FUNDAMENTALS OF INSURANCE (BC) QUESTIONS WITH CORRECT ANSWERS 2025

FUNDAMENTALS OF INSURANCE (BC)
QUESTIONS WITH CORRECT ANSWERS
2025
InsuranceFplaysFanFimportantFroleFinFmanagingFfinancialFrisk.FTheFmainFpurposeFofFInsuranceFisFto:



A.FEnableFtheFconsumerFtoFobtainFloanForFmortgage.
F



B.FProvideFemploymentFandFinvestmentFcapital.
F



C.FAllowFspreadFofFrisk.
F



D.FReduceFlossesFthroughFlossFpreventionFandFlossFreduction.F-FCORRECTFANSWERF-
F

C.FAllowFspreadFofFrisk.



WhenFtheFinsurerFterminatesFanFinsuranceFpolicy,FALLFofFtheFfollowingFconditionsFapply,FEXCEPTFone.FPickF
theFexception:



A.FTheFinsuredFisFentitledFtoF15Fdays'FwrittenFnoticeFofFterminationFsentFbyFregisteredFmailFofF5Fdays'Fwritte
nFnoticeFpersonallyFdelivered.

B.FTheFrefundFdueFtoFtheFinsuredFshallFbeFcalculatedFonFaFshortFrateFbasis.

C.FUnlessFotherwiseFstated,FtheFrefundFshallFaccompanyFtheFnoticeFofFtermination.

D.FTheFrefundFshallFbeFinFtheFformFofFmoney,FpostalForFexpressFcompanyFmoneyForderForFchequeFpayableFa
tFpar.F-FCORRECTFANSWERF-B.FTheFrefundFdueFtoFtheFinsuredFshallFbeFcalculatedFonFaFshortFrateFbasis.



TheFmajorFfunctionFofFinsuranceFisFto:



A.FReduceFtheFcostFofFlosses.

B.FShareFtheFlossesFofFtheFfewFamongFmany.

C.FSafeguardFtheFinterestFofFtheFmortgagees

D.FServeFasFtheFbasisFofFtheFexistingFcreditFsystem.F-FCORRECTFANSWERF-
B.FShareFtheFlossesFofFtheFfewFamongFmany.



UnderFtheFpolicyFofF"fire"Finsurance,FtheFinsurerFwouldFbeFobligatedFtoFpayFtheFfollowingFlossFonly:

,A.FFireFdamageFcausedFtoFapplianceFfollowingFaFsuddenFpowerFsurge.

B.FFireFdamageFtoFinsuredFbuildingsFoccurringFduringFaFrebellion.

C.FDamageFtoFinsuredFpropertyFdueFtoFradioactiveFcontamination.

D.FLossFofFpropertyFcausedFbyFaFprocessFinvolvingFtheFapplicationFofFheat.F-FCORRECTFANSWERF-
B.FFireFdamageFtoFinsuredFbuildingsFoccurringFduringFaFrebellion.



Generally,FallFofFtheFfollowing,FexceptFone,FareFseenFtoFbeF"incompetent"ForFlackingFtheFlegalFcapacityFtoFc
ontract.FPickFtheFexception:



A.FAFcorporation.

B.FAFchild.

C.FAFtradeFname.

D.FAFsenileFperson.F-FCORRECTFANSWERF-A.FAFcorporation.



IfFaFburningFlogFrollsFoutFofFyourFclientsFfireplaceFgrateFacrossFtheFhearthFandFontoFtheFrugFinFfront,FtheFloss
FtoFtheFrugFisFconsideredFtoFbeFtheFresultFofFa(n):




A.FDirectFfire.

B.FIndirectFfire

C.FFriendlyFfire

D.FHostileFfireF-FCORRECTFANSWERF-D.FHostileFfire



StatutoryFConditionFFive:FTermination,FsetsFoutFtheFprovisionsFforFcancellationFofFaFcontractFofFinsuranceFt
hatFmustFbeFcompiledFwithFbyFtheFinsuredFandFtheFinsurer.FAllFofFtheFfollowingFprovisionsFregardingFtermin
ationFbyFtheFinsurerFareFtrue,FexceptFone.FSelectFtheFexception:



A.FWhenFwrittenFnoticeFofFtheFterminationFisFsentFbyFregisteredFmail,FtheFinsurerFmustFgiveFtheFinsuredF15F
days'FnoticeFstartingFtheFdayFafterFtheFletterFisFreceivedFbyFtheFinsured'sFpostFoffice.

B.FWhenFwrittenFnoticeFofFterminationFisFsentFhand-
delivered,FtheFinsurerFmustFgiveFtheFinsuredF15Fdays'FnoticeFstartingFonFtheFdateFtheFletterFwasFregisteredF
byFtheFinsurer'sFpostFoffice.

,C.FWhenFwrittenFnoticeFofFterminationFisFsentFhandFdelivered,FtheFinsurerFmustFgiveFtheFinsuredF5Fdays'Fno
tice.

D.FWhenFtheFinsuredFisFentitledFtoFaFpremiumFrefund,FtheFamountFofFtheFrefundFisFcalculatedFonFpro-
FrateF(perFdiem)Fbasis.F-FCORRECTFANSWERF-B.FWhenFwrittenFnoticeFofFterminationFisFsentFhand-

delivered,FtheFinsurerFmustFgiveFtheFinsuredF15Fdays'FnoticeFstartingFonFtheFdateFtheFletterFwasFregisteredF
byFtheFinsurer'sFpostFoffice.



TheFInsuranceFActFprovidesFthatFaFWaiverFofFTermForFConditionFofFanFinsuranceFcontractFis:



A.FPermittedFtoFbeFmadeFbyFtheFinsuranceFbrokerFasFlongFasFitFisFinFfavourFofFtheFinsured.

B.FNotFbinding,FunlessFitFisFinFwritingFandFunderFtheFsignatureFofFaFpersonFauthorizedFbyFtheFinsurer.

C.FValidFonlyFwhenFsignedFbyFbothFtheFinsurerFandFtheFinsured.

D.FBondingFwhenFevenFprovidedForally.F-FCORRECTFANSWERF-
B.FNotFbinding,FunlessFitFisFinFwritingFandFunderFtheFsignatureFofFaFpersonFauthorizedFbyFtheFinsurer.



OneFofFtheFelementsFthatFdeterminesFwhetherFaFcontactFisFlegallyFenforceableForFnotFisFtheF"legalFcapacityF
ofFtheFparties".FInFallFofFtheFfollowingFcontracts,FexceptFone,FareFtheFpartiesFconsideredFtoFhaveF"legalFcapa
city".FSelectFtheFoneFthatFdoesFnotFmeetFthisFelement.



A.FAnFinsuranceFcontractFissuedFinFtheFnameFofFMarryFPoppinFd.b.a.FLittleFPeopleFDayFCareFCentre.

B.FAFleaseFagreementFnamingFtheFtenantFasFtheF"NoFRiskFDeniedFInsuranceFCorporation".

C.FAFbuildingFcontractFshowingFtheFGeneralFContractorFasFBricksFandFMortarFInc.

D.FAnFinvoiceFforFmerchandiseFshippedFtoFtheForderFofFMandy'sFSouvenirFandFGiftFShop.F-
FCORRECTFANSWERF-

D.FAnFinvoiceFforFmerchandiseFshippedFtoFtheForderFofFMandy'sFSouvenirFandFGiftFShop.



RiskFselectionFisFbasedFonFtheFUnderwriter'sFassessmentFofFtheFhazardsFpertainingFtoFtheFriskFthatFhasFbee
nFsubmittedFforFinsurance.FAnFunderwriterFmustFdetermineFwhetherForFnotFthereFisFaFpotentialFMoralFHaz
ard.FTheFfollowingFdoesFnotFapplyFasFaFconditionFindicatingFtheFpresenceFofFaFMoralFHazard:



A.FTheFmoralFcharacterFofFtheFapplicantFforFinsurance.

B.FTheFfinancialFconditionFofFtheFapplicantFforFinsurance.

C.FTheFphysicalFconditionFofFtheFpremisesFwhichFmayFcauseFaFlossFtoFoccur.

, D.FTheFindifferenceFtoFlossFofFtheFapplicantFforFinsurance.F-FCORRECTFANSWERF-
C.FTheFphysicalFconditionFofFtheFpremisesFwhichFmayFcauseFaFlossFtoFoccur.



AFwarrantyFisFa:



A.FPromiseFbyFtheFbrokerFtoFremitFpremiumsFtoFtheFinsurerFinFaccordanceFwithFtheFtermsFstatedFinFtheFAge
ncyFAgreement.

B.FGuaranteeFofFinsuredsFthatFcertainFfactsFareFtrulyFasFtheyFareFrepresentedFtoFbeFandFthatFtheyFwillFremai
nFso.

C.FPieceFofFpaperFsimilarFtoFanFEndorsementFwhichFmakedFchangesFtoFtheFpolicy.

D.FPromiseFbyFtheFinsurerFtoFmakeFpaymentFofFallFclaimsFsubmittedFtoFitFwithinFaF21FdayFperiod.F-
FCORRECTFANSWERF-

B.FGuaranteeFofFinsuredsFthatFcertainFfactsFareFtrulyFasFtheyFareFrepresentedFtoFbeFandFthatFtheyFwillFremai
nFso.



AllFHomeownersFPoliciesFcontainFtheFsectionF"ExtensionsFofFCoverage".FAllFofFtheFfollowingFlossesFareFcove
redFunderFthisFsection,FexceptFone.FPickFtheFexception:



A.FDamageFtoFpersonalFpropertyFduringFtransportationFtoFtheFinsured'sFnewFprincipalFresidenceFlocatedFinF
Sydney,FNovaFScotia,FwhichFisFtoFbeFoccupiedFbyFtheFinsuredFwithinFtheFnextF10Fdays.

B.FTheFcostFofFrepairFtheF"tearFout"FdamageFtoFtheFinsured'sFdrivewayFthatFwasFnecessarilyFcausedFtoFrepla
ceFtheFrupturedFwaterFmain.

C.FTheFcostFtoFreplaceFtheFinsured'sFfreezerFfoodFthatFwasFspoiledFasFaFresultFofFaFpowerFfailureFcausedFbyFli
ghtening.

D.FLossFofFtheFinsured'sFindoorFtreesFandFplantsFdueFtoFexposureFtoFextremeFtemperaturesFafterFaFsevereFs
tormFdamagedFpartFofFtheFroof.F-FCORRECTFANSWERF-
B.FTheFcostFofFrepairFtheF"tearFout"FdamageFtoFtheFinsured'sFdrivewayFthatFwasFnecessarilyFcausedFtoFrepla
ceFtheFrupturedFwaterFmain.



TheFBasisFofFClaimFPaymentFisFtheFsameFforFallFHomeownersFForms.FAllFofFtheseFstatementsFregardingFtheF
BasisFofFClaimFPaymentFareFtrue,FexceptFone.FPickFtheFEXCEPTION:



A.FDwellingFBuildingFandFDetachedFPrivateFStructuresFareFcoveredFonFaFReplacementFCostFBasis.