FOI Final Exam Review (Practice)

The majority of insurance business in Canada is transacted by:

private insurers (ch. 1)

General Insurance involves all of the following types of insurance, except one. Pick the exception.

life insurance

(property, automobile, liability)

(ch. 1)

The definition of Insurance is found;

in the Insurance Act of each province

(ch.1)

The amount of indemnity is determined by the value of the insured property;

immediately prior to the loss

(ch.1)

Brokerage owners are;

self-employed

(ch.1)

Which of the following is not an example of a private insurer

manitoba public insurance

(intact, portage, wawanesa)

(ch.1)

When one of the eight elements of an insurance contract are not present, the contract may be;

void or voidable

(ch.2)

Insurance companies use all of the following documents to make changes in the insurance contract, except one. Pick the exception.

telephone change log

(endorsement or rider, floater)

(ch.2)

Risks people face fall into one of the following categories, except one. Pick the exception.

financial risk

(personal, liability, property)

(ch.2)

None of the following people have the legal capacity to contract, except one. Pick the exception.

seniors

(minors, mental incompetents, persons under the influence of alcohol)

(ch.2)

Which of the following entities have the legal capacity to contract.

McDonald's Landscaping Ltd.

(ch.2)

Which of the following is the recommended form of dealing with risk.

transfer

(retention, avoidance, controlling)

(ch.2)

Agency Agreements are between

the insurer and the broker

(ch.2)

The Removal Clause contains all of the following conditions, except one. Pick the exception.

only the peril of fire will be insured at the new location

(the property must be removed to prevent damage or further damage thereto, the coverage at the new location will be in effect for 7 days or the unexpired team of the policy, whichever is less, the amount of coverage at the new location will be reduced by the amount used at the named location)

(ch.3)

Only the following person(s) have the authority to change the policy.

an officer of the insurance company

(ch.3)

The following three coverages are required on every policy insuring loss by fire.

fire, lightning, explosion of natural, coal or manufactured gas

(ch.3)

When an insurer terminates a policy all of the following conditions must be followed, except one, for the termination to be valid.

the refund must be calculated on a short rate basis

(15 days notice termination by registered letter must be provided to the insured, the 15 days notice begins on the day following it is received at the post office to which it was addressed, the refund must accompany the notice)

(ch.3)

If title of the insured property changes, the new party of interest is automatically covered in all of the following circumstances, except one. Pick the exception.

sale

(death, operation of law, succession)

(ch.3)

A person who handles another person's money is called a(n)

fiduciary

(ch.3)

The following are examples of a friendly fire, except one. Pick the exception.

spark from a wood fireplace

(burning steaks on a BBQ, wood burning in a fireplace, garbage being burnt in a fireplace)

(ch.3)

A fire policy contains the following exclusions, except one. Pick the exception.

resultant damage to home from lightning damage to electrical devices or appliances

(application of heat, contamination by radioactive material, lightning damage to electrical devices or appliances)

(ch.3)

Which of the following is not an example of a Statutory Condition

pair and set

(material change, notice, replacement)

(ch.3)

An insured's perception of the brokerage services will be influenced by the way a claim is handled. It is important the broker;

develop a system which will monitor the progress of the claim

(ch.4)

The law requires that insurance brokers;

exercise reasonable care, skill, and diligence

(ch.4)

An insurance broker is;

not a party to the contract

(ch.4)

All of the following are examples of conditions which affect the physical hazards of a risk, except one. Pick the exception.

financial condition

(building construction, housekeeping, occupancy)

(ch.4)

Independent adjusters;

are hired by insurers because of their special expertise in a particular area of a loss

(ch.4)

All of the following, except one, are factors considered in the indemnity agreement. Pick the exception.

the purchase price of the property

(the amount of insurance on the property, the interest of the insured in the property, the actual cash value of the property)

(ch.5)

Who of the following is an employee of the insurance company.

underwriter

(ch.4)

An underwriter performs all of the following duties, except one. Pick the exception.

calls the client

(ch.4)

Which of the following factors will be considered when determining the amount of depreciation to be used in the determination of actual cash value.

normal life expectancy

(purchase price, sentimental value, accrued accounting depreciation)

(ch.5)

If the insured fails to comply with all of the conditions of the replacement cost endorsement, the loss will;

revert to an actual cash value settlement

(ch.5)

If the insured breaches a policy condition, the Standard Mortgage Clause guarantees the mortgagee will be paid;

their interest in the property

(ch.5)

The Standard Mortgage Clause guarantees the mortgagee that the insurer;

will not change the policy to the disadvantage of the mortgagee unless proper notice is provided

(ch.5)

Which of the following would not be considered included in the definition of dwelling.

patio furniture

(construction materials to be used in renovations to the kitchen, attached carport, inground swimming pool)

(ch.6)

The following are examples of direct damage losses, except one. Pick the exception.

loss of food in freezer when electrical motor is damaged by a lightning strike

(water damage from firefighters when putting out a chimney fire, water damage from sprinkler system from explosion, smoke damage by overcooking food in oven)

(ch.5)

Outdoor trees, shrubs and plants are insured for all of the following perils, except one. Pick the exception.

windstorm

(theft, riot, lightning)

(ch.6)

the Insuring Agreement for Personal Property includes coverage for

watercraft

(trailers, automobiles, aircraft)

(ch.6)

Consequential Loss Coverage would provide coverage for food spoilage from;

the deep freeze breaking down

(ch.6)

The damage caused by a "Falling Object" will only be insured if the Falling Object;

strikes the exterior of the building

(ch.6)

The definition of you or your includes the following, except one. Pick the exception.

22 year old exchange student

(grandparents who live with the insured, common-law couple living together for 16 months with a child, his or her husband or wife)

(ch.6)

IBC's Homeowners forms include all of the following except one. Pick the exception.

Homeowners Named Perils form IBC 1150

(1151, 1153, 1155)

(ch.6)

Which of the following coverage limits correct?

Detached Private structures - 10% of dwelling

(ch.6)

A Single Limit Habitational policy is the total of

Coverages A,B,C,D

(ch.6)

Coverages for Condominium Policies have included the following unique coverages, except one. Pick the exception.

Common element assessment

(ch.6)

The limit of insurance on building would include:

The value of perimeter fencing

(ch.7)

The Debris Removal Clause will;

Pay for the removal of debris blown by windstorm onto the insured's premises

(ch.7)

The Reinstatement Clause;

reinstates the limit of insurance after a loss

(ch.7)

The Property Protection Systems Clause requires the insured to report any flaw, defect, or interruption, coming to the knowledge of the insured of all of the following systems, except one. Pick the exception.

electrical system

(intrusion detection, fire detection, sprinkler)

(ch.7)

A Co-Insurance clause;

is used to penalize insureds who do not insure to the proper value

(ch.7)

A Commercial Named Perils form covers

losses which are specifically covered on a policy

(ch.7)

Private Protection includes the following, except one. Pick the exception.

fire hydrants

(fire detection, sprinkler, fire extinguishers)

(ch.7)

Which of the following is not included as equipment on a commercial policy?

business cards

(tenants improvements to the building, fax machines, boardroom table)

(ch.7)

Which of the following statements is not true?

burglary insurance will pay even if there is no evidence of force to take the property

(theft is the broadest coverage available, robbery insurance is usually purchased to cover loss of money, securities, and other valuable property, safe burglary must have visible signs of force used to take the property)

(ch.7)

An Installation Floater covers property at all of the following locations, except one. Pick the exception.

while waiting to be picked up at the warehouse

(during installation until accepted, or the interest of the insured ceases, while in transit to the job site, while awaiting installation at the job site)

(ch.7)

The occupier of a property owes no legal duty to a trespasser. However, the occupier may be liable for any injuries caused if he does any of the following, except one. Pick the exception.

fails to point out unusual dangers on the property

(set traps to capture or injure a trespasser, intentionally cause harm to the trespasser, set traps to capture the trespasser)

(ch.8)

All of the following describe what Business Interruption Insurance does, except one. Pick the exception.

insures the majority of perils insurance by the Property Policy

(pay expenses when they reduce amount of loss, A contract of indemnity, coverage not limited to policy period)

(ch.7)

All of the following would fall into the classification of licensee, except one. Pick the exception.

customers

(hunters, meter readers, snowmobilers)

(ch.8)

The occupier of a property has the following duty to an invitee:

make the premises safe for the invitee's use

(ch.8)

This group of people are owed the highest duty of care.

children

(invitee, trespasser, licensee)

(ch.8)

British Columbia, Alberta, Ontario and Nova Scotia have enacted Occupier's Liability Acts which amend the common law term of licensee and invitee to this general term.

visitors

(ch.8)

law deals with written law

statute law

(ch.8)

Which of the following is not an element of a tort.

damages awarded

(duty breached, damages suffered, duty owed)

(ch.8)

Liability policies include Supplementary Payments. These payments

are provided in addition to other coverage limits

(ch.9)

The Liability Policy is limited to the payment of

compensatory damages

(ch.9)

An occurrence means;

an accident, including continuous or repeated exposure to substantially the same general harmful conditions

(ch.9)

Bodily Injury means;

bodily injury, sickness, disease, or death

(ch.9)

All of the following are included in the Supplementary payments except one. Pick the exception.

the amount of the settlement

(costs of defense, court costs, interest from the date of judgement)

(ch.9)

In the event of an Occurrence, Claim, or Action, the insured must not do which of the following

provide assistance other than for first aid

(ch.9)

Examples of Personal Injury claims include all of the following, except one. Pick the exception.

sickness

(wrongful entry, libel, slander)

(ch.10)

Motorized golf carts are insured when:

while in use on a golf course

(ch.10)

All of the following activities are insured under the Liability coverage's provided on a homeowners policy, except one. Pick the exception.

your work as a sales clerk in a department store

(your work as a mechanic, rental of your garage - up to 3 car spaces, the occasional rental of your residence)

(ch.10)

These are the four Insuring Agreements provided in Section II of a Homeowners Form

Personal Liability, Voluntary Medical Payments, Voluntary Payment for Damage to Property, Voluntary Compensation for Residence Employees

(ch.10)

Coverage is provided for all of the following losses on a Homeowners Form, except one. Pick the exception.

bodily injury to the insured after slipping on his driveway

(drowning of a neighbor's child in the insured's pool, Injury to a postal employee caused by the insured's dog, fire damage to a neighbor's house from sparks from an outdoor BBQ pit)

(ch.10)

Which of the following is not covered by Voluntary Medical Payments.

pain and suffering payments

(surgical payments, ambulance service, dental payments)

(ch.10)

Which of the following types of watercraft are not covered for bodily injury or personal damage?

watercraft with an outboard motor of no more than 20hp

(watercraft with an inboard motor of no more than 16hp, watercraft with any other motor (other than outboard and inboard) of not more than 50hp, non-motorized watercraft with no more than 17ft in length)

(ch.10)

Which professional is not included in Errors and Omissions Insurance?

pharmacists

(insurance brokers, accountants, architects)

(ch.10)

All of the following will directly affect claim costs, except one. Pick the exception.

age of applicants dependents

(sex, occupation, age)

(ch.11)

Some group insurance plans provide all of the following coverage options, except one. Pick the exception.

road side assistance

(extended health care, dental plan, accidental death and dismemberment)

(ch.11)

Most workers' compensation plans will provide the following coverage

death benefits

(preventative dental plan, coverage for prescription drugs, suicide benefits)

(ch.11)

Most accidents occur away from work. The percentage most closely represents the number of accidents which are non work related.

90%

(ch.11)

Factors that affect the premium of insurance include all of the following except

consumer price index

(applicants personal information, type of benefits requested, type of policy)

(ch.11)

In general;

the longer the elimination period the lower the premium

(ch.11)

One form of compensation under the Personal Injury Protection Plan is income replacement indemnity. Identify the correct waiting period under this benefit.

7 days

(ch.12)

To ensure your Third Party Liability is valid, the insured must follow the conditions of the policy. There are certain situations where coverage will not be afforded. Identify the situation below where coverage would not be provided.

the individual driving was not qualified or allowed by law to drive (an unlicensed driver)

(ch.12)

Under the Autopac Program there are some Additional Agreements that have been agreed to by the insurer. Identify the correct statement regarding custom duties.

The insurer must pay the duty on all repairs made to the vehicle while out of Canada or the United States when the vehicle is involved in an accident

(ch.12)

All Perils coverage is a mandatory component of Manitoba's Autopac program. Identify the property that would not be insured by this coverage.

the insured's personal belongings stolen from a vehicle

(a permanently attached machinery to an automobile, an automobile, A CD player permanently attached to the vehicle)

(ch.12)

Third Party Liability coverage excludes;

liability imposed by any workers compensation law

(damages caused to the neighbors fence as a result of an accidental collision, damages caused to another vehicle, bodily injury to property damage caused to a third party while traveling outside of Manitoba)

(ch.12)

All of the following statements are true about the Registered Owner of vehicle, except one. Pick the exception.

the registered owner's driving record does not influence the insurance rates. The insurance rates are determined by the driving record of the actual owner.

(the registered owner can also be the actual owner, if the registered owner is not the actual owner, he or she can not sell the vehicle, the registered owner is the one who keeps, looks after and controls the vehicle)

(ch.12)

There are 3 ways to provide automobile insurance. Which form is not correct?

100% at fault insurance plans

(private insurers, no fault insurance plans, compulsory government insurance plans)

(ch.12)

Which is not a document used by MPI to receive when insuring a vehicle under Autopac?

RST

(TOD, COI, NVIS)

(ch.12)

There are 4 premium rating factors used to determine the amount of insurance. Which is incorrect?

age of the registered owner

(vehicle use, where the insured lives, type of vehicle being registered)

(ch.12)

Which coverage is not provided by a Rental Car Policy?

legal liability for damage to owned autos

(third party liability, loss of use to lessors, loss of use to lessees)

(ch.12)

Under he Off Road Vehicle Act, Accident Benefits provide coverage for the following, except one. Pick the exception.

the off road vehicle

(medical, death, and funeral expenses)

(ch.12)

A broker's license may be revoked if;

he/she is found guilty of fraud

(he/she is out of the province for more than six consecutive months, he/she is found guilty of impaired driving, he/she does not hold a professional designation within 5 years)

(ch.15)

Organizations like RIBO, Insurance Councils and provincial insurance broker associations have established ethical standards which go beyond those described in the Insurance Act. When incorporated into written form, they are referred to as:

code of conduct or code of ethics

(ch.15)

When a broker knows he does not have the competence to properly serve a client, the broker should:

refer this customer to a broker with the required competence

(ch.15)

Brokers must be candid and honest when providing clients with insurance advice. All of the following are examples of conduct which do not meet this standard, except one. Pick the exception.

being careful and precise when discussing the exclusions found in the policy

(failing to advise clients of warranties on the policy, misleading the client as to the reason for re-marketing their account, giving bold statements such as everything is covered)

(ch.15)

Which of the following is an example of providing quality service?

failure to provide compensation for uninsured claim

(failing to return telephone calls or emails, failing to give sufficient notice of non-renewal, failure to inform clients of alterations to coverages)

(ch.15)

In simple terms, ethics relates to:

one's moral duty to others

(the requirement to complete a professional designation, the requirement to be licensed in every province, one's legal duty to others)

(ch.15)