Fundamentals of Insurance Practice exam C - Manitoba

What does the term bind a risk mean?

a) Automatically renewing an existing policy

b) Finding a company willing to give a quote on a risk

c) Having authority from the insurer to put insurance in force

d) Getting underwriting information from a client

c) Having authority from the insurer to put insurance in force

The insured is prohibited from driving or operating an automobile in all the following circumstances except one. Pick the exception.

a) While license to drive or operate an automobile is suspended

b) If he is either unauthorized by law or not qualified to drive

c) While under the age of 16 or other age at which a license may be issued to them

d) For the transporting of clients or customers proposing to do business with the insured

d) For the transporting of clients or customers proposing to do business with the insured

Liability policies are covered with matters of civil liability. Civil law addresses the following areas:

a) Criminal law

b) Tort legal liability and contractual liability

c) Legal liability

d) Contractual liability

b) Tort legal liability and contractual liability

The rate on a commercial property insurance policy would not be affected by:

a) The type of construction

b) The type of business and processes involved.

c) Fire protection

d) The length of time applicant has remaining on building lease

d) The length of time applicant has remaining on building lease

All of the following losses to property are excluded under the Homeowners Comprehensive form except one. Pick the exception:

a) Sporting equipment where loss due to use

b) Loss or damage caused by birds, vermin, rodents or insects.

c) Breakage of fragile or brittle articles

d) Smoke from a fireplace

d) Smoke from a fireplace

The Additional Living Expenses coverage as provided under Habitational insurance policies would:

a) Pay those increased costs only for temporary accommodations occupied by the insured after an

insured loss.

b) Pay all costs as incurred by the insured for food, transportation and accommodations occupied by

him after an insured's loss.

c) Pay those increased costs for items such as food, transportation and accommodations, which are

incurred by the insured after an insured loss, so long as such costs do not serve to increase the

insured's standard of living.

d) Pay all mortgage payments, which insured must continue to make after an insured loss.

c) Pay those increased costs for items such as food, transportation and accommodations, which are

incurred by the insured after an insured loss, so long as such costs do not serve to increase the

insured's standard of living.

Our insured stores a vacuum cleaner, a floor polisher and cleaning materials at his business for general maintenance of the building. When determining the values for insurance, should we include the amount for these items under:

a) Building

b) Stock

c) Equipment

d) Cleaning supplies

a) Building

Most workers compensation plans cover the following, except one. Pick the exception.

a) Any necessary health care costs

b) The cost of hiring a recruiter to get new employment

c) Replacement for lost earnings for time missed from work.

d) Death benefits

b) The cost of hiring a recruiter to get new employment

Which of the following is not a major type of liability exposure:

a) Personal liability

b) Fraud liability

c) Automobile liability

d) Professional liability

b) Fraud liability

Where there had been loss or damage to the insured's automobile, and such loss is covered by the policy, the most immediate requirement upon the insured is to:

a) Notify the repair garage.

b) Notify the insurer within 10 days.

c) Protect the automobile from further loss.

d) Take a full written report to his broker

c) Protect the automobile from further loss.

The fire policy includes an extension of coverage for removal. Which of the following statements is true?

a) The insured's property will be insured for an indefinite period if removed to prevent further loss or

damage.

b) The insured's property will be insured for a maximum of 7 days, or expiry of the policy, if removed to

prevent loss of further loss or damage

c) The insured's property is insured only while on his property even if is in danger of loss or further

damage at that location.

d) The insured's property will be insured at a safe location until the damage is repaired even though

the policy expired in 3 days

b) The insured's property will be insured for a maximum of 7 days, or expiry of the policy, if removed to

prevent loss of further loss or damage

A Named perils form would cover which loss:

a) Damage to the carpet resulting from sewer back up.

b) Damage to the walls resulting from an earthquake.

c) Damage to the building resulting from an enemy military bomb.

d) Damage to the building resulting from the furnace backing up, sending smoke through the

building.

d) Damage to the building resulting from the furnace backing up, sending smoke through the

building.

Under a commercial property insurance policy, the following item would not be considered as equipment:

a) Packing and wrapping supplies

b) Portable workstations and wall dividers

c) Microwave located in staff room for employees' use.

d) Office furnishings situated in owner's private office

a) Packing and wrapping supplies

With compulsory government insurance plans, which province has a physical damage coverage as an optional coverage?

a) Quebec

b) Manitoba

c) British Columbia

d) Saskatchewan

c) British Columbia

Negligence is:

a) Failing to do what a reasonable person would do in each situation.

b) Acting prudently, having regard to the circumstances

c) Willfully disobeying the law

d) Aiding and abetting another person to commit a felony

a) Failing to do what a reasonable person would do in each situation.

In addition to the five essential elements to be contained in all contracts, an insurance contract is enforceable only if it contains the following three elements unique to insurance:

a) Insurable interest, indemnity, utmost good faith

b) Insurable interest, consideration, indemnity

c) Insurable interest, utmost good faith, lawful object

d) Insurable interest, indemnity, genuine intention

a) Insurable interest, indemnity, utmost good faith

In automobile insurance, there are additional agreements of the insurance company, of the following, what is excluded?

a) Paying general average where other persons' cars are dumped from a ship to avoid sinking.

b) Paying salvage cost for insured vehicle if damaged

c) Paying fire department charges for automobile fire

d) Paying custom duties on new vehicles purchased in the USA to add to an auto policy

d) Paying custom duties on new vehicles purchased in the USA to add to an auto policy

Which of the following is correct?

a) A condominium unit owner must insure his portion of the common elements of the building.

b) A condominium unit owner owns the space inside his unit, his contents, and any improvements bought or installed by himself.

c) A condominium corporation never owns the land on which the building stands.

d) The condominium agreements make unit owners responsible for caused to common 7 elements.

b) A condominium unit owner owns the space inside his unit, his contents, and any improvements bought or installed by himself.

Materials used for packing are considered:

a) Building

b) Stock

c) Equipment

d) Common Carrier

b) Stock

Statutory conditions found in all policies of fire insurance:

a) Outline the rules of conduct between the insured and the insurer.

b) Specify the coverage provided.

c) State the rights of third parties.

d) Are not expressly required by law

a) Outline the rules of conduct between the insured and the insurer.

All the following elements, except one, are required to be present if the legal liability of our clients is to be proven. Pick the exception.

a) Client owed a duty.

b) Duty breached because of negligence.

c) Negligent actions proximate cause of damages

d) Damages unforeseeable

d) Damages unforeseeable

Every policy of "fire" insurance:

a) Usually covers fire, smoke and specified types of explosions.

b) Is required by law to cover fire, windstorm and lightning.

c) Covers fire, explosion and windstorm.

d) Is required by law to cover at least fire, lightning and specified types of explosions

d) Is required by law to cover at least fire, lightning and specified types of explosions

What does Subrogation mean?

a) The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss.

b) The amount of the insurance company receives from a person who is legally responsible for a loss.

c) That the insurance company takes over the salvage after it has paid the claim in full

d) That the insured has the option of receiving payment for the loss from either the insurer or the person responsible

a) The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss.

There are a number of established legal precedents which will affect our client's legal liability for damage. Generally, our insured will be liable for damages caused in all of the following instances

except one. Pick the exception:

a) Domestic animals

b) Escape of dangerous things

c) Acts of his children of 10 years of age

d) Acts of an employee acting within the scope of his employment

c) Acts of his children of 10 years of age

Our client, a doctor, becomes the tenant of a building formerly occupied by a craft shop. Upon taking possession, he makes several improvement and betterments to the interior in order to suit his own business. We would include the value of such improvements and betterments under the amount of insurance on:

a) Stock

b) Equipment

c) Building

d) Personal Property

b) Equipment

Loss caused by freezing during the usual heating season is covered on habitational insurance policies only if insured fulfills the obligations outlined in the policy. If the insured is away for more than four consecutive days, he must:

a) Advise the insurer that the dwelling will be unoccupied.

b) Obtain written permission from the insurer for continuation of coverage during period of occupancy.

c) Ensure all windows and doors are securely locked and heating maintained.

d) Arrange for a competent person to enter the dwelling daily to ensure heating is being maintained or shut water supply off and drain all the pipes and appliances.

d) Arrange for a competent person to enter the dwelling daily to ensure heating is being maintained or shut water supply off and drain all the pipes and appliances.

Insurance coverage under the terms of the policy of "fire" insurance expires at:

a) 12:01am standard time at the location of the property insurance

b) l2:01pm standard time at the location of the property insured.

c) Twelve months after the broker binds coverage

d) 12:01am standard time at the address of the named insured

d) 12:01am standard time at the address of the named insured

In the contract of insurance, consideration means:

a) The amount the insured can collect in the event of a claim.

b) The object of insurance

c) Something of value

d) The reviewing of the details of the risk to be insured by an underwriter

c) Something of value

Our insured hires an independent contractor to perform renovations to her building. Our insured will be deemed to be liable for the acts of an independent contractor in all of the following instances except one. Pick the exception.

a) Where insured hires and fires the employees of the independent contractor

b) Where insured supplies blueprints and leaves a contractor to his own resources to arrive at the desired results

c) Where insured supplies tools and materials from which damages arose

d) Where insured provides onsite direction and supervision of work

b) Where insured supplies blueprints and leaves a contractor to his own resources to arrive at the desired results

Under the indemnity agreement, the insurer agrees to pay the least of three amounts. Which one is the exception?

a) The amount of the outstanding mortgage

b) The ACV of the property at the time of the loss

c) The interest the insured has in the property at the time of loss.

d) The amount of insurance of the property as stated on the declarations page

a) The amount of the outstanding mortgage

A building worth $360,000 is insured for $90,000 and the policy contains an 80% coinsurance clause. A fire caused $72,000 damage. The insurer will cover.

a) $57,600

b) $22,500

c) $90,000

d) $72,000

b) $22,500

All of the following items of personal property are subject to special limits insurance except one. Pick the exception.

a) Books, tools, and instruments relating to a business, profession or occupation

b) Watercraft, including equipment

c) computer hardware

d) Money

c) computer hardware

An occurrence basis liability policy is broader than a liability policy issued on an accident basis. An occurrence basis policy:

a) Provides coverage only for a sudden and unusual event.

b) Provides coverage for damage caused by continuous and repeated exposure to substantially the same harmful conditions.

c) Provides excess insurance over other existing liability policies.

d) Provides coverage for bodily injury and property damage caused intentionally

b) Provides coverage for damage caused by continuous and repeated exposure to substantially the same harmful conditions.

Insurable interest means:

a) Interest gains on money in the bank

b) Interest payable on loan

c) The personal interest a person has in something he expects to inherit.

d) The financial interest a person has in something of value.

d) The financial interest a person has in something of value.

An insurance contract indemnifies the insured against loss arising out of the happening of the specific event. Which of the following is correct?

a) The event must be a future event, and it must be accidental.

b) The event may happen with the co-operation of the insured.

c) The event may happen with the intent of the insured.

d) All of the above

a) The event must be a future event, and it must be accidental.

Which item is not covered under dwelling on the homeowner's policy?

a) Permanently installed swing set

b) Outdoor swimming pool

c) Storage shed.

d) Building materials on the adjacent premises

c) Storage shed.

If an insured knowingly fails to reveal all material information when applying for insurance, the insurer:

a) Must pay all claims of the insured.

b) Must continue the policy until expiry but may not renew it.

c) May void the policy in respect of the property so affected.

d) May sue the insured for misrepresentation.

c) May void the policy in respect of the property so affected.

Generally, the insuring agreement in policies of liability insurance contains all the following conditions of coverage except one. Pick the exception.

a) Bodily injury or property damage must have been suffered by a third party.

b) The amount of any damages awarded will include separate amount for punitive, exemplary and compensatory damages suffered.

c) The amount of any damages awarded is restricted to those, which are compensatory in nature.

d) The insured must have legally liable for damage

b) The amount of any damages awarded will include separate amount for punitive, exemplary and compensatory damages suffered.

The Reinstatement clause contained in most policies of commercial property insurance provides that:

a) Coverage limits are automatically re-instated after an insured loss.

b) Coverage which is suspended due to the breach of policy conditions, is automatically reinstated when that breach is corrected.

c) Coverage which has been terminated by the insurer, may be re-instated at the request of the insured upon application to the insurer in writing.

d) Property lost or damaged shall be reinstated with equivalent property of like, kind and quality.

a) Coverage limits are automatically re-instated after an insured loss.

In which case will the insured be unable to apply the Replacement Cost Endorsement?

a) Insured decides to rebuild on another piece of real estate.

b) Rebuilding is going to take longer than expected because contractor is behind schedule.

c) Insured has already begun to replace the property.

d) Insured is rebuilding on the same site using due diligence and dispatch.

a) Insured decides to rebuild on another piece of real estate.

Under the homeowner's policy, windstorm will cover only one of the following:

a) Damage to outside porch due to weigh of melting ice or snow

b) Damage caused by a leaking roof.

c) Damage caused by rain pouring into open window.

d) Damage to storm door when wind blew it off the hinges.

d) Damage to storm door when wind blew it off the hinges.

Indemnify means:

a) Returning the premium of the insured

b) Restoring the insured to the same financial position as he was in immediately prior to the loss.

c) Paying the insured the face amount of the policy.

d) Restoring the insured to the same financial position as he was in at the inception date of the policy.

b) Restoring the insured to the same financial position as he was in immediately prior to the loss.

There is a difference between the legal owner and the registered owner. Choose the answer that best matches the registered owner:

a) They have the right of possession and can choose to sell the vehicle or make any insurance decisions.

b) They have the right of possession; they cannot sell the vehicle, nor can they make any insurance decisions.

c) They have the right of possession, they cannot sell the vehicle, but they can make insurance decisions.

d) They have no right of possession.

c) They have the right of possession, they cannot sell the vehicle, but they can make insurance decisions.

Which of the following is not covered under the supplementary payments section of a liability policy?

a) Defense of the insured against claims and suites for negligence

b) Expenses to help with the defense.

c) Interest on the insured portion of the judgement

d) The amount of the actual judgment

d) The amount of the actual judgment

Under a policy of insurance, a deductible is generally:

a) Payable by the insured only if he is responsible for the loss

b) Payable by the insured only where the insurer disputes the amount of its liability for the loss

c) Payable by the insured in all situations where the insured peril has an applicable deductible

d) The responsibility of the broker

c) Payable by the insured in all situations where the insured peril has an applicable deductible

In which of the following cases is it necessary for the insurer to give consent for a Change of Interest?

a) When an insured sells his house, and the new owner wants to continue the policy.

b) When the Executor takes over after the death of the insured

c) When there has been an authorized assignment under the Bankruptcy Act

d) An insured becomes insane, and an administrator takes over his affairs.

a) When an insured sells his house, and the new owner wants to continue the policy.

A Broker's license may be revoked if:

a) He is found guilty of impaired driving.

b) She does not hold a professional designation within 5 years.

c) He is guilty of fraud.

d) She is out of the province for more than six consecutive months.

c) He is guilty of fraud.

A comprehensive personal liability policy protects against claims for the bodily injury and property damage arising out of:

a) Personal acts of insured, carelessness of insured's children and ownership of certain type of boats and motorized vehicles

b) Personal acts of the insured, carelessness of insureds and default in payment of debts

c) Personal acts of the insured ownership of certain boats and ownership of automobiles

d) Personal acts of the insured, poor upkeep of the insured's dwelling and ice on the steps of the insured's premises.

a) Personal acts of insured, carelessness of insured's children and ownership of certain type of boats and motorized vehicles

Under a homeowner's form, outdoor trees, shrubs and plants are insured for:

a) Maximum of 10% of the amount of insurance on the dwelling

b) Building amount

c) Maximum 20% of the amount of insurance on dwelling

d) Maximum amount of $500 per tree, shrub, or plant

d) Maximum amount of $500 per tree, shrub, or plant

The major function of insurance is:

a) To reduce the cost of losses

b) To serve as the basis of the existing credit system

c) To spread the loss of the few among the many

d) To safeguard mortgage investments

c) To spread the loss of the few among the many

The statutory conditions provide that the insured must promptly notify the insurer of any material change. A material change is one which:

a) Results in damage to goods caused by the undergoing of a process involving the application of heat.

b) Due to a by-law change, provides use of materials superior to those that exists at the time the insurance policy was purchased.

c) Has led to damage to buildings of contents caused by alterations or additions.

d) Introduces a new feature, which increases the chance of loss.

d) Introduces a new feature, which increases the chance of loss.

Under the indemnity agreement of the fire policy, it states it will pay the lesser of three amounts in the event of a claim. One factor which does NOT enter this calculation is:

a) The actual cash value of the property

b) The original cost of the property

c) The insured's interest in the property

d) The policy limit

b) The original cost of the property

The voluntary property damage section of a homeowner's liability of comprehensive personal liability excludes damage caused intentionally by an insured over the age of:

a) 12 years

b) 18 years

c) 21 years

d) Majority, as determined in province in which insured resides

a) 12 years

Which water loss will be covered by a homeowner's policy?

a) Insured left bathtub faucet running.

b) Water seeped through basement walls in low lying areas.

c) Pipe burst from freezing while insured were on one week vacation in Mexico.

d) Sewer backup in basement

a) Insured left bathtub faucet running.

Co-insurance clause is designed to:

a) Prevent the change of a total loss.

b) Transfer part of the risk to another insurer

c) Discourage the insured from gambling on suffering only a partial loss.

d) Penalize the insured in the event of over insurance.

c) Discourage the insured from gambling on suffering only a partial loss.

Third party liability coverage in automobile policies excludes:

a) Liability imposed by any workers compensation laws.

b) Damages caused to another vehicle.

c) Bodily injury or property damage caused to a third party while traveling outside of Manitoba.

d) Damages caused to the Neighbour's fence as a result of an accidental collision.

a) Liability imposed by any workers compensation laws.

Which of the following would be the correct name of the insured in the contract of insurance?

a) The corner store

b) John Doe trading as The Corner Store

c) J. D's Corner Store

d) The directors and Stockholders of the Corner Store Ltd

d) The directors and Stockholders of the Corner Store Ltd

Our insured's children are actively involved in the sport of water polo. Our insured's regularly attend out of town competitions with their children, often staying in a hotel for a number of days. The Comprehensive Personal Liability Policy insures their liability for damage to the room they occupy arising out of the following losses:

a) Fire

b) Fire, lightning and specified types of explosions.

c) AII risks

d) Fire, explosion, smoke and water escape.

d) Fire, explosion, smoke and water escape.

Standard exclusions to a fire policy included:

a) War and hostilities, whether or not war is declared.

b) Lightning damage to electrical devices or appliances

c) Application of heat

d) All of the above

d) All of the above

Under the policy of fire insurance, the insurer must make payment for loss within:

a) 60 days after completion of the proof of loss

b) 90 days after completion of the proof of loss

c) 60 days after completion of the proof of loss unless the contract provides a shorter period.

d) 1 year from the date of the loss occurred.

c) 60 days after completion of the proof of loss unless the contract provides a shorter period.

Which of the following statements is true when a standard mortgage clause is attached to the policy?

a) The insurer could be called upon to pay a loss to the mortgage, even though the insured violated a policy condition.

b) The mortgage is not required to advise the insurer of any material change in the risk known to him.

c) The insurer may cancel the policy at any time by providing the mortgage with seven days' notice of cancellation by registered mail.

d) Neither the insured nor the insurer may cancel the policy until the mortgage has been paid off

a) The insurer could be called upon to pay a loss to the mortgage, even though the insured violated a policy condition.

Loss or damage caused by freezing is automatically covered where the insured has not been away from the premises for more than:

a) 1 Day

b) 2 Days

c) 3 Days

d) 4 Days

d) 4 Days

With respect to federally licensed insurance companies, the Federal Department of Insurance:

a) Controls the type of policies issued.

b) Regulates the financial stability of insurers.

c) Stipulates the types of agents who may represent the company.

d) Only supervises life insurance companies.

b) Regulates the financial stability of insurers.

Our insured has a commercial property insurance policy to which a replacement cost endorsement is attached. To qualify for settlement on a replacement cost basis, this endorsement requires that all of the following obligations, except one, be complied with by the insured, Pick the exception:

a) Replacement shall be affected by insured with due diligence and dispatch.

b) Replacement shall be on the same site or an adjacent site.

c) Replacement shall commence within 45 days of insurer agreeing to pay the loss.

d) Payment of the loss on the replacement cost basis shall be provided only after the insured has stated to replace the property.

c) Replacement shall commence within 45 days of insurer agreeing to pay the loss.

A physical hazard is:

a) A type of peril

b) The same as a moral hazard

c) A physical feature of a risk, which may give rise to a loss.

d) The possibility of a loss due to the character of the insured

c) A physical feature of a risk, which may give rise to a loss.

In marine law, a ship's captain is entitled to use all reasonable means to ensure the safety of the venture. The captain may be required to put automobiles overboard. What principle best describes this?

a) Salvage

b) Subrogation

c) Indemnity

d) General Average

d) General Average

Our insured has made application for Appraisal. The intent of the Appraisal process is to settle the dispute between our insured and the insurer regarding:

a) The amount of settlement being offered.

b) Denial of insurance coverage under the policy

c) Right of insured to purchase salvage from an insured loss.

d) The premium charged for coverage being provided by the Insured.

a) The amount of settlement being offered.

Certain activities have been determined by legislation to create liability without regard to fault. This is referred to as the principle of Strict Liability. From the list below, when would someone be held strictly liable?

a) Man is burning leaves in his yard and the fire ends up burning down their Neighbour's house.

b) Damage arising out of a business activity.

c) Client sticks their foot out in a mall, and a senior trips on it and breaks their arm.

d) Client deliberately injuries another person

a) Man is burning leaves in his yard and the fire ends up burning down their Neighbour's house.

Organizations like RISO, 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:

a) Statutory Conduct

b) Compliance requirements

c) Ethical statue

d) Code of conduct or code of ethics

d) Code of conduct or code of ethics

Which of the following will not be covered by the comprehensive homeowner's policy?

a) Carpet is worn out from years of use.

b) Flood damage

c) Structural damage caused by earth settling.

d) All of the above

c) Structural damage caused by earth settling.

If your client does not advise the insurer of his previous losses when required to do so, he has violated an essential principle of insurance contracts. This principle is:

a) Legality of object

b) Utmost good faith

c) Insurable interest

d) Indemnity

b) Utmost good faith

In simple terms, ethics relates to:

a) One's legal duty to others.

b) One's moral duty to others.

c) The requirement to be licensed in every province.

d) The requirement to complete a professional

b) One's moral duty to others.

The basic principle behind business interruption insurance is:

a) To restore the building to the condition that was in before the loss.

b) To find a place for the employees to work during the period that the business is out of operation.

c) To restore the income that would have been earned if the business had not been interrupted.

d) To maintain a higher level of operation during the period of repaid than existed prior to the loss.

c) To restore the income that would have been earned if the business had not been interrupted.

Which of the following statements is true with respect to a boiler and machinery policy?

a) Damage to the insured's dwelling is excluded.

b) The insured can purchase inspection service for an additional premium.

c) The insurer may suspend insurance at any time if the equipment is unsafe.

d) Business interruption and bylaws coverage are automatically included.

c) The insurer may suspend insurance at any time if the equipment is unsafe.

A peril is best defined as:

a) The chance of a loss

b) The occurrence of a loss

c) The cause off loss

d) The result of a loss

c) The cause off loss

The rate on which the base rate is set is determined by all but which one?

a) The type of construction

b) The credit rating of the insured

c) The claims history of similar types of risk

d) The type of fire protection in the area

b) The credit rating of the insured

The Standard Application Form (SAF #1) is used when?

a) Once the policy has been issued, it is issued on the SAF #1

b) Any policy change is issued as a SAF #1

c) The SAF #1 is only used to apply for auto insurance in private auto provinces.

d) There is no use of the SAF #1 in auto insurance.

c) The SAF #1 is only used to apply for auto insurance in private auto provinces.

The following is the most practical way in which to deal with risk:

a) Avoidance of Risk

b) Retention of Risk

c) Transfer of Risk

d) Controlling of Risk

c) Transfer of Risk

A building worth $200,000 is insured for $125,000 and the policy contains an 80% coinsurance clause. A fire causes the total building to be destroyed. The insurer will cover:

a) $97,662.50

b) $78,125

c) $100,000

d) $125,000

d) $125,000

Under the terms, of the fire policy, property which is necessarily removed to prevent further loss or damage is specified as being covered at the new location:

a) For seven days or until the policy expires if this is less than seven days

b) For seven days but only if the removal permit is attached

c) For a reasonable time

d) Until the original location is repaired

a) For seven days or until the policy expires if this is less than seven days

There are very few exclusions to coverage provided by a Glass Insurance Policy. Three common exclusions are:

a) Smoke, fire and nuclear energy hazard.

b) Fire, windstorm, nuclear energy hazard.

c) Fire, windstorm and war.

d) Fire, war and nuclear energy hazard.

d) Fire, war and nuclear energy hazard.

Insurance is:

a) Paying a sum of money or other thing of value upon the happening of a certain event

b) A piece of paper, which is necessary for an individual to show that he can pay a loss.

c) An undertaking by one party to indemnify another part against loss or liability against a certain risk or peril.

d) Both A & C

d) Both A & C

Where the insurer opts to repair, rebuild or replace damage property rather than make payment in the form of a cash settlement they must:

a) First provide the insured with the option of accepting or rejecting the proposed basis of settlement

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

c) Seek the consent of the insured's mortgage.

d) Advise the insured's broker or agent of its decision.

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

Joe suffers the loss of a steak because of a fire, which fortunately, was confined in his barbeque. Such Loss to the steak is a result of a:

a) Direct fire

b) Indirect fire

c) Hostile fire

d) Friendly fire

d) Friendly fire

Under a policy of fire insurance, which one of the following losses is covered:

a) Fire damage caused by a fire, which followed a short circuit.

b) Loss caused by enemy attach by Armed Forces

c) Radioactive Contamination

d) None of the above

a) Fire damage caused by a fire, which followed a short circuit.

The following are factors that will affect the rate of a travel insurance, except one. Pick the exception:

a) Number of Trips

b) Area of travel

c) Age of the individual

d) Vender of the individual

d) Vender of the individual

The actual cash value is:

a) The replacement cost at the time of the loss without depreciation

b) The replacement cost at the time of loss less depreciation

c) The original cost of the item

d) The sentimental value of the item

b) The replacement cost at the time of loss less depreciation

Safe burglary insurance covers all the following losses, except one. Pick the exception:

a) Damage to premises resulting from a safe burglary.

b) Damage to contents of safe, which was blasted open.

c) Theft of money from a locked safe, which has been opened by someone who knew the combinations.

d) Removal of the entire safe and its contents

c) Theft of money from a locked safe, which has been opened by someone who knew the combinations

The responsibility for licensing insurance brokers and supervising of insurance contracts rest with:

a) The insurance companies

b) Provincial governments

c) Federal governments

d) Municipal governments

b) Provincial governments

An Extra Expense policy:

a) ls the same as a gross earnings form

b) ls a simple, inexpensive policy used for small risks.

c) Provides income after a loss for small business.

d) Pays additional expenses needed to keep a business going during the period of restoration after a loss.

c) Provides income after a loss for small business.

Under Entry, Control and Abandonment Clause, the insured has the right to:

a) Prevent the insurance company from entering the property until he sets the appointment.

b) Give the insurer full control of the property.

c) Abandon the property so he can dispose of it.

d) None of the Above

c) Abandon the property so he can dispose of it.

Pick the best example of a physical hazard:

a) The owner has a large mortgage which he cannot repay.

b) The bartended continues to pour drinks for the patron, even though the patron is unquestionably intoxicated.

c) The steps in the store are in disrepair.

d) The owner leaves the safe unlocked because he cannot always remember the combination.

c) The steps in the store are in disrepair.

Under a fire policy, the following property would NOT be excluded:

a) A farm tractor and Canadian Savings Bond

b) A deed to the property and a canoe

c) A frame building and its contents.

d) $50 in cash and a 1985 Pontiac Firebird

c) A frame building and its contents.

If an architect's drawings are destroyed in a fire, the cost of redrafting them would be covered by:

a) Electronic Data Processing Policy (EDP)

b) Valuable papers and records policy

c) Broad form policy

d) Accounts receivable policy

b) Valuable papers and records policy

Our insured recently purchased a Homeowners Comprehensive form, which she was told, covered her property for All Risks of physical loss or damage. Last week, her home set fire and $30,000 in jewelry was lost in the fire. Her insurer would pay:

a) $30,000

b) $2,000

c) $5,000

d) Fifty percent immediately and the remaining 50% upon replacement of the jewelry

a) $30,000

The Earnings Form of Business interruption coverage:

a) Commences at time of the loss and ceases once the premises have been physically rehabilitated.

b) Commence at the time of the loss and continue to provide coverage until such time as turnover has been restored to level it would have been if the loss had not occurred.

c) Included loss of profit due to damage to finished stock.

d) Limit the period of indemnity to correspond with the term of the policy.

a) Commences at time of the loss and ceases once the premises have been physically rehabilitated.

Accident benefits coverage is compulsory in most Canadian provinces, this coverage is made available:

a) To every insured who is injured in an automobile accident without regard to fault

b) To every insured who is injured in an automobile accident subject to proof of legal liability if they are the party causing the loss

c) Only where the party causing the loss is both uninsured and unidentified.

d) To ensure all physical damage to the insured automobile arising out of a single accident

a) To every insured who is injured in an automobile accident without regard to fault

There are three degrees of care which can be owed to individuals on your premises. What is the name given to guests?

a) Trespasser

b) Amigo

c) Invitee

d) Licensee

d) Licensee

A disability is a physical or mental inability to work. People can be disabled due to:

a) Accidents

b) Sickness

c) Both A& B

d) Neither A nor B

c) Both A& B

From the situations below, when would an umbrella liability policy not pay out a claim?

a) There is not enough insurance under the primary policy.

b) There is no coverage under the primary policy.

c) The client does not have a primary policy.

d) The umbrella policy will pay out in all the above situations

c) The client does not have a primary policy.