Insurance Policy Quiz

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which statement describes the requirements under the Fire Statutory Condition—Termination when an insured requests the termination of insurance?

The insured has 30 days to arrange other coverage.

The insured must provide at least ten days’ advance notice to the insurer.

The insurer must send written confirmation of cancellation, including any premium refund as soon as practicable. (correct)

The insured is entitled to a premium refund immediately from the insurer, calculated on a full-term premium basis.

Which policy would protect an insured against a loss caused by a dishonest employee?

Burglary policy

Fidelity policy (correct)

Theft policy

Robbery policy

Which statement describes how coverage is provided by a comprehensive homeowners policy?

It is an all-risks policy and coverage is determined by the listed exclusions.

It provides coverage for only new construction homes.

It provides all-risks coverage on buildings and named-perils coverage on contents. (correct)

There are no exclusions contained in the policy.

When would physical damage and liability insurance for boats be covered by a homeowners policy?

Physical damage and liability coverage are automatically included for some types of larger owned pleasure boats. Signup and view all the answers

Which peril is covered under a basic homeowners policy?

Riot Signup and view all the answers

What is an example of a speculative risk?

Gambling Signup and view all the answers

What type of manufactured home might be listed on an automobile policy?

A unit that remains mobile Signup and view all the answers

What are the four optional own damage coverages?

Collision, specified perils, comprehensive, and all perils Signup and view all the answers

Which act governs the automobile statutory conditions?

The Insurance Act Signup and view all the answers

What is defined as indirect damage resulting from physical damage to a dwelling by an insured peril causing a change in temperature?

Loss due to temperature change Signup and view all the answers

What coverage is included under the extension of coverage for property temporarily removed in a tenants policy?

Personal property of a student temporarily living away from home Signup and view all the answers

Which section of a policy states the commencement date, term, and expiry date?

Coverage summary Signup and view all the answers

What is the aggregate limit of a CGL policy?

The maximum total amount that can be paid out in actual claims during a policy year. Signup and view all the answers

Why would Peter’s request to reduce his third-party liability limit on his automobile policy be refused?

Liability limits cannot be purchased below the mandatory minimum of $200,000 in NB. Signup and view all the answers

In the event of a loss, which section of a condominium owner's insurance would provide coverage for custom-made closet organizers?

The unit owner’s improvements and betterments coverage Signup and view all the answers

Which insurance distribution system utilizes an independent sales force that represents multiple companies?

Independent brokerage Signup and view all the answers

What term describes silence where there is an obligation to speak?

Non-disclosure Signup and view all the answers

If Greta has $300,000 third-party liability coverage but causes an accident in Nova Scotia, what amount would her insurer have to pay?

The policy’s $300,000 limit Signup and view all the answers

Who is responsible for evaluating risk and determining its eligibility for insurance coverage?

Underwriters Signup and view all the answers

What is a binder in insurance terms?

A written/oral agreement pending formal policy documents Signup and view all the answers

Who utilizes data to create rates for different risk classes to ensure fair premium calculations?

Actuaries Signup and view all the answers

What is another term used for a request for insurance?

An application Signup and view all the answers

Which type of act would typically be covered by a liability insurance policy?

Negligent acts Signup and view all the answers

What is a manuscript wording?

A policy written on a custom basis for a specific situation Signup and view all the answers

Will Warren's insurance company pay for the damage to his car after he was convicted of driving under the influence?

No, this is excluded due to his conviction under the criminal code Signup and view all the answers

Which situation would be covered by the personal liability section of a homeowners policy?

While driving a golf cart, the insured accidentally injures another golfer Signup and view all the answers

Additional costs associated with complying with laws during repairs after a loss are insured by which type of coverage?

The bylaw endorsement Signup and view all the answers

Which legislation is enforced by the Office of the Superintendent of Financial Institutions (OSFI)?

The Insurance Companies Act Signup and view all the answers

What are the two basic categories into which the insurance business is divided?

Property insurance and Casualty insurance Signup and view all the answers

What do condominium unit purchasers own?

Clear and full ownership of a specific unit within a building and a shared interest in the common elements Signup and view all the answers

What relationship do agents and brokers have with the premiums they collect?

They hold the funds in trust on behalf of the insurers Signup and view all the answers

Which item may be scheduled on a personal articles endorsement of a homeowner’s policy?

Musical instruments Signup and view all the answers

What should your client do to insure items of historical value?

Insure the items with a broker who specializes in items of historical significance. Signup and view all the answers

What type of information is found in the coverage summary?

Perils insured against Signup and view all the answers

What are the three decisions an underwriter can make about a risk?

Accept the risk; Reject the risk; Accept the risk with conditions Signup and view all the answers

Which optional coverage is offered under Section C—Loss or Damage Coverage (Automobile)?

Comprehensive Signup and view all the answers

What coverage is provided by a basic homeowner’s policy?

Named-perils coverage for buildings, personal property, and additional living expenses. Signup and view all the answers

Which section of a homeowners policy provides coverage for damage or injury caused to others?

Personal Liability Signup and view all the answers

What are the sections of insurance coverage in a tenant’s policy?

Personal property; Personal liability; Improvements and betterments Signup and view all the answers

Which province requires individuals to have a licence to operate as an insurance intermediary?

All provinces and territories Signup and view all the answers

What type of business interruption insurance is preferred if a business remains affected after reopening?

Income Replacement; Earnings Signup and view all the answers

Which section of a homeowners policy would cover a housekeeper who injures herself while working in the home?

Voluntary Compensation for Residence Employees Signup and view all the answers

What is the author of a defamatory letter published in a newspaper guilty of?

Libel Signup and view all the answers

What exposure does the Non-owned Automobile policy cover?

Employees using their personal vehicles for purposes of their employer’s business Signup and view all the answers

Which optional ‘own damage’ coverages are available in NB?

Specified perils, named perils, collision and upset, and all perils Signup and view all the answers

Which homeowners property policy provides all-risks coverage for direct physical loss or damage?

A comprehensive homeowners policy Signup and view all the answers

Who is responsible for federal licensing and supervision of insurance companies?

The Office of the Superintendent of Financial Institutions (OSFI) Signup and view all the answers

Signup and view all the answers

Study Notes

Insurance Exam Questions and Answers

Violations by Brokers/Agents: If a broker/agent is aware of undisclosed information on an application and doesn't disclose it, they violate the doctrine of utmost good faith.
Client Needs and Coverage: A risk exposure analysis by a broker is crucial to identify client exposures and provide suitable coverage. Failure to explain policy clauses (like coinsurance and deductibles) is a deficiency.
Assignments: Assignments of assets to an executor or administrator of a will are permissible without insurer consent. Assignments associated with property sales might need consent.
Homeowners Cemetery Liability: Policy coverage for cemetery plots is often added by endorsement; it is not typically included in premises coverage.
Insured Perils and Proximate Cause: Insurers pay losses due to insured perils. The proximate cause (the most direct link) is the cause the insurer must cover.
Insurance Policy Conditions: Statutory conditions are legally-required provisions for all home insurance policies.
Last Link in Event Chain: The proximate cause is the closest link in the event chain leading to a loss.
Tenant's Liability: Tenant's legal liability insurance covers tenant damages to the building or premises, not damages caused to the tenant by the property owner.
Additional Conditions-Parts: If a property consists of several parts, the loss or damage to one part might not necessarily mean the insurer will pay for a loss or damage of the entire property. Each part must be examined separately.
Contribution: The sharing of insurance responsibilities among multiple companies covering similar risks.
Commissions: Intermediaries are paid commissions, typically a portion of the policy premium, which might or might not include a referral fee.
Flood vs. Other Water: Traditionally, "flood" specifically relates to large bodies of water like oceans.
Risk Management Process: Risk management provides benefits to intermediaries like client retention and improved sales techniques by pre-screening clients more efficiently.
Defamation: Libel is the written form of defamation, while slander is the spoken form.
Vehicle Operator Qualifications (Recreational Vehicles): Use of recreational vehicle endorsements must comply with usage, operator, and statutory requirements—especially when operating off public roads.
Product Liability: Manufacturing companies could be responsible for damages caused by their products regarding property and bodily injury damages as a manufacturer.
Fire Statutory Condition: Termination requires a specific written confirmation of termination from the insurer and premium refund.
Employee Dishonesty: A policy feature, like Fidelity coverage, protects against dishonest employee actions by covering losses.
Homeowners Policy Coverage: A comprehensive homeowner's policy offers coverage under the all risk, meaning virtually any loss is covered, except the losses stated in the exclusions part of the policy.
Boat Coverage with Homeowners Policy: Usually, liability and physical damage coverage applies to smaller boats.
Speculative Risk: Speculative risks are possible situations with both profit and loss potential, such as investments and gambling, vs. pure risks such as physical injury, or accidental death.
Manufactured Home Coverage: A mobile home placed on a permanent foundation might be covered on an auto policy.
Water Terminology: "Ground water" is water usually found beneath the earth's surface.
Manuscript Wording: Policies written specifically for a client's circumstances, rather than standardized forms.
Condominium Ownership: Condominium purchasers have ownership of their unit; they also share ownership of commonly used areas.
Statutory Conditions– Automobile insurance policies are regulated by certain legislation (often called “statutory conditions” ) that spell out the terms and conditions for coverage.
Insurance Companies Act: This legislation regulates how insurance companies operate and interact with the public.
Broker Obligations: Brokers must act in the best interests of their clients and disclose relevant facts to insurers.
Residential Home Insurance: Insurers look for similar reasons to assess risks in terms of damages that might occur for any type of property. The more similar the circumstances and conditions the more similar the risk and the premium paid in terms of insurance.
Tenant's Loss: Tenant's legal liability insurance covers any direct loss or damage a tenant causes to the property they are renting and/or the contents of the property.
Policy Sections: Coverage summaries in property insurance policies provide a summary of perils, exclusions, and required conditions for the coverage to be applicable.
Adjusters: Duties of claims examiners include investigating claims, settlement negotiations, and providing benefit payments from insurance policies.
Premium and Rates: Premium and rate calculations are often determined by an analysis of risk factors.
Coverage for Damage/Insurance of Property: Property damage covers damages to the building or the property's contents, while property's liability covers injuries caused to a property.
Policy Requirements and Conditions: Homeowners insurance policies list all the conditions, and exclusions for the coverage to be applicable.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge on various insurance policies and their statutory conditions. This quiz covers topics such as homeowners insurance, automobile policies, and coverage specifics. Perfect for individuals in the insurance industry or studying insurance principles.