FUNDAMENTALS OF INSURANCE
(BC) ACTUAL EXAM QUESTIONS
WITH DETAILED ANSWERS.
1. The following loss would be insured by the Homeowners' Comprehensive
Form (Form IBC 1155):
A. Theft of exotic birds.
B. Golf club broken from impact with a tree on the golf course.
C. Gun collected stolen while on display at local exhibition.
D. Breaking of building glass by a raccoon. - ANSWER D. Breaking of
building glass by a raccoon.
2. One of the perils insured under the Homeowners' Basic Form (IBC 1151) is
theft including damage caused by attempted theft. Although the coverage for
theft is very broad, there are limitations that apply to this peril. All of the
following losses are excluded, except one. Pick the exception:
A. Theft of the insured's camera during a sightseeing trip while
vacationing in Europe.
B. Theft of a diamond ring the insured had left in the laundry room and
to which the tenant had access.
C. Theft of a generator and other power tools from the insured's summer
cottage during a time when the cottage was unattended by the insured.
D. Loss of collector's music albums, which the insured had given to an
acquaintance to copy onto CD's, but which were never returned. -
ANSWER A. Theft of the insured's camera during a sightseeing trip
while vacationing in Europe.
,3. When one person, (the plaintiff), sues the other person, the defendant, for
damages, before awarding damages, the courts require the plaintiff to prove
all the following elements, except one. Pick the exception:
a. the defendant had a moral duty to defend the plaintiff’s well-
being
b. the defendant owed the plaintiff a legal duty of care
c. the defendant breached the legal duty of care
d. damages were suffered as the proximate result of the defendant's action -
ANSWER a. the defendant had a moral duty to defend the plaintiff’s well-being
4. Insurance plays an important role in managing financial risk. The main
purpose of Insurance is to:
A. Enable the consumer to obtain loan or mortgage.
B. Provide employment and investment capital.
C. Allow spread of risk.
D. Reduce losses through loss prevention and loss reduction. -
ANSWER C. Allow spread of risk.
5. When the insurer terminates an insurance policy, ALL of the following
conditions apply, EXCEPT one. Pick the exception:
A. The insured is entitled to 15 days' written notice of termination sent by
registered mail of 5 days' written notice personally delivered.
B. The refund due to the insured shall be calculated on a short rate basis.
C. Unless otherwise stated, the refund shall accompany the notice of
termination.
D. The refund shall be in the form of money, postal or express company
money order or cheque payable at par. - ANSWER B. The refund due
to the insured shall be calculated on a short rate basis.
,6. The major function of insurance is to:
A. Reduce the cost of losses.
B. Share the losses of the few among many.
C. Safeguard the interest of the mortgagees
D. Serve as the basis of the existing credit system. - ANSWER B. Share
the losses of the few among many.
7. Under the policy of "fire" insurance, the insurer would be obligated to pay
the following loss only:
A. Fire damage caused to appliance following a sudden power surge.
B. Fire damage to insured buildings occurring during a rebellion.
C. Damage to insured property due to radioactive contamination.
D. Loss of property caused by a process involving the application of heat.
- ANSWER B. Fire damage to insured buildings occurring during a
rebellion.
8. Generally, all of the following, except one, are seen to be "incompetent" or
lacking the legal capacity to contract. Pick the exception:
A. A corporation.
B. A child.
C. A trade name.
D. A senile person. - ANSWER A. A corporation.
9. The premium for a "single trip" travel policy is based on all the following
factors, except one.
a. the distance between the applicant’s home address and the
final destination
b. the number of days the applicant is travelling
, c. the number of persons insured under the travel policy
d. the age and medical condition of the applicant. - ANSWER a.
the distance between the applicants home address and the
final destination
10.The following statements apply to Own Damage Coverages are true except
one. Pick the Exception:
A. The insured must promptly notify ICBC of any loss or damage.
B. When there is a loss or damage to the insured automobile, the insured
must take all reasonable steps to protect the vehicle from further loss.
C. When the claim involves the theft of the insured automobile, a report
must be filed with policy within 48 hours of discovery.
D. Permission is automatically provided for insureds to make any
temporary repairs considered necessary to drive the insured vehicle to
a repair shop, garage or other place where repairs are to be completed.
- ANSWER D. Permission is automatically provided for insureds to
make any temporary repairs considered necessary to drive the insured
vehicle to a repair shop, garage or other place where repairs are to be
completed.
11.Basic Autoplan provides owners of vehicles of the private passenger type
with the following limit of third party liability coverage:
A. $50,000
B. $200,000
C. $500,000
D. $1,000,000 - ANSWER B. $200,000
12.Yesterday, the insured parked her automobile in an outdoor lot at a local
mall. It was struck by a hit-and-run driver. Damage caused to the rear fender
was $1150. The insured does not have Own Damage Coverage. However,
(BC) ACTUAL EXAM QUESTIONS
WITH DETAILED ANSWERS.
1. The following loss would be insured by the Homeowners' Comprehensive
Form (Form IBC 1155):
A. Theft of exotic birds.
B. Golf club broken from impact with a tree on the golf course.
C. Gun collected stolen while on display at local exhibition.
D. Breaking of building glass by a raccoon. - ANSWER D. Breaking of
building glass by a raccoon.
2. One of the perils insured under the Homeowners' Basic Form (IBC 1151) is
theft including damage caused by attempted theft. Although the coverage for
theft is very broad, there are limitations that apply to this peril. All of the
following losses are excluded, except one. Pick the exception:
A. Theft of the insured's camera during a sightseeing trip while
vacationing in Europe.
B. Theft of a diamond ring the insured had left in the laundry room and
to which the tenant had access.
C. Theft of a generator and other power tools from the insured's summer
cottage during a time when the cottage was unattended by the insured.
D. Loss of collector's music albums, which the insured had given to an
acquaintance to copy onto CD's, but which were never returned. -
ANSWER A. Theft of the insured's camera during a sightseeing trip
while vacationing in Europe.
,3. When one person, (the plaintiff), sues the other person, the defendant, for
damages, before awarding damages, the courts require the plaintiff to prove
all the following elements, except one. Pick the exception:
a. the defendant had a moral duty to defend the plaintiff’s well-
being
b. the defendant owed the plaintiff a legal duty of care
c. the defendant breached the legal duty of care
d. damages were suffered as the proximate result of the defendant's action -
ANSWER a. the defendant had a moral duty to defend the plaintiff’s well-being
4. Insurance plays an important role in managing financial risk. The main
purpose of Insurance is to:
A. Enable the consumer to obtain loan or mortgage.
B. Provide employment and investment capital.
C. Allow spread of risk.
D. Reduce losses through loss prevention and loss reduction. -
ANSWER C. Allow spread of risk.
5. When the insurer terminates an insurance policy, ALL of the following
conditions apply, EXCEPT one. Pick the exception:
A. The insured is entitled to 15 days' written notice of termination sent by
registered mail of 5 days' written notice personally delivered.
B. The refund due to the insured shall be calculated on a short rate basis.
C. Unless otherwise stated, the refund shall accompany the notice of
termination.
D. The refund shall be in the form of money, postal or express company
money order or cheque payable at par. - ANSWER B. The refund due
to the insured shall be calculated on a short rate basis.
,6. The major function of insurance is to:
A. Reduce the cost of losses.
B. Share the losses of the few among many.
C. Safeguard the interest of the mortgagees
D. Serve as the basis of the existing credit system. - ANSWER B. Share
the losses of the few among many.
7. Under the policy of "fire" insurance, the insurer would be obligated to pay
the following loss only:
A. Fire damage caused to appliance following a sudden power surge.
B. Fire damage to insured buildings occurring during a rebellion.
C. Damage to insured property due to radioactive contamination.
D. Loss of property caused by a process involving the application of heat.
- ANSWER B. Fire damage to insured buildings occurring during a
rebellion.
8. Generally, all of the following, except one, are seen to be "incompetent" or
lacking the legal capacity to contract. Pick the exception:
A. A corporation.
B. A child.
C. A trade name.
D. A senile person. - ANSWER A. A corporation.
9. The premium for a "single trip" travel policy is based on all the following
factors, except one.
a. the distance between the applicant’s home address and the
final destination
b. the number of days the applicant is travelling
, c. the number of persons insured under the travel policy
d. the age and medical condition of the applicant. - ANSWER a.
the distance between the applicants home address and the
final destination
10.The following statements apply to Own Damage Coverages are true except
one. Pick the Exception:
A. The insured must promptly notify ICBC of any loss or damage.
B. When there is a loss or damage to the insured automobile, the insured
must take all reasonable steps to protect the vehicle from further loss.
C. When the claim involves the theft of the insured automobile, a report
must be filed with policy within 48 hours of discovery.
D. Permission is automatically provided for insureds to make any
temporary repairs considered necessary to drive the insured vehicle to
a repair shop, garage or other place where repairs are to be completed.
- ANSWER D. Permission is automatically provided for insureds to
make any temporary repairs considered necessary to drive the insured
vehicle to a repair shop, garage or other place where repairs are to be
completed.
11.Basic Autoplan provides owners of vehicles of the private passenger type
with the following limit of third party liability coverage:
A. $50,000
B. $200,000
C. $500,000
D. $1,000,000 - ANSWER B. $200,000
12.Yesterday, the insured parked her automobile in an outdoor lot at a local
mall. It was struck by a hit-and-run driver. Damage caused to the rear fender
was $1150. The insured does not have Own Damage Coverage. However,
