The major function of insurance is:
a. To reduce the cost of the losses
b. To share the losses of the few among the many
c. The safeguard the
... [Show More] interest of mortgages
d. To serve as a basis of existing credit system
b. To share the losses of the few among the many
A peril if best defined as:
a. The chance of a loss
b. The occurrence of a loss
c. The cause of a loss
d. The result of a loss
c. The cause of a loss
Indemnify means:
a. Returning the premium of the insured
b. Restoring the insured's to the same financial position as they were in immediately prior to the loss
c. Paying the insured's the face amount of the policy
d. Restoring the insured's to the same financial position as they were
b. Restoring the insured's to the same financial position as they were immediately prior to the loss
Property insurance contracts are designed to pay for loss or damage arising out of the happening of a specific event. Only the following statement regarding the events insured by property insurance contract 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. The event may occur accidentally or be caused deliberately by the insured
a. The event must be must be a future event and it must be accidental
The following is the most practical way in which to deal with risk:
a. Avoidance of Risk
b. Retention of Risk
c. Controlling of Risk
d. Transfer of Risk
d. Transfer of Risk
In a contract of insurance, consideration means:
a. The exchange of something of value parties
b. The amount the insurance can collect in event of a claim
c. The object of insurance
d. The reviewing of the details of the risk to be insured by an underwriter
a. The exchange of something of value between parties
Which of the following would be correct legal name of the insured in a contact of insurance:
a. The corner store
b. John's Corner Store
c. J.D.'s Corner Store
d. The Corner Store Ltd
d. The Corner Store Ltd
All contracts require that five elements be present if the contract is to be enforceable by law. An insurance contract is enforceable only if it contains the following three additional interest:
a. Insurable Interest, Utmost Good Faith
b. Insurable Interest, Consideration, Indemnity
c. Insurable Interest, Indemnity, Utmost Good Faith
d. Insurable Interest, Indemnity, Genuine Intention
c. Insurable Interest, Indemnity, Utmost Good Faith
If your clients do not advise the insurer of previous losses when required to do so, they have 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
To bind a risk means:
a. That the broker has committed an insurer to provide a contract of insurance on the subject matter under discussion
b. Finding a company willing to give a quote on a risk
c. Getting underwriting information from a client
d. Automatically renewing an existing policy
a. That the broker has committed an insurer to provide a contract of insurance on the subject matter under discussion
The property and casualty insurance compensation corporation (PACICC) was formed for this purpose:
a. To have all insurers share in the payment of claims arising out of a single catastrophe
b. To spread the costs of suspected fraudulent claims amongst all insurers
c. To provide consumers with insurance protection in the event of an insurer insolvency
d. To monitor the solvency of federally licensed insurers
c. To provide consumers with insurance protection in the event of an insurer insolvency
Insurance brokers have a fiduciary responsibility to their clients. The following statement best summarizes the extent of the broker's fiduciary responsibility:
a. The commission for the policy is considered to be fully earned
b. The total commission earned is returned to the insured
c. The unearned portion of the commission is returned to the insured
d. The commission, less 50%, is required to be returned to the insured
c. The unearned portion of the commission is returned to the insured
Under the terms of the Insurance Act, property which is necessarily removed to prevent further damage is covered at the new location:
a. For seven days or until the policy expires
b. For seven days, but only if a removal permit is attached to the policy
c. For a reasonable time
d. Until the original location is repaired
a. For seven days or until the policy expires
Subrogation refers to:
a. The amount the insurance company receives from a person who is legally responsible for loss
b. The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss
c. The right of the insurance to take over the salvage after the claim has been made
d. The right of the insured's to collect the amount of their loss from either the insurer or the person responsible
b. The right of the insurance company to recover payments made under the policy from another person who is legally responsible for the loss
Every policy of "Fire" insurance:
a. Usually covers fire, smoke, and specific types of explosions
b. Is required by law to cover fire, windstorm, and lightening
c. Covers fire, explosion, and windstorm
d. Is required by law to cover at least fire, lightening, and specified types of explosions
d. Is required by law to cover at least fire, lightening and specified types of explosions
Your clients recently burnt a large pot roast when a fire broke out in their kitchen oven. This loss to the roast is considered to be a result of:
a. Direct fire
b. Indirect fire
c. Hostile fire
d. Friendly fire
d. Friendly fire
Statutory conditions found in all policies of "fire" insurance:
a. Outline the duties and responsibilities of the insured and the insurer
b. Specify the coverages provided
c. State the rights of third parties
d. Are not expressly required by law
a. Outline the duties and responsibilities of the insured and the insurer
When an insured knowingly fails to reveal all material information when applying for insurance and their is a subsequent loss under the policy, the insurer:
a. Must pay the insured's claim
b. Must continue the policy until expiry, but may choose not to renew it
c. May void the policy only if it is able to show that the misrepresentation was directly linked to the loss
d. May sue the insured for misrepresentation
c. May void the policy only if it is able to show that the misrepresentation was directly linked to the loss
In the following case, the insurer must give consent to transfer an existing insurance contract:
a. When the insured's sell their home and the new owners want to continue the existing policy
b. When there has been a change in title to the insured's property after the death of the insured
c. When there has been an authorization assignment under the bankruptcy act
d. When the insured becomes insane and title to the insured property is given to another by order of the court
a. When the insured's sell their home and the new owners want to continue the existing policy
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 their undergoing a process involving the application of heat
b. Due to a bylaw change, provides for use of materials inferior to those that existed at the time the insurance policy was purchased
c. Results in damage to buildings/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
Your clients insurance policy was recently cancelled for non-payment of premium, six days after the notice of termination was mailed by the insurer, your client has a loss:
a. The loss would not be covered because not premium has been paid
b. The mailing of the notice automatically cancels the policy after five days
c. The loss is covered because 15 days notice must be given by registered mail
d. The loss would be covered but only in proportion to the time the policy was in effect
c. The loss is covered because 15 days notice must be given by registered mail
Your client recently had a burglary, in the documents filed with the insurance company, she made a claim for a $12,000 TV set she never had. This is an example of:
a. Breach of Warranty
b. Fraud
c. Misrepresentation
d. Material Change
b. Fraud
Your clients building is insured against fire, with loss payable to Dogwood trust company as a mortgagee. The property is destroyed by fire, but, before he can file proof of loss, your client dies without a will and with no one to look after his affairs. A proof of loss may ne filed by:
a. No one
b. The insurance Company
c. The superintendent of insurance
d. The dogwood trust company
d. The dogwood trust company
Your client has made application for appraisal. The intent of the appraisal process is to settle the dispute between your client and the insured regarding:
a. The amount of the settlement being offered
b. The denial of insurance coverage under the policy
c. The right of the insured to purchase the salvage after an insured loss
d. The premium change for coverages being provided by the insurer
a. The amount of the settlement being offered
Under a policy of "fire" insurance, the insurer must make payments for a 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. One year from the dates the loss occurred
c. 60 days after the completion of the proof of loss, unless the contract provides a shorter period
When the insurer opts to repair, rebuild, or replace damaged property rather than make payment in the form of a cash settlement it 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 the intention to do so within 30 days after receipt of proof of loss
c. Seek the consent of the insured's mortgagee
d. Advise the insured's broker or agent of its decision
b. Provide the insured with written notice of the intention to do so within 30 days after receipt of proof of loss
This is the most common of errors and omissions claims, accounting for nearly 50% of all claims
a. Policy change errors
b. Processing delays
c. Cancellation of renewal errors
d. Inadequate coverage
d. Inadequate coverage
A physical hazard is:
a. A type of peril
b. The same as a moral hazard
c. A condition relating to the premises which may cause a peril to occur
d. The possibility of a loss due to the character of the insured
c. A condition relating to the premises which may cause a peril to occur
There is no one standard policy. Insurance companies provide consumers with a variety of operation or choices from which they can select the policy which is best for them. When you sell broad form of comprehensive form, your should advise the client that the policy insures:
a. All risks it is possible to assume, without exception
b. All risks, except earthquake and radioactive contamination
c. All risk, except theft from the interior of an unlocked car
d. All risks of direct physical loss or damage, subject to the policy conditions and exclusions
d. All risks of direct physical loss or damage, subject to the policy conditions and exclusions [Show Less]