What is a renewal receipt?

Certificate attesting the insurance has extended for another term

Define proximate cause.

An immediate and effective cause of a loss

What is the insurer’s responsibility when terminating insurance?

Comply with all notice requirements

What is unique to an express contract within a principal-agent relationship?

Terms are specifically stated and agreed to by both parties

Which of the following is covered under the personal liability section of a Homeowners policy?

Vacant land in Canada that the insured rents

What duties are required of Brokers/Agents towards insurers?

Stay within the terms of the broker agreement

Who prepares a cover note and whom is it sent to?

Broker, sent to the insured with a copy to the insurer

Of the following underwriting factors, which is unique to a tenant’s policy application?

The amount of personal property insurance required

Which of the following applications are legally required to be signed?

Automobile insurance applications

Which of these statements is true concerning the insurance model?

The premium for each risk should be commensurate with that risk.

What is the main benefit of adding a Personal Articles endorsement to a property policy?

Many items insurable under this endorsement are covered on a valued basis

Which of the following is the best defence a broker or agent can use against an E&O claim?

Keeping detailed documentation of all conversations with clients

An agreement enforceable at law

Under a home insurance policy, what are EXCLUSIONS?

Risks, perils, or properties defined in the policy that are not covered

What is the purpose of Statutory conditions as laid out in provincial Insurance Acts?

Bind the insured & insurer by establishing rights/obligations for both

Where do shareholders of insurance stock companies seek a reasonable return on investment?

Underwriting profit and investment income

What makes speculative risk different from other risks?

Speculative risks have a chance of profit or loss.

Which is an exclusion in all parts of the liability section of a home insurance policy?

Criminal act by any person at the direction of an insured

Personal liability would cover which of the following circumstances?

Liability arising from daily activities which causes someone else harm

Which of the following types of losses are insured under a basic Homeowners policy?

Direct loss or damage resulting from a named peril

Concerning the Personal Articles Endorsement, which of the following statements is true?

It includes worldwide territorial limits.

What are the insurance industry’s TWO (2) basic categories?

Life and health insurance and general insurance

How does insurance serve as a form of security for an insured?

Peace of mind by substituting premium in place of uncertain loss

studbud

OTL Practice Exam #1

47 termsStudBud Administration1,502 plays

Imported from external platform

Flashcards47 cardsFPractice quizPHost liveL

Questions 47

Answers

1
Which piece of legislation is concerned with the registration and licensing of motor vehicles?
The Insurance Act
Highway Traffic Act
Civil Code of Quebec
The Insurance Companies Act
2
What loss would be where income & expense loss result from inability to use damaged property?
Direct Loss
Circumstancial Loss
Indirect Loss
Situational Loss
3
What is a renewal receipt?
Short-form certificate issued to insured with renewal instructions
Certificate confirming changes requested to take place on renewal
Certificate attesting the insurance has extended for another term
Short-form certificate signed by the insured to confirm renewal
4
How many days does newly acquired coverage for principal residence typically apply?
60-days
15-days
7-days
30-days
5
What is the purpose of all government regulation concerning the insurance industry?
Fair claims adjusting
Consumer protection
Easy accessibility
Fair pricing
6
Robbery, pilfering, holdup, and larceny are all terms used in the definition of…
Theft
Vandalism
Malicious mischief
Burglary
7
Who has auth to manage business in his territory, settle claims & appoint other agents?
Branch manager
Independent agent
Managing broker
General agent
8
Define proximate cause.
The last link in a chain of events
An imagined cause of a loss
An immediate and effective cause of a loss
The predetermined cause of a loss
9
Which is included for the Voluntary Compensation for Residence Employees coverage?
Loss of sight
Automobile accident benefits
Loss of income
Travel benefits
10
Which MUST have the provincial Statutory Conditions, or General Conditions, printed on it?
An interim cover note
A binder
An automobile insurance policy
An endorsement
11
What is the insurer’s responsibility when terminating insurance?
Calculate the return premium on a short rate basis
Send terminated policy to the insured’s agent
Retain the entire premium as security against unreported losses
Comply with all notice requirements
12
What is unique to an express contract within a principal-agent relationship?
Allows broker/agent to quickly bind coverage without insurer’s approval
Provides the broker/agent with claims settlement authority
Terms are stated verbally for no misunderstanding
Terms are specifically stated and agreed to by both parties
13
Which is included under the Dwelling Building coverage of the comprehensive Homeowners policy?
Lawns
Personal property
Building fixtures
Garden sheds
14
Which of the following is covered under the personal liability section of a Homeowners policy?
Vacant land in Canada that the insured rents
Land in the US on which a one-family residence is being built
Three-storey building the insured owns & operates a business
Land the insured rents to a farmer for grazing
15
Which section of a comprehensive Homeowners policy would cover a detached garage?
Personal Property
Dwelling Building
Detached Private Structures
Special Limits of Insurance
16
What duties are required of Brokers/Agents towards insurers?
Stay within the terms of the broker agreement
Bind the insurer on risks outside the broker’s binding authority
Deposit entire premium collected into operating bank account
Disclose client information to third party adjusters
17
Which coverage is NOT offered by a tenant’s policy?
Additional Living Expense
Property temporarily removed
Watercraft
Building
18
Which provides the BROADEST coverage that can be purchased?
Limited Perils Insurance
Fire & Extended Coverage Insurance
All-risks Insurance
Specified Perils Insurance
19
Who prepares a cover note and whom is it sent to?
Broker, sent to the insurer with a copy to the reinsurer
Broker, sent to the insured with a copy to the insurer
Insurer, sent to insured with a copy to the reinsurer
Bob from Accounting sends it to HR
20
Of the following underwriting factors, which is unique to a tenant’s policy application?
The location of the dwelling
The applicant’s claims history
The amount of personal property insurance required
How the apartment was constructed
21
Which carries a special limit to losses caused by all risks under a comprehensive Homeowners policy?
Jewellery
Spare automobile parts
Stamp and coin collections
Furs
22
To put the victim back to same financial position as they were before the loss
Actual cash value
Insurable interest
Indemnity
Replacement value
23
Which of the following applications are legally required to be signed?
Automobile insurance applications
Commercial property applications
Commercial liability applications
Personal property insurance applications
24
Which would be considered a legal entity under an insurance application?
Bobbie's Cycle Shop
Wen's Textiles LTD
Sky High Mountain Resort
Ocean's Bait Shop and Marina
25
Which of these statements is true concerning the insurance model?
The premium for each risk should be commensurate with that risk.
Those risks insured for higher amounts should pay lower rates
Risks more likely to have loss should pay max rate within risk category
Income of fund must have regulated surplus to meet payments
26
What is the main benefit of adding a Personal Articles endorsement to a property policy?
Offers coverage that is secondary to other property policies
Allows the insured to select their amount of future premium
Many items insurable under this endorsement are covered on a valued basis
The deductible for specified items is increased
27
What type of property is EXCLUDED while under a basic Homeowners policy?
Windows of a building normally occupied
Property on exhibit
Personal property being transported
Fixtures and fittings in seasonal storage
28
What happens to premiums collected by the broker or agent for any policies issued?
Held in a trust account
Held in an operating account
Retained to pay for future claims
Retained as the broker/agent’s commission
29
Which of the following is the best defence a broker or agent can use against an E&O claim?
Offering advice outside the broker’s area of competence
Communicating with underwriter for risks within the broker’s authority
Keeping detailed documentation of all conversations with clients
Recording notes from memory when filing policy docs
30
What is a contract?
A document describing the object of the agreement
Document outlining rights & duties included in agreement
An agreement enforceable at law
An invitation to enter into an agreement
31
Under a home insurance policy, what are EXCLUSIONS?
Restrictions regarding the relationship between the broker and the insured
Limitations of coverage on specified property
Risks and perils defined in the policy that are covered
Risks, perils, or properties defined in the policy that are not covered
32
What is the purpose of Statutory conditions as laid out in provincial Insurance Acts?
Outline the perils that are insured under the insurance contract
Describe exclusions to perils insured under the insurance contract
Set the minimum performance requirements of brokers and insurers
Bind the insured & insurer by establishing rights/obligations for both
33
Where do shareholders of insurance stock companies seek a reasonable return on investment?
Underwriting profit and earned premium
Underwriting profit and investment income
Subscribed capital and unearned premium
Subscribed capital and paid-up capital
34
Which org consists of co-operatives who are operating for the benefit of their own members?
Workers’ Compensation Boards
Government Insurers
Factory mutuals
Unemployment Insurance Plans
35
What makes speculative risk different from other risks?
Speculative risks result in insurable indirect property losses.
Speculative risks are insurable direct losses
Speculative risks have a chance of profit or loss.
Speculative risks have a chance of gain but no loss.
36
Which is an exclusion in all parts of the liability section of a home insurance policy?
Criminal act by any person at the direction of an insured
Accidental injury to a guest on the insured premises
Injury caused by anyone insured under the policy
Abuse committed without the insured’s knowledge
37
Personal liability would cover which of the following circumstances?
Liability for intentional injury occurring on own property
Injury caused by a refusal to assume liability by contract
Injury to members of the home caused by trespassers
Liability arising from daily activities which causes someone else harm
38
Which of the following would be insured by personal-lines insurance?
Automobile fleet
Private passenger automobile
Manufacturing plant
Office building
39
Which of the following types of losses are insured under a basic Homeowners policy?
Direct loss or damage resulting from a named peril
Indirect damage resulting from a named peril
Losses to buildings used for business
Losses inherent in the nature of the property itself
40
Failure to use the degree of care expected from a prudent/reasonable person
Physical hazard
Uninsurable risk
Negligence
Moral hazard
41
How often are insurance intermediaries’ licenses renewed?
Every year
Every five years
Every ten years
Every two years
42
Which of the following is unique to a legally binding insurance contract?
Legality of Purpose
Utmost Good Faith
Consent
Capacity to Contract
43
Which habitational forms is used by renters to insure personal property & personal liability?
Condominium policy
Basic rental property policy
Tenants policy
Basic homeowners policy
44
Which location does personal legal liability under a personal property policy provide coverage?
Canada only
Canada and the United States
North America
Anywhere in the world
45
Concerning the Personal Articles Endorsement, which of the following statements is true?
It includes worldwide territorial limits.
It is likely to be reinsured by insurers.
It does not have a policy limit.
It carries a high deductible.
46
What are the insurance industry’s TWO (2) basic categories?
Life and health insurance and general insurance
Automobile and fire insurance
Property and casualty insurance
Travel & sickness insurance and life & health insurance
47
How does insurance serve as a form of security for an insured?
Provides long term development in the economy
Granters of credit are better able to protect investments
Reduces the likelihood of severe, large losses
Peace of mind by substituting premium in place of uncertain loss

OTL Practice Exam #1 Flashcards | StudBud