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Practice Exam 2: Fundamentals of Insurance: Level 1. Questions and
Answers with Solutions UPDATED!!!
A captive or exclusive agents is someone who sells the products
of one insurance company only. For this reason they are not
required to be licensed in their province. - ANSWER False.
A certificate of Insurance issued by an insurance company
serves as confirmation that there is an insurance policy in place
for a person or business. It will usually contain a brief overview
of the amounts and types of insurance purchased and the
premium charged. In addition, the Certificate will normally
include the agreement of the insurer to notify the party of
interest should the policy be cancelled. - ANSWER True.
A dollar amount deductible is the most common form of
deductible used in the property policies. Today, these
deductibles are less than they were just a few years ago. -
ANSWER False.
A Non-waiver Agreement is used when the adjuster wants to
proceed in the investigation of the claim, but does not want to
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prejudice the right of the insurer to deny the claim later in that
is what - ANSWER
A rider is used primarily to insure mobile property that moves
from one location to another. It is different from a floater that is
used solely to insure waterborne property. - ANSWER False.
Agency Agreements will usually vary among insurers.
Nevertheless, ever Agreement should clearly address the main
responsibilities of the brokerage and the insurance company,
being sure to cover all of the following points: Indicate classes
of insurance business that can be solicited...e.g) home,
automobile, commercial businesses of up to a certain size,
specialty risks; etc; state amount of the commissions
for each type of insurance policy to be paid to the brokerage,
outline who is responsible for collecting insurance premiums
and when they are due to be paid to the insurance company,
details regarding how the premium trust account is to be set up,
indication of the binding authority the brokerage has for the
various classes of business. - ANSWER True.
All insurance policies contain conditions. A condition essentially
tells the insured what they should and should not do. When the
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insured breaches a condition, coverage can be denied when the
breach of condition is directly related to the cause of the loss. -
ANSWER True.
All risk policies describe their coverage as providing insurance
for all risks of direct physical loss or damage. Other all risk
policies indicate that insurance is provided for damage however
caused. These are just two ways to describe the same coverage.
- ANSWER True.
An exclusion in an insurance policy refers to losses that are not
insured by them. However, there are many property insurance
policies that have np exclusions at all. - ANSWER False.
Approximate and immediate cause will always be the same for
every loss. - ANSWER False.
By the terms of the Standard Mortgage Clause, mortgagees are
entitled to payment under a property insurance policy even
when the insureds themselves are denied insurance coverage. -
ANSWER True.
Practice Exam 2: Fundamentals of Insurance: Level 1. Questions and
Answers with Solutions UPDATED!!!
A captive or exclusive agents is someone who sells the products
of one insurance company only. For this reason they are not
required to be licensed in their province. - ANSWER False.
A certificate of Insurance issued by an insurance company
serves as confirmation that there is an insurance policy in place
for a person or business. It will usually contain a brief overview
of the amounts and types of insurance purchased and the
premium charged. In addition, the Certificate will normally
include the agreement of the insurer to notify the party of
interest should the policy be cancelled. - ANSWER True.
A dollar amount deductible is the most common form of
deductible used in the property policies. Today, these
deductibles are less than they were just a few years ago. -
ANSWER False.
A Non-waiver Agreement is used when the adjuster wants to
proceed in the investigation of the claim, but does not want to
, Page |2
prejudice the right of the insurer to deny the claim later in that
is what - ANSWER
A rider is used primarily to insure mobile property that moves
from one location to another. It is different from a floater that is
used solely to insure waterborne property. - ANSWER False.
Agency Agreements will usually vary among insurers.
Nevertheless, ever Agreement should clearly address the main
responsibilities of the brokerage and the insurance company,
being sure to cover all of the following points: Indicate classes
of insurance business that can be solicited...e.g) home,
automobile, commercial businesses of up to a certain size,
specialty risks; etc; state amount of the commissions
for each type of insurance policy to be paid to the brokerage,
outline who is responsible for collecting insurance premiums
and when they are due to be paid to the insurance company,
details regarding how the premium trust account is to be set up,
indication of the binding authority the brokerage has for the
various classes of business. - ANSWER True.
All insurance policies contain conditions. A condition essentially
tells the insured what they should and should not do. When the
, Page |3
insured breaches a condition, coverage can be denied when the
breach of condition is directly related to the cause of the loss. -
ANSWER True.
All risk policies describe their coverage as providing insurance
for all risks of direct physical loss or damage. Other all risk
policies indicate that insurance is provided for damage however
caused. These are just two ways to describe the same coverage.
- ANSWER True.
An exclusion in an insurance policy refers to losses that are not
insured by them. However, there are many property insurance
policies that have np exclusions at all. - ANSWER False.
Approximate and immediate cause will always be the same for
every loss. - ANSWER False.
By the terms of the Standard Mortgage Clause, mortgagees are
entitled to payment under a property insurance policy even
when the insureds themselves are denied insurance coverage. -
ANSWER True.
