.
The waiting period for sickness and injury.

c.
The trip length limitation.

d.
The coverage limit for elective treatment the client is travelling to receive.

Question 59

Why do travel health insurers require insureds to contact the third party administrator when experiencing a medical emergency?

Select one:

a.
To reject as many claims as possible

b.
To stabilize the situation and help restore the insured’s health

c.
To explain the limitations to the insured

d.
To pass the claim details to OHIP

Question 59

Q: A number of factors may be involved in determining the premium for travel health insurance. Which one (1) of the following is unlikely to affect the premium?

Select one:

a.
The mode of transportation and the common carrier used?

b.
The length of the trip, including the day of departure and return.

c.
Whether or not the traveler is a smoker.

d.
The medical history of the traveller.

Question 60

Q: An individual who acts or aids in any manner in soliciting, negotiating or procuring the making of any contract of insurance is required to be registered as an insurance broker if he or she

Select one:

a.
Is licensed as an insurance agent, representing a single insurer and a Facility Association

b.
Performs these duties as a favour to a friend who does not understand English.

c.
Deals directly with the public and receives compensation.

d.
Performs these duties on behalf of their employer with respect to the employer’s own insurance program.

Question 61

Q: Following registration as an insurance broker, an individual

Select one:

a.
Is required to report any changes in status only at each renewal of registration.

b.
Is required to ensure that any change in his/her status is included in the next position report filed by his/her employer.

c.
Must confirm, in writing, every three (3) months to RIBO that there has been no change in the information originally filed.

d.
Must notify the Registered Insurance Brokers of Ontario if any information on the original application for registration or renewal has become obsolete, including a change in employer, and file a notice correcting that information within thirty (30) days of the change.

Question 62

Q: Upon successful completion of the examination you may qualify for registration as an insurance broker. If issued, the registration will be “restricted to acting under supervision”. Which one (1) of the following most accurately describes the conditions under which you may act as an insurance broker under supervision?

Select one:

a.
You may solicit insurance inside or outside your office but only in the community where your office is located.

b.
You may operate a trust account in your own name into which you may deposit premiums you receive from policyholders.

c.
You may solicit insurance only from persons who call at, or telephone your office

d.
You may not act as a sole proprietor, nor be a “Principal Broker” as the term is used in the regulation, nor may you control trust funds.

Question 63

Q: An individual is required to register as an insurance broker if he/she _________________________.

Select one:

a.
For compensation provides risk management and loss prevention services on behalf of another.

b.
Acts solely as a reinsurance broker.

c.
Recommends to friends that they purchase from a specific insurer because of the good deal they obtained for insurance.

d.
For remuneration, transacts insurance solely on behalf of one insurer and the Facility Association.

Question 64

Q: An insurance broker whose registration is restricted to acting under supervision may NOT ______________________________.

Select one:

a.
Solicit insurance except in the presence of their supervisor.

b.
Collect premiums on behalf of the insurance broker by whom they are employed.

c.
Sign letters to members of the public recommending insurance coverage.

d.
Deposit insurance premiums in their own trust bank account.

Answer 64

Reference: RIB Act - By-Law 1 Part XV S15.1 Classes of Membership (c)

The correct answer is: Deposit insurance premiums in their own trust bank account.

Question 65

Q: Which of the following is NOT considered misconduct

Select one:

a.
Using an illustration, circulation or memorandum to represent the terms, benefits or advantages of any policy or contract of insurance.

b.
Providing false or misleading information to RIBO.

c.
The payment of any referral fee or finder’s fee to any person who is not a registered insurance broker or licensed to act as a general insurance intermediary.

d.
Failure to carry on business in a manner consistent with the Code of Conduct.

Question 66

Q: You quote your best premium to a prospect who informs you that he already has a better price. You ask the insurer to reduce the price without success. What can you do to gain the business?

Select one:

a.
Invoice the full premium less a new customer discount.

b.
Reduce your quote to match the other broker’s. Invoice your quoted premium rather than the real premium.

c.
Tell your prospect that if they place coverage you will provide them with a refund for the difference.

d.
Sell the customer on the value of dealing with you but advise them that you cannot match the lower price.