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FUNDAMENTALS OF INSURANCE LEVEL 1 PRACTICE EXAM QUESTIONS ACCURATELY ANSWERED AND RATED A
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FUNDAMENTALS OF INSURANCE LEVEL 1 PRACTICE EXAM QUESTIONS ACCURATELY ANSWERED AND RATED A
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FUNDAMENTALS OF INSURANCE LEVEL 1PRACTICE EXAM QUESTIONS ACCURATELY
ANSWERED AND RATED A.
The insurance meaning given to "risk refers to the:
a. Chance of financial loss to which the object of insurance may be exposed.
b. Subject of insurance.
c. Potential for a peril to occur.
Verified Answer -a
Risk selection is based on the Underwriter's assessment of the hazards
pertaining to the risk that has been submitted for insurance. An underwriter
must determine whether or not there is a potential Moral Hazard. The
following does not apply as a condition indicating the presence of a Moral
Hazard:
a. The moral character of the applicant for insurance.
b. The financial condition of the applicant for insurance.
c. The physical condition of the premises which may cause a loss to occur
d. The indifference to loss of the applicant for insurance
Verified Answer -b
A warranty is a:
a. Promise by the broker to remit premiums to the insurer in accordance
with the terms stated in the Agency Agreement
,b. Guarantee of insureds that certain facts are truly as they are represented
to be and that they will remain so.
c. Piece of paper similar to an Endorsement which makes changes to the
policy.
d. Promise by the insurer to make payment of all claims submitted to it
within a 21 day period.
Verified Answer -b
Which of the following statements is true when a Standard Mortgage Clause
is attached to a policy?
a. The insurer could be called upon to pay a loss to the mortgagee, even
though the insured violated a policy or other condition.
b. The insurer can reduce coverage at any time at the request of the insured,
even though the insured violated a policy of other condition.
c. The insurer may cancel the policy at any time by providing the mortgagee
with seven days' notice by registered mail.
d. Neither the insured nor the insurer may cancel the policy until the
mortgage has been paid off.
Verified Answer -a
Insurers are fiduciaries and, therefore, must comply with government
regulations that set out the fiduciary responsibility in terms of handling the
monies paid by insureds. Under these regulations insurers are required to...
a. Report to the Superintendent the income earned from premium
investments.
b. Maintain accurate records of claims pending and paid
c. Hold the unearned portion of the premiums in trust.
,d. Hold the entire annual premium in trust until the expiry of the policy.
Verified Answer -c
The Homeowners' Comprehensive Form (IBC 1155) insures the following
loss or damage only:
a. Loss to sporting equipment during its use.
b. Damage caused by birds
c. Breakdown of dishwasher motor.
d. Damage due to smoke from a fireplace.
Verified Answer -d
Under the Homeowners' Basic Form (IBC 1151) the following loss is not
insured:
a. Roof damage caused by falling object which strikes the dwelling building.
b. Damage caused to the dwelling building by an automobile driven by a
neighbour
c. Wind damage to building siding.
d. Damage caused by vandalism to a dwelling building in the course of
construction.
Verified Answer -d
The following claim would be insured by the Homeowners' Basic Form (IBC
1151) under the peril of theft:
a. Theft of insured's registered black Labrador dog.
b. Damage to door and lock by persons attempting to break-in to the
insured's dwelling.
, c. Theft of personal property from a seasonal dwelling owned by the insured
and which had not been occupied by the insured for almost two months.
d. Theft of building materials from site of insured's new dwelling prior to its
completion.
Verified Answer -b
Under the Homeowners' Basic Form (IBC 1151) only the following loss is
covered:
a. Water hammer.
b. Damage to a garage door caused by a vehicle driven by the insured.
c. Smoke damage due to the faulty operation of the basement furnace
d. Sewer back-up
Verified Answer -c
The emergency removal coverage provided by the Mobile Home Insurance
Form insures all of the following, except one. Pick the exception.
a. Cost to disconnect water services
b. Cost to disconnect power services
c. Towing or transporting costs
d. Cost to repair damage caused during moving.
Verified Answer -d
The Additional Living Expense coverage provided under the Homeowners'
Forms pays:
a. Those increased costs only, if any, for temporary accommodations
occupied by the insured after an insured loss.
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