Insurance Exam Test Qualification
with Correct Answers Rated A+
2025\2026 Version.
Which of the following best describes the Law of Large numbers theory?
a. Allows the insurer to determine who will have a peril affect them
b. Increases the probability using an analysis to allow the Insurer to determine what the annual
occurrence increase will be.
c. Increases the probability using an analysis to allow the Insurer to determine what the annual
occurrence decrease will be.
d. Decreases the probability using an analysis to allow the Insurer to determine what the annual
occurrence increase will be - Answer Increases the probability using an analysis to allow the
Insurer to determine what the annual occurrence increase will be.
What limit of Errors and Omissions Insurance must a broker carry? - Answer 500,000 with
2,000,000 aggregate limit
A building valued at $1,000,000 is insured for $500,000 in a policy containing a co-insurance
clause of 90%. An insured peril causes $150,000 worth of damage, how much would the insurer
pay? - Answer 83,333 minus applicable deductible
How many courses make up the Chartered Insurance Professional program and who offers it?
a. 12 courses offered through Insurance Brokers Association of Canada (IBAC)
b. 10 courses, 5 of which are mandatory, 3 are required and two elective; offered through
Insurance Council of Canada (AIC)
c. 10 courses, 5 of which are mandatory, 3 are elective and 2 are required
,A building valued at $200,000 is insured for $125,000 in a policy containing an 80% co-insurance
clause. The building is totally destroyed by the peril of fire. The insured will recover which of the
following amounts? - Answer 125,000.00
What statement is true about Travel Insurance?
a. Replaces general coverage
b. Covers expenses including expected pregnancy
c. In the event of a claim it would be used before other policies such as government and group
benefits
d. In the event of a claim, it is used after government and employer policies are exhausted -
Answer In the event of a claim, it is used after government and employer policies are
exhausted
When a building is insured for $100,000 and the policy contains an 80% coinsurance
requirement, what limit of insurance must the insured carry to be fully indemnified in the event
of a total loss? - Answer $100,000
A building insured for $40,000 is valued at $80,000. The policy contains an 80% coinsurance
requirement. When the claim amount is $65,000, how much will the insurer pay? - Answer
$40,000
Three people have equal ownership of a building valued at $360,000 they insured it for $90,000,
there is a co- insurance clause of 80%. The building is completely lost due to a fire, how much
would each of the owners get? - Answer $30,000
Any boiler operating equipment in excess of ___ PSI requires a Boiler & Machinery policy? -
Answer 15
A boiler at the hospital explodes, causing the hospital to catch fire and the result is a total loss
to the hospital. Which policy(ies) respond to the loss?
, c. Both the hospital Commercial policy and the Boiler policy will share the loss
d. The hospital's policy will respond and subrogate against the Boiler insurer - Answer Boiler
and Machinery policy's liability coverage will respond
Jill & Marty Jones host a house party, they have a basket in the kitchen where they have asked
all their guests to leave their car keys to prevent drinking and driving. One of the quests decides
he is fine to drive and sneaks into the kitchen and removes his keys from the basket. On his way
home he jumps the curb and takes out a fence a block from the party. Who is liable for the
damages to the fence? - Answer The homeowner who hosted the party
Farm insurance policies contain a "rebuilding clause", even if the property is not currently being
used for its intended purpose. This clause, called Deferred Loss Settlement Clause will pay:
a. ACV or 50% whichever is less if rebuilt 200' & within 9 months the insurer will pay
replacement cost plus interest
b. ACV or 50% whichever is less if rebuilt 300' & within 6 months the insurer pay replacement
cost plus interest
c. ACV or 75% whichever is less if rebuilt 200' & within 9 months the insurer pay replacement
cost
d. Buildings cannot qualify to be rebuilt under any property policy unless they are being built on
the same or its adjacent site - Answer ACV or 50% whichever is less if rebuilt 200' & within 9
months the insurer will pay replacement cost plus interest
Which is NOT true of surety?
a. Bought by the Obligee
b. A three party contract signed via seal
c. Never are losses expected or anticipated
with Correct Answers Rated A+
2025\2026 Version.
Which of the following best describes the Law of Large numbers theory?
a. Allows the insurer to determine who will have a peril affect them
b. Increases the probability using an analysis to allow the Insurer to determine what the annual
occurrence increase will be.
c. Increases the probability using an analysis to allow the Insurer to determine what the annual
occurrence decrease will be.
d. Decreases the probability using an analysis to allow the Insurer to determine what the annual
occurrence increase will be - Answer Increases the probability using an analysis to allow the
Insurer to determine what the annual occurrence increase will be.
What limit of Errors and Omissions Insurance must a broker carry? - Answer 500,000 with
2,000,000 aggregate limit
A building valued at $1,000,000 is insured for $500,000 in a policy containing a co-insurance
clause of 90%. An insured peril causes $150,000 worth of damage, how much would the insurer
pay? - Answer 83,333 minus applicable deductible
How many courses make up the Chartered Insurance Professional program and who offers it?
a. 12 courses offered through Insurance Brokers Association of Canada (IBAC)
b. 10 courses, 5 of which are mandatory, 3 are required and two elective; offered through
Insurance Council of Canada (AIC)
c. 10 courses, 5 of which are mandatory, 3 are elective and 2 are required
,A building valued at $200,000 is insured for $125,000 in a policy containing an 80% co-insurance
clause. The building is totally destroyed by the peril of fire. The insured will recover which of the
following amounts? - Answer 125,000.00
What statement is true about Travel Insurance?
a. Replaces general coverage
b. Covers expenses including expected pregnancy
c. In the event of a claim it would be used before other policies such as government and group
benefits
d. In the event of a claim, it is used after government and employer policies are exhausted -
Answer In the event of a claim, it is used after government and employer policies are
exhausted
When a building is insured for $100,000 and the policy contains an 80% coinsurance
requirement, what limit of insurance must the insured carry to be fully indemnified in the event
of a total loss? - Answer $100,000
A building insured for $40,000 is valued at $80,000. The policy contains an 80% coinsurance
requirement. When the claim amount is $65,000, how much will the insurer pay? - Answer
$40,000
Three people have equal ownership of a building valued at $360,000 they insured it for $90,000,
there is a co- insurance clause of 80%. The building is completely lost due to a fire, how much
would each of the owners get? - Answer $30,000
Any boiler operating equipment in excess of ___ PSI requires a Boiler & Machinery policy? -
Answer 15
A boiler at the hospital explodes, causing the hospital to catch fire and the result is a total loss
to the hospital. Which policy(ies) respond to the loss?
, c. Both the hospital Commercial policy and the Boiler policy will share the loss
d. The hospital's policy will respond and subrogate against the Boiler insurer - Answer Boiler
and Machinery policy's liability coverage will respond
Jill & Marty Jones host a house party, they have a basket in the kitchen where they have asked
all their guests to leave their car keys to prevent drinking and driving. One of the quests decides
he is fine to drive and sneaks into the kitchen and removes his keys from the basket. On his way
home he jumps the curb and takes out a fence a block from the party. Who is liable for the
damages to the fence? - Answer The homeowner who hosted the party
Farm insurance policies contain a "rebuilding clause", even if the property is not currently being
used for its intended purpose. This clause, called Deferred Loss Settlement Clause will pay:
a. ACV or 50% whichever is less if rebuilt 200' & within 9 months the insurer will pay
replacement cost plus interest
b. ACV or 50% whichever is less if rebuilt 300' & within 6 months the insurer pay replacement
cost plus interest
c. ACV or 75% whichever is less if rebuilt 200' & within 9 months the insurer pay replacement
cost
d. Buildings cannot qualify to be rebuilt under any property policy unless they are being built on
the same or its adjacent site - Answer ACV or 50% whichever is less if rebuilt 200' & within 9
months the insurer will pay replacement cost plus interest
Which is NOT true of surety?
a. Bought by the Obligee
b. A three party contract signed via seal
c. Never are losses expected or anticipated
