RIBO - GENERAL
Which of the following provinces offer only government compulsory auto insurance? - Answer-
British Columbia, Manitoba and Saskatchewan
The definition of ordinary negligence? - Answer- Is the failure to do what a reasonable person
would do in a given situation.
A broker/agent is responsible for what? - Answer- Writing only those classes of business
acceptable to his/her insurer.
An insurance contract contains all of the elements of any other legal contract. One element that
must also be contained in a valid contract of insurance is what? - Answer- Utmost good faith. C-82
Study 2 ("In it's underwear")
The definition of a physical hazard would best be described as what? - Answer- Slippery floors, C-
81 Study 1
Insurance is what? - Answer- The undertaking by one person to indemnify another person against
loss or Liability for loss in respect of a certain risk or peril
As far as reinsurance is concerned, the amount one party reinsures with another is called what? -
Answer- Its cession
True or False: The absence of true mutual understanding with respect to a contract will not effect
the legality of the contract once it has been signed - Answer- False
Which of the following auto coverage responds regardless of fault? - Answer- Accident Benefits, A
B Pays Regardless of Fault
What is the name of the legal process used by insurers when collecting from a responsible 3rd
party? - Answer- Subrogation
True or False: Statutory Conditions can be changed at the request of the insured to decrease
minimum legislated coverage available. - Answer- False: Set out by Insurance act
Which of the following statements about co-insurance is true? - Answer- They are designed to
encourage the insured to carry adequate amounts of Insurance. They force the insured to bear a
portion of every loss if under insurance exists. It is mostly applied to commercial policies.
Which of the following helps insurers determine the probability of insured losses in the future? -
Answer- Past loss histories (this is Step 2 in order to determine rates and premiums)
When an insurer intentionally issues a policy that differs from the application. - Answer- It must
notify the insured in writing the ways in which it differs from the application. 3 things must occur
notify, writing, silence is acceptance
,What would not affect the rate on a property insurance policy? - Answer- Length of time applicant
has been in business. (Not on the application)
Under RIBO regulation 991, section 15, a broker would not be considered to be guilty of
misconduct if: - Answer- The broker compares line for line, a potential customer's present
insurance coverage with that of a competing company, which he or she represents, in order to
point out the benefits of his proposed policy coverage.
Of the following, the person who most clearly has an insurable interest in an automobile is -
Answer- The person who actually owns the automobile
Extension insurance is available in provinces having government automobile insurance plans. -
Answer- It may be used to increase limits of insurance and/or reduce deductibles.
Which of the following types of insurance does not belong under the heading of General
Insurance? - Answer- Life Insurance
What do Applications for insurance policies do? - Answer- Provide details for assessing and rating
a risk.
True or False: Third parties are not a party to the policy. - Answer- True
True or False: Every member must maintain errors and omissions insurance of at least $100,000
for any one occurrence. - Answer- False: Errors and Omissions at 1 Million and Fidelity at 100 K
A member who places insurance with an insurer unlicensed to trade insurance in Ontario must? -
Answer- Obtain the written consent of the member of the public whom the broker services to the
effect that they are aware their coverage will be carried by an unlicensed insurer in the province.
Which of the following is NOT a stipulation of the broker's Code of Conduct as found in RIBO
regulation 991, section 14? - Answer- All members shall assist in preventing the authorized
practice of their occupation.
Under the RIB act definition, an insurance broker is all of the following, except: - Answer- A person
who arranges any payment plan for the premium due under a contract of insurance. E R tells us
payment plans acceptable we simply hold in trust
Where the RIBO Discipline Committee finds a member guilty of misconduct, it may do all of the
following except: - Answer- Set fines of up to $10,000 and/or imprison the member for up to 12
months.
Under a fire policy the insurer will pay what? - Answer- The least of the interest of the insured in
the property. The property's actual cash value at the time of the loss. The amount of insurance
purchased which is applicable to the item lost or damaged.
The insured decides to renovate their home. As a result they have to obtain temporary residence
until the work is completed. The Homeowner policy will pay what? - Answer- None of the
expenses. (not insured peril)
, A property is insured for $100,000 and valued at $150,000. There is a 90% coinsurance clause. A
loss of $90,000 occurs. The insurer will pay: - Answer- $66,667 (100,000/135,000 * 90,000=
$66,667)
Under a Fire and Extended Coverage policy which item is not included? - Answer- Earthquake.
When a standard Mortgage Clause is attached to a policy: - Answer- The insurer could be called
upon to pay a loss to the Mortgagee even though the insured has violated a condition of the policy.
The insured's dining room furniture was badly damaged when a fire broke out. The claim was
settled by paying an amount equal to the replacement cost minus physical depreciation. This
illustrates the application of: - Answer- Actual cash value. (Replacement cost - depreciation)
Under the fire statutory condition Entry-Control-Abandonment the insurer is not entitled to: -
Answer- The control or possession of the property damaged.
Which of these situations would be covered by the RIBO Homeowner's Form? - Answer- Pipes
freeze and burst causing water damage while the insured is away overnight. (4 consecutive days
no coverage)
Under a Personal Articles endorsement what happens? - Answer- Valuations will be required on
those items insured on a valued basis. (valued basis must provide on app)
You have 3 candlesticks, 2 of which are stolen and one is being repaired. Which clause would
prevent you from claiming for all three? - Answer- Pair and Set.
You have a Comprehensive Homeowners policy with a limit of $200,000 for Coverage A and a
$250 deductible. In which of the following circumstances would your policy apply? - Answer- Your
whole house burns down; the insurer will pay $199,750 plus debris removal.
Under the Fire Statutory conditions, should an insurer choose to replace a damaged property
instead of making payment for it, the insurer must give written notice of its intention - Answer-
Within 30 days of receiving proof of loss. (pg. 62)
True or False: Since a contract of insurance is said to be a personal contract, people who sell a
business can under no circumstance sell or assign to the purchaser the insurance on it. - Answer-
False (if they meet 2 conditions)
True or False: A friendly fire is a hostile fire when it leaves the place provided for it. - Answer- True
What is the number one requirement to qualify for a Comprehensive Homeowners policy -
Answer- The owner must live in the dwelling.
Exclusions under all-risks policies can be divided into several different groups. Which of the
following is not one of those groups? (5 Categories) - Answer- Losses that are accidental (why we
buy insurance)
An extended coverage endorsement attached to a fire policy does what? - Answer- Adds coverage
for more perils.
Which of the following provinces offer only government compulsory auto insurance? - Answer-
British Columbia, Manitoba and Saskatchewan
The definition of ordinary negligence? - Answer- Is the failure to do what a reasonable person
would do in a given situation.
A broker/agent is responsible for what? - Answer- Writing only those classes of business
acceptable to his/her insurer.
An insurance contract contains all of the elements of any other legal contract. One element that
must also be contained in a valid contract of insurance is what? - Answer- Utmost good faith. C-82
Study 2 ("In it's underwear")
The definition of a physical hazard would best be described as what? - Answer- Slippery floors, C-
81 Study 1
Insurance is what? - Answer- The undertaking by one person to indemnify another person against
loss or Liability for loss in respect of a certain risk or peril
As far as reinsurance is concerned, the amount one party reinsures with another is called what? -
Answer- Its cession
True or False: The absence of true mutual understanding with respect to a contract will not effect
the legality of the contract once it has been signed - Answer- False
Which of the following auto coverage responds regardless of fault? - Answer- Accident Benefits, A
B Pays Regardless of Fault
What is the name of the legal process used by insurers when collecting from a responsible 3rd
party? - Answer- Subrogation
True or False: Statutory Conditions can be changed at the request of the insured to decrease
minimum legislated coverage available. - Answer- False: Set out by Insurance act
Which of the following statements about co-insurance is true? - Answer- They are designed to
encourage the insured to carry adequate amounts of Insurance. They force the insured to bear a
portion of every loss if under insurance exists. It is mostly applied to commercial policies.
Which of the following helps insurers determine the probability of insured losses in the future? -
Answer- Past loss histories (this is Step 2 in order to determine rates and premiums)
When an insurer intentionally issues a policy that differs from the application. - Answer- It must
notify the insured in writing the ways in which it differs from the application. 3 things must occur
notify, writing, silence is acceptance
,What would not affect the rate on a property insurance policy? - Answer- Length of time applicant
has been in business. (Not on the application)
Under RIBO regulation 991, section 15, a broker would not be considered to be guilty of
misconduct if: - Answer- The broker compares line for line, a potential customer's present
insurance coverage with that of a competing company, which he or she represents, in order to
point out the benefits of his proposed policy coverage.
Of the following, the person who most clearly has an insurable interest in an automobile is -
Answer- The person who actually owns the automobile
Extension insurance is available in provinces having government automobile insurance plans. -
Answer- It may be used to increase limits of insurance and/or reduce deductibles.
Which of the following types of insurance does not belong under the heading of General
Insurance? - Answer- Life Insurance
What do Applications for insurance policies do? - Answer- Provide details for assessing and rating
a risk.
True or False: Third parties are not a party to the policy. - Answer- True
True or False: Every member must maintain errors and omissions insurance of at least $100,000
for any one occurrence. - Answer- False: Errors and Omissions at 1 Million and Fidelity at 100 K
A member who places insurance with an insurer unlicensed to trade insurance in Ontario must? -
Answer- Obtain the written consent of the member of the public whom the broker services to the
effect that they are aware their coverage will be carried by an unlicensed insurer in the province.
Which of the following is NOT a stipulation of the broker's Code of Conduct as found in RIBO
regulation 991, section 14? - Answer- All members shall assist in preventing the authorized
practice of their occupation.
Under the RIB act definition, an insurance broker is all of the following, except: - Answer- A person
who arranges any payment plan for the premium due under a contract of insurance. E R tells us
payment plans acceptable we simply hold in trust
Where the RIBO Discipline Committee finds a member guilty of misconduct, it may do all of the
following except: - Answer- Set fines of up to $10,000 and/or imprison the member for up to 12
months.
Under a fire policy the insurer will pay what? - Answer- The least of the interest of the insured in
the property. The property's actual cash value at the time of the loss. The amount of insurance
purchased which is applicable to the item lost or damaged.
The insured decides to renovate their home. As a result they have to obtain temporary residence
until the work is completed. The Homeowner policy will pay what? - Answer- None of the
expenses. (not insured peril)
, A property is insured for $100,000 and valued at $150,000. There is a 90% coinsurance clause. A
loss of $90,000 occurs. The insurer will pay: - Answer- $66,667 (100,000/135,000 * 90,000=
$66,667)
Under a Fire and Extended Coverage policy which item is not included? - Answer- Earthquake.
When a standard Mortgage Clause is attached to a policy: - Answer- The insurer could be called
upon to pay a loss to the Mortgagee even though the insured has violated a condition of the policy.
The insured's dining room furniture was badly damaged when a fire broke out. The claim was
settled by paying an amount equal to the replacement cost minus physical depreciation. This
illustrates the application of: - Answer- Actual cash value. (Replacement cost - depreciation)
Under the fire statutory condition Entry-Control-Abandonment the insurer is not entitled to: -
Answer- The control or possession of the property damaged.
Which of these situations would be covered by the RIBO Homeowner's Form? - Answer- Pipes
freeze and burst causing water damage while the insured is away overnight. (4 consecutive days
no coverage)
Under a Personal Articles endorsement what happens? - Answer- Valuations will be required on
those items insured on a valued basis. (valued basis must provide on app)
You have 3 candlesticks, 2 of which are stolen and one is being repaired. Which clause would
prevent you from claiming for all three? - Answer- Pair and Set.
You have a Comprehensive Homeowners policy with a limit of $200,000 for Coverage A and a
$250 deductible. In which of the following circumstances would your policy apply? - Answer- Your
whole house burns down; the insurer will pay $199,750 plus debris removal.
Under the Fire Statutory conditions, should an insurer choose to replace a damaged property
instead of making payment for it, the insurer must give written notice of its intention - Answer-
Within 30 days of receiving proof of loss. (pg. 62)
True or False: Since a contract of insurance is said to be a personal contract, people who sell a
business can under no circumstance sell or assign to the purchaser the insurance on it. - Answer-
False (if they meet 2 conditions)
True or False: A friendly fire is a hostile fire when it leaves the place provided for it. - Answer- True
What is the number one requirement to qualify for a Comprehensive Homeowners policy -
Answer- The owner must live in the dwelling.
Exclusions under all-risks policies can be divided into several different groups. Which of the
following is not one of those groups? (5 Categories) - Answer- Losses that are accidental (why we
buy insurance)
An extended coverage endorsement attached to a fire policy does what? - Answer- Adds coverage
for more perils.
