Page 1 of 10
FUNDAMENTALS OF INSURANCE (BC) ACTUAL EXAM 2026 LATEST QUESTIONS
AND CORRECT VERIFIED ANSWERS GRADED A+ 2026
When the insurer has indemnified the insured for a loss caused by a third party, the insurer has a
legal right of recovery from that party. This legal process is referred to as
a. Arbitration
b. Restitution
c. Subrogation
d. Mediation
c. Subrogation
The Insurance Act provides that a policy insuring the peril of "fire" must also include coverage for
a. Windstorm and Lightning
b. Lightning, including damage to electrical appliances and devices
c. Lightning and all types of Explosions
d. Explosion of natural, coal or manufactured gas and Lightning, excluding damage to electrical
appliances and devices
d. Explosion of natural, coal or manufactured gas and Lightning, excluding damage to electrical
appliances and devices
Only one of the following statements regarding Statutory Condition No. 1 — Misrepresentation is
correct
a. Any description of the property that proves to be incorrect constitutes a Misrepresentation
b. Withholding information about previous cancellations or refusal of insurance is not a
Misrepresentation
c. Statements made by the applicant, which lead the insurer to believe that the risk is better than it
actually is, are considered Misrepresentation
d. A Misrepresentation has no effect whatsoever on the coverage under the policy,
even when the insurer is able to prove misrepresentation
c. Statements made by the applicant, which lead the insurer to believe that the risk is better than it
actually is, are considered Misrepresentation
Insurance plays an important role in managing financial risk. The main purpose of Insurance is to
a. Enable the consumer to obtain a loan or a mortgage
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b. Provide employment and investment capital
c. Allow the spread of risk
d. Reduce losses through loss prevention and loss reduction
a. Allow the spread of risk
The definition of insurance in the Insurance Act includes all of the following important points,
except one. Pick the exception:
a. Payment is made only when a certain peril has damaged the object of insurance
b. Payment is limited to the actual amount of the loss — no more and no less
c. There is no payment for losses that are deliberately caused by an insured
d. The indemnity must always be in the form of a sum of money; no other method is permitted by
law
a. The indemnity must always be in the form of a sum of money; no other method is permitted by
law
The majority of insurance companies use independent brokers to sell their insurance policies to
the public. Which of the following statements does NOT apply to this system of distribution?
a. Independent brokers are employees of the insurance companies they represent
b. Independent brokers receive commissions from their insurers for the business they produce
c. Independent brokers can represent more than one insurance company
d. Independent brokers own all of their client files
a. Independent brokers are employees of the insurance companies they represent
When dealing with financial risk a person has several options available. In your opinion, which of
the following is the best option for most people?
a. Avoidance of risk
b. Retention of the risk
c. Controlling the risk
d. Transfer of the risk
a. Transfer of the risk
Risk as the "chance of financial loss" can be classified as either speculative or pure. Which of the
following best describes the meaning of pure risk?
a. There is no chance of financial loss
FUNDAMENTALS OF INSURANCE (BC) ACTUAL EXAM 2026 LATEST QUESTIONS
AND CORRECT VERIFIED ANSWERS GRADED A+ 2026
When the insurer has indemnified the insured for a loss caused by a third party, the insurer has a
legal right of recovery from that party. This legal process is referred to as
a. Arbitration
b. Restitution
c. Subrogation
d. Mediation
c. Subrogation
The Insurance Act provides that a policy insuring the peril of "fire" must also include coverage for
a. Windstorm and Lightning
b. Lightning, including damage to electrical appliances and devices
c. Lightning and all types of Explosions
d. Explosion of natural, coal or manufactured gas and Lightning, excluding damage to electrical
appliances and devices
d. Explosion of natural, coal or manufactured gas and Lightning, excluding damage to electrical
appliances and devices
Only one of the following statements regarding Statutory Condition No. 1 — Misrepresentation is
correct
a. Any description of the property that proves to be incorrect constitutes a Misrepresentation
b. Withholding information about previous cancellations or refusal of insurance is not a
Misrepresentation
c. Statements made by the applicant, which lead the insurer to believe that the risk is better than it
actually is, are considered Misrepresentation
d. A Misrepresentation has no effect whatsoever on the coverage under the policy,
even when the insurer is able to prove misrepresentation
c. Statements made by the applicant, which lead the insurer to believe that the risk is better than it
actually is, are considered Misrepresentation
Insurance plays an important role in managing financial risk. The main purpose of Insurance is to
a. Enable the consumer to obtain a loan or a mortgage
, Page 2 of 10
b. Provide employment and investment capital
c. Allow the spread of risk
d. Reduce losses through loss prevention and loss reduction
a. Allow the spread of risk
The definition of insurance in the Insurance Act includes all of the following important points,
except one. Pick the exception:
a. Payment is made only when a certain peril has damaged the object of insurance
b. Payment is limited to the actual amount of the loss — no more and no less
c. There is no payment for losses that are deliberately caused by an insured
d. The indemnity must always be in the form of a sum of money; no other method is permitted by
law
a. The indemnity must always be in the form of a sum of money; no other method is permitted by
law
The majority of insurance companies use independent brokers to sell their insurance policies to
the public. Which of the following statements does NOT apply to this system of distribution?
a. Independent brokers are employees of the insurance companies they represent
b. Independent brokers receive commissions from their insurers for the business they produce
c. Independent brokers can represent more than one insurance company
d. Independent brokers own all of their client files
a. Independent brokers are employees of the insurance companies they represent
When dealing with financial risk a person has several options available. In your opinion, which of
the following is the best option for most people?
a. Avoidance of risk
b. Retention of the risk
c. Controlling the risk
d. Transfer of the risk
a. Transfer of the risk
Risk as the "chance of financial loss" can be classified as either speculative or pure. Which of the
following best describes the meaning of pure risk?
a. There is no chance of financial loss
