MAIN PRACTICE 2 Flashcards
(137 cards)
1
Q
1.All of the following details are required to be shown on an application for Automobile Insurance, except one. Choose the exception.
• The previous registered owner of the vehicle
• License, insurance and loss history
• Particulars of the insured automobile, including registered owner
• Territory in which the described automobile will chiefly be used
A
The previous registered owner of the vehicle
2
Q
2.Statutory conditions found in all policies of “fire” insurance:
• State the rights of third parties
• Are required by law
• Outline the rules of conduct between the Insured and the Insurer
• Specify the coverage’s provided
A
Outline the rules of conduct between the Insured and the Insurer
3
Q
3.In a contact of Insurance, “consideration” means:
• Not essential to a binding contract
• The amount the broker collects when a quote is completed
• The reviewing of the details of the risk to be insured by an underwriter
• A sum of money or another thing of value being paid for the article or contract
A
A sum of money or another thing of value being paid for the article or contract
4
Q
4.Under a policy of insurance, a “deductible” is generally:
• Payable by the Insured only if he is responsible for the loss
• Payable by the Insured only where the Insurer disputes the amount of its liability for the loss
• Payable by the Insured in all situations where the insured peril has an applicable deductible
• The responsibility of the broker
A
• Payable by the Insured in all situations where the insured peril has an applicable deductible
5
Q
5.Supplementary Payments: Additional expenses incurred by insurers and insureds in investigating, settling and defending a claim are provided under a separate Insuring Agreement entitled Supplementary Payments. The costs insured by this Agreement include;
• Costs of defense; reasonable expenses incurred by the insured at the insurer’s request to assist in the investigation and defence of the claim; court costs assessed against the insured; interest from the date the judgment was rendered but only on the amount which is within the insurers limit of liability
• Cost of defense, reasonable expenses to assist in investigation at the insurers request, and required to assist in the investigation and defense of the claim
• Cost of defense, reasonable expenses incurred to assist in the investigation at the insurers request, interest from the date of the judgement rendered only on the limit that exceeds the applicable liability limit in the province
• All of the above
A
All of the above
6
Q
Insurable Interest” means:
• The interest payable on a loan
• The financial interest a person has in something of value
• The personal interest a person has in something he expects to inherit
• The financial interest a person will have in something of value
A
The financial interest a person has in something of value
7
Q
7.Section E of any Habitational policy protects against claims of BI or PD arising from:
• Personal acts of the Insured, carelessness of Insured’s children and default in payment of debts
• Personal acts of the Insured, poor up-keep of Insured’s dwelling and ice on the steps of the Insured’s business premises
• Personal acts of the Insured, carelessness of Insured’s children and ownership of certain boats
• Personal acts of the Insured, ownership of certain boats and ownership of automobiles
A
Personal acts of the Insured, ownership of certain boats and ownership of automobiles
8
Q
.Section E of any Habitational policy protects against claims of BI or PD arising from:
• Personal acts of the Insured, carelessness of Insured’s children and default in payment of debts
• Personal acts of the Insured, poor up-keep of Insured’s dwelling and ice on the steps of the Insured’s business premises
• Personal acts of the Insured, carelessness of Insured’s children and ownership of certain boats
• Personal acts of the Insured, ownership of certain boats and ownership of automobiles
A
• Personal acts of the Insured, ownership of certain boats and ownership of automobiles
9
Q
8.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. Choose the exception.
• Where Insured supplies tools and materials from which damages arose
• Where Insured hires and fires persons doing the work
• Where Insured supplies “blue prints” and leaves contactor to his own resources to arrive at the desired results
• Where Insured provides on-site direction and supervision of work
A
Where Insured supplies “blue prints” and leaves contactor to his own resources to arrive at the desired results
10
Q
9.Personal property on all Homeowners’ Forms is insured:
• Anywhere in North America excluding Mexico
• Only at the location described on the Coverage Summary page
• Anywhere in Canada, Mexico or the continental United States of America
• Anywhere
A
• Anywhere
11
Q
10.Which of the following statements is true when a Standard Mortgage clause is attached to a policy?
• The Insurer may cancel the policy at any time by providing the mortgagee within fifteen days notice of cancellation by registered mail from Insurer’s office
• Neither the Insurer nor the Insured may cancel the policy until the mortgage has been paid off
• The mortgagee is not required to advise the Insurer of any material change in the risk known to him
• The Insurer could be called upon to pay a loss to the mortgagee, even though the Insured violated a policy condition
A
• The Insurer could be called upon to pay a loss to the mortgagee, even though the Insured violated a policy conditio
12
Q
11.Every policy of “fire” insurance:
• Covers fire, explosion and lightning
• Is required by law to cover fire, windstorm and lightning
• Usually covers fire, faulty electrical wiring and specified types of explosion
• Is required by law to cover at least fire, lightning and specific types of explosion
A
Is required by law to cover at least fire, lightning and specific types of explosion
13
Q
12.There are a number of General Provisions, Definitions and Exclusions that apply to the entire Automobile Insurance Policy. All of the following statements are true except one. Choose the exception.
• When the Insured purchases a new automobile to replace the insured automobile, coverage is automatically extended for a period of 14 days.
• Any persons who uses the automobile without the owners consent is entitled to Accident Benefits coverage only
• Coverage is restricted to Canada, the USA, and upon vessels plying between the ports of these countries
• The insured automobile is not permitted to be leased or rented to others without the specific consent of the Insurer
A
The insured automobile is not permitted to be leased or rented to others without the specific consent of the Insurer
14
Q
13.A building worth $200,000 is insured for $125,000 and the policy contains an 80% Co-insurance Clause. A fire causes the building to be destroyed. The Insured will recover: • $97,662.50 • $78,125.00 • $100,000.00 • $125,000.00
A
• $125,000.00
15
Q
14.When an Insured replaces an automobile designated in the policy, or adds another automobile to others which are all insured by the same Insurer, coverage is automatically provided for such Newly Acquired Automobile for a maximum of:
• 21 days from the date on the bill of sale
• 7 days from the date on the bill of sale
• 30 days from the date of sale at the dealership
• 14 days from the date of acquisition of newly acquired vehicle
A
14 days from the date of acquisition of newly acquired vehicle
16
Q
15.The General Provisions, Definition and Exclusions contain in automobile policies do not permit the use of the insured automobile for certain purposes. All of the following are excluded uses under the policy, except one. Choose the exception.
• The lease or rental of the insured automobile
• The carrying of passengers for compensation or hire
• The carrying of explosives or radioactive materials
• The occasional carry of children for educational program
A
The occasional carry of children for educational program
17
Q
16.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:
• The premium charged for coverages being provided by the Insurer
• Right of Insured to purchase salvage for an insured loss
• The amount of the settlement being offered
• Denial of insurance coverage under the policy
A
The amount of the settlement being offered
18
Q
17.When you sell Comprehensive or “All Risk” coverage you should advise the Insured that the policy insures:
• All risks of direct physical loss or damage, subject to the policy conditions and exclusions
• All risks, except theft from the interior of an unlocked automobile
• All risks, except earthquake and radioactive contamination
• All risks
A
All risks of direct physical loss or damage, subject to the policy conditions and exclusions
19
Q
18.Where an Insured’s access to his own dwelling is prohibited by Civil Authority, the Insurer will respond to pay Fair Rental Value and Additional Living Expenses under most Habitational Insurance Policies, provided that:
• Access is denied as a direct result to neighbouring premises by any peril
• Access to the insured property is prohibited by order of Civil Authority, and the peril causing the loss is insured by the insured’s own policy
• All additional expenses are recoverable under the contract as well as indemnifying the insured for all rental income that they cannot otherwise collect
• Coverage extends until the Civil Authority will allow residency
A
Access to the insured property is prohibited by order of Civil Authority, and the peril causing the loss is insured by the insured’s own policy
20
Q
19.The occupier of property owes the greatest duty of care to: • Thief • Trespasser • Pizza Delivery person • Postal Worker
A
Pizza Delivery person
21
Q
20.Liability policies insure bodily injury and property damage on an occurrence basis. This includes coverages for unexpected injury and damage which happens…
• Suddenly and unexpectedly only
• Suddenly and accidentally, over a long period of time or as a continuous and repeated exposure to substantially the same harmful condition
• Suddenly and over long periods of time
• Never covers anything over a long period of time
A
Suddenly and accidentally, over a long period of time or as a continuous and repeated exposure to substantially the same harmful condition
22
Q
21.Uninsured Motorist Coverage is included in the Accident Benefits coverage by Automobile Insurance Policies. It provides limit coverage for Insured’s that are injured or killed by an Insured or unidentified automobile. All of the following conditions must be present if a claim for damages arising out of an unidentified automobile is to be successful, except one. Choose the exception.
- The Insured must show that the identity of either the owner or driver of such automobile cannot be ascertained
- It must be shown that the Insured was wholly and continuously disabled or a period of not less than 14 days
- The accident must have been reported to authorities within 24 hours
- It must be shown that the Insured was wholly and continuously disabled for a period of not less than 7 days
A
The Insured must show that the identity of either the owner or driver of such automobile cannot be ascertained
23
Q
22.Automobile Insurance policies are subject to Statutory Conditions. One such Condition deals with the duties and responsibilities of the Insured and Insurer where there is a loss or damage to the insured automobile. All of the following statements with respect to this Condition are true except one. Choose the exception.
• The amount of the settlement offered by the Insurer is final and is not subject to negotiation
• The Insured is entitled to effect only such repairs as are immediately necessary for the protection of the automobile
• The settlement of all losses is determined on the basis of ACV
• The Insurer agrees to pay such expenses as are necessary to protect the automobile from further loss or damage
A
The amount of the settlement offered by the Insurer is final and is not subject to negotiation
24
Q
23.Automobile Insurance policies are subject to Statutory Conditions. One such condition deals with the duties and responsibilities of the Insured and Insurer when there is a loss or damage to the Insured automobile. All of the following statements in respect to this Condition are true except one. Choose the exception.
• When payment is made under the policy, the salvage, if any, is the property of the Insurer
• When payment is made under the policy, the salvage, if any, is property of the Insured
• The insurer agrees to pay such expenses as are necessary to protect the automobile from further loss or damage
• The settlement of all losses is determined on the basis of ACV
A
When payment is made under the policy, the salvage, if any, is property of the Insured
25
24.The Statutory Conditions provide that the Insured may terminate the contract:
• By failing to exercise the right of renewal within 5 days of the anniversary date of the policy
• By calling the broker and telling them that you want to cancel
• By destroying the policy
• At any time on request
• At any time on request
26
25.Under the Basic Residential Policy Form, which of the following losses is covered?
• Water hammer
• Back up of sewer
• Smoke due to faulty operation of the basement furnace
• Damage to the garage door caused by vehicle driven by Insured
• Smoke due to faulty operation of the basement furnace
27
27.Insurance deals with many types of risks; they fall into different categories: personal, property, liability. Insurance is a solution to the handling of these risks. Choose the best way to describe insurance as a way to deal with risk.
• The chance of loss for no financial gain is eliminated
• Retention of risk
• Give a portion of all of their risk away
• Reduce the frequency and severity of losses by controlling the risk
Reduce the frequency and severity of losses by controlling the risk
28
28.”Subrogation” means:
• That the Insured has the option of receiving payment for the loss from either the Insurer or the person responsible
• The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss
• The amount the insurance company receives from a person who is legally responsible for a loss
• Stepping into another’s shoes
The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss
29
29.To “bind a risk” means:
• Finding a company willing to give a quote on a risk
• Automatically renewing an existing policy
• Having authority from an Insurer to write up an application
• Having authority from an Insurer to put insurance in force
Having authority from an Insurer to put insurance in force
30
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30.Financial responsibility laws in each province require automobile owners to establish their financial ability to pay losses up to a certain dollar limit. The minimum legislated limits of third party liability coverage required to be carried in all provinces (except Quebec) is:
• $200,000
• $180,000 B.I. and $20,000 P.D.
• $50,000
• $190,000 B.I. and $10,000 P.D.
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31
32.All of the following are “Insured’s” under most Habitational Insurance policies except one. Choose the exception.
• Insured’s common law spouse who moved in four months ago
• Insured’s twins, age 22, who are living at Insured’s home while attending university
• Insured’s grandmother who lives with them
• 16-year-old foster child left in the care of the Insureds
32
33.Loss caused by “freezing” during the usual heating season is covered on Habitational Insurance policies only if the Insured fulfills the obligations outlined in the policy. If the Insured is away for more than four consecutive days, they must:
• Ensure all windows and doors are securely locked and heating is maintained
• Arrange for a competent person to enter the dwelling daily to ensure heating is being maintained or shut water supply off and drain all pipes and appliances
• Advise the Insurer that the dwelling will be unoccupied and take whatever steps you deem relevant so that freezing will not occur
• Obtain written permission from the Insurer for continuation of coverage during period of unoccupancy
33
34.There are a number of advantages to an Insured in choosing to insure under a Homeowner’s Policy. One feature common to all Homeowner’s Forms is:
• Personal property is insured on a Replacement Cost Basis
• Special Limits of Liability do not apply to jewellery, watches, gems, furs and fur garments in respect to theft
• Personal liability coverages automatically included
• Personal property automatically insured for 50% of value of dwelling building
34
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35.Liability policies are concerned with matters of civil liability, Civil Law addresses the following area(s):
• Contractual Liability
• Legal Liability
• Criminal Law
• Legal and Contractual Liability
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35
36.An “Occurrence Basis” Liability Policy is “broader” than a Liability Policy issued on an “Accident Basis.” An Occurrence Basis Policy:
• Provides coverage for damage caused by continuous and repeated exposure to substantially the same harmful conditions
• Provides coverage for bodily injury and property damage caused intentionally
• Provides coverage only for a sudden and unusual event
• Provides excess insurance over other existing liability policies
36
37.Physical damage coverage for automobiles rented in the name of an individual can be added to the Insured’s Automobile Insurance policy by the SEF 27 Legal Liability for Non-Owned Automobiles Endorsement. All of the following coverage provisions apply to this endorsement except one. Choose the exception.
• No more than one such automobile may be in the Insured’s or their spouse’s care, custody, or control at any one time
• Coverage is subject to a maximum of $50,000 in any one occurrence
• Coverage is for the same perils as the Insured under the Insured’s Automobile Insurance policy
• Coverage is restricted to certain types of automobiles
Coverage is subject to a maximum of $50,000 in any one occurrence
37
38.Which of the following statements is correct in connection with the 80% Co-insurance Clause?
• It restricts the insurance payable to less than 80% of the actual cash value of the property
• The Insured can collect only 80% of any loss
• If the amount of insurance is less than 80% of the value of the property, payment may be less than the actual loss
• The amount of insurance carried must, by law, be not less than 80% of the value of the property
f the amount of insurance is less than 80% of the value of the property, payment may be less than the actual loss
38
39.All of the following statements regarding the SEF 44 Family Protection Endorsement are true except one. Choose the exception.
• Provides Insureds with additional coverage in the event they are injured or killed by an uninsured or under- insured driver
• The limit of coverage provided is in addition to the limit of third party liability insurance carried by the at- fault driver
• The limit of coverage provided is the difference between the limit of third party liability insurance carried by the at-fault driver and that provided by the Insured’s own policy
• Persons entitled to coverage include Insureds and their dependent relatives
The limit of coverage provided is in addition to the limit of third party liability insurance carried by the at- fault driver
39
40.An owner of a condominium unit has a Condominium Unit Owner’s Policy. This policy provides protection for:
• Additional Living Expense based on the amount of personal property insured
• Improvements and betterments done by the owner to his/her own unit
• Special assessments necessitated relating to shortfalls of being underinsured in a building loss
• All of the above
40
41.If the Insured knowingly fails to reveal all material information when applying for insurance, the Insurer:
• Must continue the policy until expiry, but may not renew it
• May sue the Insured for misrepresentation
• Must pay all claims of the Insured
• May void the policy with respect to the property effected
41
42.The term of Fire Policy provides that the Insurer:
• Is liable for increased cost of repair where contributed to by a by-law regulation reconstruction
• Is liable only for such costs incurred after a loss for the tearing down and removal of debris of any structure, which does not conform to existing by-laws regulating building reconstruction
• Is not liable for any increased costs of repair due to the enforcement of any by-law regulating reconstruction
• Is only liable for 80% of increased costs of repair where contributed to by a by-law regulation reconstruction
42
43.The Additional Living Expenses Coverage as provided under Habitational Insurance Policies would pay:
• Those increased costs only, if any, for temporary accommodations occupied by the Insured after an insured loss
• All mortgage payments which Insured must continue to make after an insured loss
• 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
• All costs as incurred by the Insured for food, transportation and accommodations occupied by the Insured after an insured loss
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
43
44.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 was burglarized and $30,000 in jewelry stolen. Insurer would pay:
• $5,000
• Whatever the specific limit for jewelry that the insurers policy contains
• 50% immediately and the remaining 50% upon replacement of the jewellery
• $30,000
Whatever the specific limit for jewelry that the insurers policy contains
44
45.There are a number of established “legal precedents” that will affect our client’s legal liability for damages. Generally, our Insured will be liable for damages caused in all of the following instances except one. Choose the exception.
• Escape of dangerous things(s)
• Acts of his children over 10 years of age
• Domestic animals
• Acts of an employee acting within the scope of his employment
Acts of his children over 10 years of age
45
46.The Voluntary Property Damage section of a Homeowner’s Liability or Comprehensive Personal Liability Policy excludes damage caused intentionally by an Insured over the age of:
• 18 years
• Majority, as determined by the province in which the Insured resides
• 12 years
• 21 years
12 years
46
.“Indemnity” means:
• Restoring the Insured to the same financial position as he was in at the inception date of the policy
• Umberrima Fides
• Restoring the Insured to the same financial position as he was immediately prior to the loss
• Pay the Insured the face amount of the policy
Restoring the Insured to the same financial position as he was immediately prior to the loss
47
With respect to federally licensed insurance companies, the Federal Department of Insurance:
• Controls the types of policies issued
• Only supervises life insurance companies
• Stipulates the types of agents who may represent the company
• Regulates the financial stability of Insurers
Regulates the financial stability of Insurers
48
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49.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 contacts. The principal is:
• Legality of object
• Insurable interest
• Indemnity
• Uberrima Fides
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Uberrima Fides
49
50.Under an application for Automobile Insurance:
• All drivers who will be using the described automobile must sign the application
• Only the applicant needs to sign the application
• No signature is required on the application
• The applicant’s signature is required only when insuring leased automobiles
Only the applicant needs to sign the application
50
51.The SEF 20 Loss of Use Endorsement contains all of the following provisions except one. Choose the exception.
• Provides coverage only when the entire automobile has been stolen
• The time in which coverage starts varies which the cause of loss
• Covers expenses incurred for taxicabs or public means of transportation
• Coverage provided are subject to a daily and occurrence limit
Provides coverage only when the entire automobile has been stolen
51
52.Your clients have advised you they will be vacationing in Florida later this month. They have indicated they will be renting a car for two or three weeks while on vacation. All of the coverages provided by their own Automobile Insurance Policy will automatically extend to the rental car, except one. Choose the exception.
• The Insured’s legal liability for damage to the rented automobile
• The Insured’s legal liability for bodily injury to a pedestrian who is run over at a crosswalk
• The Insured’s claim for reimbursement of hospital and ambulance charges incurred as a result of an automobile accident
• The Insured’s legal liability for property damage caused to a motel building when the car rolled down an incline
The Insured’s legal liability for damage to the rented automobile
52
53.The Accident Benefits Coverage provided by the Insured’s automobile policy is available to all of the following persons except one. Choose the exception.
• A neighbour who is injured while removing boxes from the Insured’s trunk
• A pedestrian who is hit at an intersection by the Insured’s car
• The Insured’s 14 year old daughter
• Insured’s boarder who in injured while riding in a friend’s car
Insured’s boarder who in injured while riding in a friend’s car
53
54.Under a policy of “fire” insurance, which of the following losses is covered?
• Loss caused by enemy attack by armed forces
• Radioactive contamination
• Fire damage caused by a fire which followed a short circuit
• Loss to property caused by a process involving the application of heat
Radioactive contamination
54
55.Under a policy of “fire” insurance, the Insurer must make payment for loss within:
• 1 year from the date the loss occurred
• 90 days after completion of the Proof of Loss
• 60 days after completion of the Proof of Loss unless the contact provides for a shorter period
• 60 days after completion of Proof of Loss
60 days after completion of the Proof of Loss unless the contact provides for a shorter period
55
56.The Reinstatement Clause contained in most policies of Personal Property insurance provides that:
• Coverage limits are automatically re-instated after an insured loss
• 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
• Property lost or damaged shall be re-instated with equivalent property of like kind of quality
• Coverage, which is suspended due to a breach of policy conditions, is automatically re-instated when that breach is corrected
Coverage limits are automatically re-instated after an insured loss
56
57.All of the following item of personal property, except one, are subject to Special Limits of Liability under most Habitational Insurance Policies. Choose the exception.
• Books, tools and instruments relating to a business, profession or occupation
• Computer software
• Computer hardware
• Watercraft, including equipment
Computer hardware
57
58.“Negligence” is:
• Aiding and abetting another person to commit a felony
• Acting prudently, having regard to the circumstances
• Wilfully disobeying the law
• Failing to do what a reasonable person would do in a given situation
Failing to do what a reasonable person would do in a given situation
58
59.Generally, the Insuring Agreement in policies of liability insurance contains all of the following conditions of coverage except one. Choose the exception.
• The Insured must have been legally liable for damages
• The amount of any damages awarded is restricted to those, which are compensatory in nature
• The amount of any damages awarded will include separate amounts for punitive, exemplary and compensatory damages suffered
• Bodily injury or property damages must have been suffered by a third party
The amount of any damages awarded will include separate amounts for punitive, exemplary and compensatory damages suffered
59
60.The insurance policy states it will pay the lessor of three amounts in the event of a claim. One factor which does NOT enter into this calculation is:
• The original cost of the property
• The policy limit
• The mortgagee’s interest in the property
• The actual cash value of the property
The original cost of the property
60
61.A physical hazard is:
• A physical feature of a risk which may give rise to a loss
• Another name for a moral hazard
• A type of peril
• The possibility of a loss due to the construction of the building insured
A physical feature of a risk which may give rise to a loss
61
62.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 additional elements:
• Insurable interest, indemnity, genuine intention
• Insurance interest, consideration, indemnity
• Insurable interest, indemnity, umberrima fides
• Insurable interest, utmost good faith, lawful object
Insurable interest, indemnity, umberrima fides
62
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63.When physical damage coverage is insured by an Automobile Insurance Policy, the deductible is applied only to the following cause of loss:
• Fire
• Theft of the entire automobile
• Collision or upset
• Lightning
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Collision or upset
63
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64.There are a number of General Provisions, Definitions and Exclusions that apply to the entire Automobile Insurance Policy. The coverage provided by the policy apply to losses occurring in all of the following territories except one. Choose the exception.
• Hawaii
• Mexico
• Northwest Territories
• U.S.A.
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• Mexico
64
65.Some provinces have implemented “no fault” automobile insurance plans. The primary purpose of these plans is:
• To provide benefits to persons injured in automobile accidents, regardless of who is at fault
• To provide benefits to persons injured by uninsured or unidentified motorists
To provide benefits to persons injured in automobile accidents, regardless of who is at fault
65
66.Accident Benefits coverage is compulsory in most provinces. This coverage is provided:
• For physical damage to insured automobile
• To insured person injured in an automobile accident when the party causing the loss is both “uninsured” and “unidentified”
• To insured person injured in an automobile accident when they are able to prove the other party was responsible for the accident
• To insured persons injured in an automobile accident without regard to fault
* To provide benefits for the departments of persons killed in automobile accidents
* To provide physical damage coverage for insured automobiles involved in hit and run accidents
To provide physical damage coverage for insured automobiles involved in hit and run accidents
66
67.Automobile Insurance policies are subject to Statutory Conditions. One such condition prohibits Insureds from driving or operating an automobile in all of the following circumstances, except one. Choose the exception.
• While they are under the age of 16 or other age at which a license may be issued to them
• For the transporting of clients or customers proposing to do business with them
• While the license to drive or operate an automobile is suspended
• Unless they are either authorized by law or qualified to drive
For the transporting of clients or customers proposing to do business with them
67
68.If a policy has been cancelled before the term has expired:
• The policy holder will be charged an additional fee for cancellation
• Part of the commission corresponding to the unearned portion of the premium must be returned to the Insurer
• The commission is fully earned
• The total premium is returned to the policyholder
Part of the commission corresponding to the unearned portion of the premium must be returned to the Insurer
68
70.Where the Insurer opts to repair, rebuild, or replace rather than make payment in the form of a cash settlement, it must:
• Seek the consent of the Insured’s mortgagee
• First provide the Insured with the option of accepting or rejecting the proposed basis of settlement
• Advise the Insured’s broker or agent of its decision
• Provide the Insured with written notice of its intention to do so within 30 days after receipt of proof
Provide the Insured with written notice of its intention to do so within 30 days after receipt of proof
69
72.The Basis Residential Policy Form provides insurance coverage under the amount of insurance purchased on the dwelling building for materials and supplies located on or adjacent to the Insured’s premises. Insurance coverage is provided only where:
• Loss or damage is caused by the peril of fire only
• Such materials and supplies were not “in the open” for more than 30 consecutive days
• Such materials and supplies were intended for use on the Insured’s premises only
• The value of such materials and supplies does not exceed 10% of the amount of insurance purchased on the dwelling building
Such materials and supplies were intended for use on the Insured’s premises only
70
73.All of the following “elements” except one are required to be present if the legal liability of our client is to be proven. Choose the exception.
• Negligent actions proximate cause of damages
• Duty breached as a result of negligence
• Client owned a duty
• Damages unforeseeable
Damages unforeseeable
71
74.Insurance coverage, under the terms of a policy of “fire” insurance, expires at:
• Twelve months after the broker binds coverage
• 12:01 am Standard Time at the address of the named insured
• 12:01 am Standard Time at the location of the property insured
• 12:01 pm Standard Time at the location of the property insured
12:01 am Standard Time at the address of the named insured
72
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75.A building worth $360,000 is insured for $90,000 and the policy contains an 80% Co-insurance Clause. A fire causes $72,000 damage. The Insurer will recover:
• $22,500
• $72,000
• $90,000
• $57,600
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$22,500
73
76.Automobile Insurance policies are subject to Statutory Conditions. One such condition requires that when there has been loss or damage to the insured automobile, the most immediate requirement upon insureds is:
• To protect the automobile from further loss
• To notify the repair garage
• To make a full written report to their broker
• To notify the Insurer within 30 days
To protect the automobile from further loss
74
77.Accident Benefits coverages provided by Automobile Insurance policies insure all of the following, except one. Choose the exception.
• Weekly income benefit when insured is injured in an automobile accident and is unable to work
• Death benefits to surviving spouse and dependents when insured’s death is the result of an automobile accident
• Cost to repair or replace clothes and other personal property, which is lost or damaged as a result of an automobile accident
• Further expenses when Insured’s death is the result of an automobile accident
Cost to repair or replace clothes and other personal property, which is lost or damaged as a result of an automobile accident
75
78.All of the following statements relating to Loss of Income coverage are true except one. Choose the exception.
• Coverage is available when an Insured is injured in an automobile accident and unable to work
• The Insured is entitled to a maximum of 75% of gross weekly salary commencing 14 days after the accident and ceasing at the end of 52 weeks
• The Insured must have been employed at the time of the accident, or if over 18 years of age, employed at least six of the proceeding 12 months
• The Insured is entitled to a maximum of 80% of gross weekly salary commencing 7 days after the accident and ceasing at the end of 104 weeks
The Insured is entitled to a maximum of 75% of gross weekly salary commencing 14 days after the accident and ceasing at the end of 52 weeks
76
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79.Our client’s building is insured against fire, with loss payable to Dogwood Trust Company as mortgagee. The property is destroyed by fire but, before he can file proof of loss, our client dies without a will and with no one to look after his affairs. Proof of loss may be filed by:
• The Superintendent of Insurance
• The Minister of Finance
• The Dogwood Trust Company
• The insurance company
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The Dogwood Trust Company
77
80.The Statutory Conditions provide that the Insured must promptly notify the Insurer of any material change. A material change is one which:
• Introduces a new feature which increases the chance of loss
• Results in damage to goods caused by their undergoing a process involving the application of heat
• A change that may result in increased premiums
• Due to by-law change, provides fore use of materials superior to those that existed at the time the insurance policy was purchased
Introduces a new feature which increases the chance of loss
78
81.All of the following losses to property are excluded under Homeowner’s Comprehensive Form except one. Choose the exception.
• Smoke from a fireplace
• Loss of damage caused by birds, vermin, rodents or insects
• Breakage of fragile or brittle articles
• Sporting equipment where loss due to use
Smoke from a fireplace
79
82.Where two or more persons are judged to be negligent in their actions, they are said to be “joint tortfeasors.” In such circumstances:
• Each is assessed a proportion of the liability for damages and each Insurer is required to respond only after actual judgement is rendered
• Each party is held liable for the entire damage
• Each is assessed a proportion of the liability for damages but the Insurer of the party carrying the highest limits of liability insurance must provide all costs of establishing a proper legal defence
• The party from whose property the damages originated is automatically deemed to be liable for all damages
• Each party is held liable for the entire damage
80
83.In which of the following cases is it necessary for the Insurer to give consent for a Change of Interest?
• When Insured sells his house and new owner wants to continue the policy
• When an Executor takes over after the death of the Insured
• Where there has been an authorized assignment under the Bankruptcy Act
• An Insured becomes insane and an administrator takes over his affairs
When Insured sells his house and new owner wants to continue the policy
81
84.Which of the following is not covered under Supplementary Payments Sections of a liability policy?
• The amount of the actual judgement
• Interest on the insured portion of the judgement
• Cost of bonds purchased by Insured to release any portion being help by the court as security
• Defence of the Insured against claims and suits for negligence
The amount of the actual judgement
82
85.The Homeowner’s Form provides for a 10% limit of insurance carried on the Dwelling to extend to Detached Private Structures. This 10% limit:
• Is available only where the amount of insurance provided on the dwelling is used up
• Is included within the amount of insurance provided on the dwelling
• Is subject to a Co-Insurance requirement
• Is a separate coverage limit, which is in addition to the amount of insurance provided on the dwelling
Is a separate coverage limit, which is in addition to the amount of insurance provided on the dwelling
83
86.The major function of insurance is:
• To serve as the basis of existing credit system
• To spread the losses of the few among the many
• To reduce the cost of losses
• To safeguard mortgage investments
To spread the losses of the few among the many
84
87.Co-Insurance Clauses are designed to:
• Prevent the chance of a total loss
• Transfer part of the risk to another Insurer
• Discourage the Insured from gambling on suffering only a partial loss
• Penalize the Insured in the event of over-insurance
Discourage the Insured from gambling on suffering only a partial loss
85
88.What is treaty re-insurance?
• An Insured is not party to re-insurance contact
• A contract applying to a number of risks regardless of the type of insurance
• Insured cedes a proportional amount when determining amount to be ceded
• Only refers to catastrophic re-insurance
A contract applying to a number of risks regardless of the type of insurance
86
89.A client is involved in a vehicle accident with a pedestrian. Which of the following statements is true?
• The pedestrian is at fault if walking across a street when not safe to do so
• The onus is on the driver of the vehicle to prove that they were not negligent in their actions
• The “fault chart” would apply
• The Highway Traffic Act would not be considered
The onus is on the driver of the vehicle to prove that they were not negligent in their actions
87
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90.The policy that covers individuals who drive automobiles which they do not own and which are not registered in there is an:
• SPF 2
• SPF 20
• SPF 6
• SPF 1
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SPF 2
88
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91.An insured building is insured for $70,000 meeting the 80% Co-insurance requirement on the policy. Owner 1 who lived in the residence owner 50% of the building. Owner 2, who did not live on the premises, owned 30% of the building. Owner 3, who also did not live on the premises, owned the remainder. In the event of a total loss, how much would Owner 2 be entitled to?
• $21,000
• $16,800
• $70,000
• $35,000
```
21000
89
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92.What is an SEF 6a endorsement?
• Permission to carry explosives endorsement
• Reinstatement of coverage endorsement
• Permission to carry passengers
• Recreational Vehicle endorsement
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Permission to carry passengers
90
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93.If a person applying for insurance falsely describes the property to the prejudice of the Insurer, or fraudulently omits to communicate accordingly, this is known as:
• Insurable Interest
• Fraud
• Misrepresentation
• Omission of a material fact
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Misrepresentation
91
94.Emergency removal expense is included up to 5% up the dwelling building on the following Habitational Form:
• Mobile home insurance policies
• Comprehensive homeowner’s insurance forms
• Broad homeowner’s insurance forms
• Condominium owner’s policies
• Mobile home insurance policies
92
95.Commercial Property Insurance policies insure the following under “Commercial Property” defined:
• Building, outbuilding and common areas
• Building, stock and shelving
• Building employees and equipment
• Building, stock and equipment
Building, stock and equipment
93
96.Which of the following is not included under “Building” under a Commercial Property insurance policy:
• Permanent fixtures attached to and forming part of the building
• Fixed structures pertaining to the building and located on the premises
• Growing plants, trees, shrubs or flowers inside the building for decorative purposes
• Packing, wrapping and advertising materials
Packing, wrapping and advertising materials
94
96.Which of the following is not included under “Building” under a Commercial Property insurance policy:
• Permanent fixtures attached to and forming part of the building
• Fixed structures pertaining to the building and located on the premises
• Growing plants, trees, shrubs or flowers inside the building for decorative purposes
• Packing, wrapping and advertising materials
Packing, wrapping and advertising materials
95
97.Additional living expenses reimburse:
• All costs associated with living away from home plus the mortgage because the house is not able to be occupied
• Reasonable additional costs incurred while living outside the home in addition to those expenses normally incurred at your residence
• Reasonable additional expenses incurred due to the excess costs attributed to not being able to reside in your principle residence
• All expenses incurred during a lifetime limited to 30 days
• Reasonable additional expenses incurred due to the excess costs attributed to not being able to reside in your principle residence
96
98.Under a habitational policy, up to _____% of the dwelling building is available for outdoor trees, shrubs and plants, or only which coverages?
• 5% covering fire, lightning, explosion, impact by aircraft or land vehicle, riot, vandalism and malicious acts
• 15% covering fire, lightning, explosion, impact by aircraft or land vehicle, riot, vandalism or malicious acts
• 5% covering fire, lightning, explosion, theft, smoke, riot or civil commotion, impact by aircraft or land vehicle
• 15% covering fire, lightning, explosion, theft, smoke, riot or civil commotion, impact by aircraft of land vehicle
5% covering fire, lightning, explosion, impact by aircraft or land vehicle, riot, vandalism and malicious acts
97
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100.Which of the following would not be included under the coverage “Dwelling Building and Attached Structure?”
• Deck
• Awning
• Attached garage
• Gazebo
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GAZEBO
98
101.The Commercial General Liability Policy excludes payment for injury or damage to others arising out of “the ownership, use or operation” of any automobile. These coverages can be provided by ______________
• SPF 4 - Standard Garage Automobile Policy
• SPF 1 – Standard Automobile Policy
• SPF 2 – Drivers Policy
• SEF 44 – Family Protection Endorsement
SPF 4 - Standard Garage Automobile Policy
99
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102.Compensatory damages are those which are intended to compensate the wronged party __________ for the injury or damage caused by the insured __________
• Plaintiff; defendant
• Defendant; plaintiff
• Defendant or plaintiff; third party
• Wronged party; plaintiff
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• Plaintiff; defendant
100
103.A third party is ________
• One who is party to the contract and thereby has rights therein
• One who is not a party to the agreement or to a transaction but who may have rights therein.
• One whom is party to the contract and thereby does not have rights therein
• None of above
One who is not a party to the agreement or to a transaction but who may have rights therein.
101
104.The insurer’s liability under the insurance policy is limited to the payment of __________ damages only.
• Punitive, nominal and compensatory damages
• Nominal and punitive damages only
• Compensatory damages only
• Nominal, punitive and exemplary damages
Compensatory damages only
102
105.Liability Insurance – The types of bodily injury which the insurer agrees to pay on behalf of the insured include:
• Bodily injury; sickness or disease; death resulting from any of these at any time
• Bodily injury, death resulting from bodily injury
• Sickness or disease or death resulting from any sickness or disease
• Clear and malingering injury
Bodily injury; sickness or disease; death resulting from any of these at any time
103
106.A Tort is a private or civil wrong, other than breach of contract, for which the court will provide a remedy in the form of an action for damages. Which of the following is not considered a Tort?
• Trespass
• Defamation of character (libel or slander)
• False arrest
• Murder
• Murder
104
107.Factors influencing depreciation charged include:
• Condition of the item, size of item, purchase price
• Condition of the property, obsolescence, normal life expectancy, resale value
• Condition of the property, obsolescence, normal life expectancy, wear and tear, colour
• Obsolescence, resale value, purchase price
Condition of the property, obsolescence, normal life expectancy, resale value
105
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108.The limit stated on the insurance policy for bodily injury and property damage liability is available for each occurrence. In other words, even if a claim has been paid, the limit stated in the policy will be available again to pay future claims. This is called:
• Aggregate limit
• Stepped limits
• Per occurrence form
• Insurance policy limit form
```
• Per occurrence form
106
109.Section B of SPF 1 defines Dependent Relative as:
• A person, under 18 living in the household, financially dependent on the parent or spouse of the parent or both of them for financial support
• A person, 18 years of age and older, living in the household and requiring financial support from the head of household or their spouse, due to their mental infirmity or physical disability
• A person over 18 years of age, living in the household and requiring financial support from the head of household or their spouse, due to their mental infirmity or physical disability
• A and B
• A and B
107
10.After an auto loss, where the insured does not take precautionary measures to protect the vehicle from further loss or damage, and a subsequent loss occurs, this consequential loss is:
• Covered subject to a second deductible if the peril is covered under the policy
• Covered under the original cause of loss
• Covered but the adjuster will investigate fully
• Not covered
• Not covered
108
111.Party A borrows Party B’s holiday trailer which he pulls with his own truck. When backing into a campsite, Party A backs Party B’s trailer into the campsite washrooms, damaging both the washroom, and the trailer itself. How will Party A and Party B’s policies respond?
• Party A’s Section A will pay property damage to the campsite’s washroom while Party B’s Section A will pay damage to the trailer
• Party A’s Section A will pay property damage to the campsite’s washroom while Party B’s Section C will pay damage to the trailer
• Party B’s Section A will pay property damage to the campsite’s washroom while Party B’s Section C will pay damage to the trailer
• Party A’s Section A will pay property damage to the campsite’s washroom while Party A’s Section C will pay damage to the trailer
• Party A’s Section A will pay property damage to the campsite’s washroom while Party B’s Section C will pay damage to the trailer
109
112.The insured comes into your office on January 1 to insure their home for a year. They have been cancelled off pay plan by 3 previous insurers, and does not qualify for payment plan. Their bank is insisting on the home carrying insurance, and they must insure it today, paying full premiums annually. The premium for the annum is $1200 but the client only has $600 cash, no credit cards. You speak with your manager, and arrange that the client can pay half now, and half on July 1st. The client does not come in on July 1st with their premium payment and the home incurs a total loss house fire on July 8. The policy does not contain a co-insurance clause, has replacement cost on contents and replacement cost guarantee on the dwelling. How will the insurer respond?
• Pay nothing as the client did not fulfill their responsibility
• Pay nothing as the policy would have cancelled providing adequate statutory notification
• The claim will be paid in full but it is the insurers responsibility to collect any unpaid premiums prior to adjudication of the claim
• The claim will be paid in full but it is the brokers responsibility to collect any unpaid premiums prior to the claims settlement
• The claim will be paid in full but it is the brokers responsibility to collect any unpaid premiums prior to the claims settlement
110
114.Weekly Indemnity is also known as?
• Short term disability
• Long term disability
• Payment immediately after a disability
• All of the above is deemed weekly indemnity
Short term disability
111
115.A client has been in an accident caused by an insured peril and the insurer agrees to the claim being covered. The client does not agree with the amount of settlement and believes his insurance policy should pay more for the vehicle. What is the process called available under Statutory Conditions, which may or may not end up assisting the client’s position on what he feels the vehicle’s value should be?
• Indemnity Agreement
• Indemnity provision
• In case of disagreement process (Appraisal)
• In case of disagreement process (Appraisal)
112
116.Your insured hires a contractor to perform work around their home. Reasonable care was exercised in hiring the contractor, and it is reasonable that the contractor can complete the task. Your insured leaves (the homeowner) leaves the insured to their own skills and ability to complete the job. A liability suit ensues after the contractor causes damages to the next door neighbours home. Which policy is liable?
• Your insured's policy responds because he did not get references
• The contractor is liable provided reasonable care was taken when hiring the contractor
• The occupier of the property (homeowner) is liable because the work being performed is on their property
• No-one is liable unless they are negligent
The contractor is liable provided reasonable care was taken when hiring the contractor
113
117.Your insured owns a liquor store with a cold beverage area. Although there are security cameras, quite often cold beer and cider cans are stolen from the liquor area. The store owner had a quote for security cameras to be installed, but has decided not to proceed because of the cost. They have a Named Perils Commercial Property policy with a $20,000 deductible. They figure that $20,000 of alcohol has been stolen in the past year. Looking at their policy, they note that the peril of burglary is bolded as a coverage under their policy wording as one of the named perils insured. Your insured calls the Broker, who reports the claim to the Insurer. The Adjuster has responded as follows in denying this claim:
• There are multiple occurrences of theft, therefore a deductible would apply to each occurrence, not to an aggregate limit. In addition, the peril of theft is covered but not worth multiple deductibles for the policy to respond.
• There have been multiple occurrences of theft, therefore a deductible would apply to each occurrence, not to an aggregate limit. In addition, burglary is what the client purchased therefore no coverage in this event.
• As there have been multiple occurrences of theft, the insured is not entitled to coverage as it will create a claims frequency issue.
• Both A and C
There have been multiple occurrences of theft, therefore a deductible would apply to each occurrence, not to an aggregate limit. In addition, burglary is what the client purchased therefore no coverage in this event.
114
118.How many Continuing Education Credits does a Level 1, 2 or 3 licensed Broker require per annum?
• 14 CE Credits per year, with the term being July 1 to July 1
• 14 CE Credits per year, with the term being July 1 to June 30
• 15 CE Credits per year, with the term being July 1 to June 30
15 CE Credits per year, with the term being July 1 to June 30
115
119.A Level 2 licensed agent wants to purchase an insurance brokerage. How long must they first hold Level 2 license before qualifying to be Level 3 Designated Representative licensed in the Province of Alberta
• They must hold their Level 1, then Level 2 for at least 1 year before becoming Level 3 licensed
• They must hold their Level 1, then Level 2 license and can attempt Level 3 at any time
• They must hold their Level 2 license for at least 12 months of the preceding 24 months before writing the Level 3 exam
• They must hold their Level 2 license for at least 24 of the preceding 36 months to have their Level 3 license sponsored
They must hold their Level 2 license for at least 24 of the preceding 36 months to have their Level 3 license sponsored
116
120.Which organization approves construction and safety equipment in Canada?
• Insurance Institute of Canada (IIC)
• Underwriters Laboratory of Canada (ULC)
• Centre for Study of Insurance Operations (CSIO)
• Canadian Safety ASsociation (CSA)
Underwriters Laboratory of Canada (ULC)
117
121.A mortgagee is defined as a person or organization that lends money to someone to buy property. The mortgagee under a mortgage clause on a property insurance policy has certain rights and obligations. Which of the following is a right of the mortgagee?
• The right to share in the loss payment, as long as the insured owes something on the mortgage
• The right to share in the loss payment, unless the mortgagor neglects the property
• The right to share in the loss payment, unless occupation of the premises is for purposes more hazardous than those permitted by the policy
• All of the above
The right to share in the loss payment, as long as the insured owes something on the mortgage
118
122.Your clients have been renting a unit in a high-rise condominium building and have carried a tenants package with your office. They have just purchased a condominium unit similar to the one that they have been renting, and will soon be moving to their new condo unit. What advice do you provide to meet the needs for insuring their new condominium unit?
• Transfer their existing policy (as is_ to their new address. The buildings are similar, and they do not plan to buy any new contents right away
• Cancel the entire policy. They no longer have any need for insurance as the condominium corporation is required by law to insure all exposures for the owners of each individual unit
• Get full details of the security arrangements and alarm systems in the building. You will then be able to recommend how much fire and theft insurance that they need to carry
• Cancel their tenants policy and apply for a special package policy designed specifically for condominium unit owners
Cancel their tenants policy and apply for a special package policy designed specifically for condominium unit owners
119
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123.You inherit a valuable painting which you intend to exhibit periodically at various art galleries. This would best be insured under:
• Personal Articles Endorsement
• Homeowners Broad Form policy
• Fine Arts Endorsement
• Tenants package policy
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Fine Arts Endorsement
120
124.A CONFLICT OF INTEREST position means a situation where an intermediary:
• Is charging an excessive rate of interest on a payment plan
• Is looking at the best interests of the client and other stakeholders
• Has an incentive to act other than in the best interest of the client
• Commits a civil wrong other than a breach of contracgt
Has an incentive to act other than in the best interest of the client
121
125.Professional brokers associations have codes of conduct which specify brokers duties to clients, insurers and to fellow brokers. Which of the following is NOT a duty owed to fellow brokers?.
• To not harm their reputation
• To adhere to the binding authority granted by the insurer
• To cooperate in every reasonable way for the betterment of the industry
• To encourage public respect for an endeavour to improve the practice of their vocation
To adhere to the binding authority granted by the insurer
122
126.Your insured is a Dr, and very highly paid specialist surgeon. Your office insures his malpractice insurance for medical mistakes, his mansion, his yacht and his autos. He is questioning his own disability insurance to be covered in the event of a total disability occurring where he cannot perform intricate surgeries. He has the money to afford a very expensive insurance policy. Given this, which definition of Total Disability policy do you recommend to this Dr.?
• Regular Occupation definition which pays the difference between his income working and that if he cannot work in his own career
• Any Occupation definition as he has lots of money and assets
• Any Occupation definition is all he could qualify for given his income
• Own Occupation definition as this is by far the best, provided he can qualify through Underwriting
Own Occupation definition as this is by far the best, provided he can qualify through Underwriting
123
127.Your client is a pharmacist and wants the best insurance to replace his income if he can no longer dispense tablets and administer needles due to arthritis. He would continue working, but perhaps not as a pharmacist. He has not been diagnosed with arthritis, but is worried for his future as arthritis runs in his family. Which definition of Total Disability would you recommend to your client, the 30 year old pharmacist?
• Any Occupation definition of Total Disability insurance
• Own Occupation definition of Total Disability insurance
• Regular Occupation definition of Total Disability insurance
• None of the above, he does not need disability insurance
Regular Occupation definition of Total Disability insurance
124
128.Your client has bought a cabin at the lake. He needs to rebuild this cabin to make it structurally sound, and he has some friends in the construction business. Explain to the client the risk he is undertaking:
• As he doesn't stay there, there is no risk
• Speculative risk as he may move in another time
• He requires a seasonal policy and Course of Construction coverage once construction commences. This is pure risk
• He needs homeowners tenants policy waiving the liability coverage
• He requires a seasonal policy and Course of Construction coverage once construction commences. This is pure risk
125
129.The Alberta Superintendent of Insurance in Alberta:
• Approves policy wordings used by varying companies
• Approves endorsement wordings used by varying companies
• Administers the Claims Arbitration Agreement
• A & B
• A & B
126
130.Your client has taken up driving UBER as part of the Transportation Network for ride-share arrangements. You advise them:
• Cancel their SPF#1, they are covered under the SPF#9 of UBER
• Retain their SPF#1 as they are covered under their own policy when not using their vehicle as part of the transportation network
• Buy an SPF#9 which is sold to UBER
• Sell their vehicle the risk is too great
Retain their SPF#1 as they are covered under their own policy when not using their vehicle as part of the transportation network
127
131.The purpose of the Total Disability Coverage under Section B, Subsection 2, Part 2 of the SPF#1 is:
• To provide payment for any medical expenses which the insured may incur
• To provide the insured with temporary funds for the period of injury until such time as all of the lost earnings re recovered from the responsible party
• To provide a substitute for some of the earnings which an insured may lose as a result of injury sustained in an accident if the injury prevents the insured from working
• To provide punitive damages if the insured suffers a total disability or dismemberment
To provide a substitute for some of the earnings which an insured may lose as a result of injury sustained in an accident if the injury prevents the insured from working
128
132.The SEF 44 – Family Protection Endorsement:
• Protects the insured and eligible passengers in their vehicle for liability of a third party whose own insurance is insufficient to cover their claims for bodily injury
• Is mandatory coverage in Alberta
• Provides the same coverage as uninsured motorist coverage while driving in Quebec, BC, Saskatchewan or Manitoba
Protects the insured and eligible passengers in their vehicle for liability of a third party whose own insurance is insufficient to cover their claims for bodily injury
129
133.The SEF 9 is a marine use excluded endorsement, which removes water damage under Comprehensive and All Perils coverages to any vehicle used in water if applied. Insurance is not designed to fix mechanical damages caused by using the vehicle where it is not intended. Commonly, this endorsement is placed on recreational vehicles such as snow machines and ATV’s. Which of the following losses would be excluded if a Standard Endorsement form # 9 (SEF 9) was attached to the Auto policyHINT
• Theft of the quad or snowmobile
• Collision with a boulder
• Riding across a half-frozen lake and sinking
• Injury to the passenger (Section B)
Riding across a half-frozen lake and sinking
130
134.The SPF#9 is a Transportation Network Policy, used by Uber, Lyft and other ride-share operators. This is a policy, not an endorsement and provides coverage to operators of ride-share because the exposure is:HINT
• Carrying passengers for compensation but only covered when their Uber sign is on
• Carrying explosives
• Carrying passengers for compensation if the app is on
• Carrying passengers for compensation when the ride has been accepted through the app
131
134.The SPF#9 is a Transportation Network Policy, used by Uber, Lyft and other ride-share operators. This is a policy, not an endorsement and provides coverage to operators of ride-share because the exposure is:HINT
• Carrying passengers for compensation but only covered when their Uber sign is on
• Carrying explosives
• Carrying passengers for compensation if the app is on
• Carrying passengers for compensation when the ride has been accepted through the app
Carrying passengers for compensation when the ride has been accepted through the app
132
135.On a farm insurance policy, if an outbuilding is damaged more than two-thirds of its value, an initial payment of 50% will be made. The remaining balance will be payable if:
• It is repaired or replaced within three months of the date of loss or damage
• It is replaced with a building designed for the same purposes
• It is repaired or replaced in the exact location as the damaged building was situated
• All of the above
It is replaced with a building designed for the same purposes
133
136.Our insured has purchased a new acreage. They are planning to move their mobile home this weekend, and have hired a transport company to disconnect water and sewer services and move this mobile home. . It happens to be a very windy day on the day of the move and the home is damaged due to wind. How will their mobile home policy respond?
• Covered because windstorm is an insured peril
• Covered for 5% of building limit if it is an emergency
• Not covered under the mobile home policy as it is cargo and in the care, custody and control of the transport carrier
• d. The house is covered because it is windstorm, but not the contents
Not covered under the mobile home policy as it is cargo and in the care, custody and control of the transport carrier
134
137.Which of the following are NOT true of mobile home policy?
• There is no coverage when the house is being moved unless it is for emergency purposes
• There is no coverage for embezzlement, theft or secretion or gambling it in away or giving it away
• There is no coverage for outdoor satellite dish if caused by windstorm
• Mobile home policies are either BASIC or COMPREHENSIVE with replacement cost
Mobile home policies are either BASIC or COMPREHENSIVE with replacement cost
135
138.Which of the following situations would most likely result in Errors & Omissions claim?HINT
• You did not fully understand the nature of your insured’s business risk, consequently, you did not identify or recommend coverage for a specific exposure
• You incorrectly advised your client that coverage was not available for a portion of their risk
• Your client thought that they were insured, and they suffered a loss before you forwarded the application to the insurer for binding confirmation
• All of the above
• All of the above
136
139.Insurance is a form of spreading the losses of the few among the premiums of the many and benefits society in general. How?
• Because clients have to have insurance
• Because it gives people peace of mind. They can know that their funds are set aside for insurance purposes and therefore use their own savings and funds in other ways, stimulating the economy
• People all sue, and we are in a litigious environment. Insurance ensures that people can sue
• None of the above
Because it gives people peace of mind. They can know that their funds are set aside for insurance purposes and therefore use their own savings and funds in other ways, stimulating the economy
137
140.If an insured business declares bankruptcy and afterward their building burns in a fire, under Statutory Conditions,, the Insurer:
• The insurer would make payment as they are required to do so until the Bankruptcy Trustee has completed the sale of this businesses assets
• No payment is made
• Fire is never a covered peril, and especially after a bankruptcy as it is likely arson
• The insured would be liable
The insurer would make payment as they are required to do so until the Bankruptcy Trustee has completed the sale of this businesses assets
