Fundamentals of Insurance Practice Exam Questions & Answers 100% Correct!!

The coverage limits on Homeowners Insurance Policies are determined after calculating the Replacement Cost of the dwelling building. Once this value is determined, the rest of the coverage limits are calculated. Which of the following coverage limits is correct? a) Personal Property- 100% of Coverage A b) Detached Private Structures - 10% of Coverage A c) Additional Living Expenses- - 10% of Coverage A d) Dwelling- 100% of Personal Property Coverage - ANSWER-The answer is B Insurance has been around for a long time and can be traced back hundreds of years. The birth of Fire insurance can be traced back to: A) London, England in June 1660 B) London, England in September 1666 C) London, England in June 1666 D) London, England in September 1888 - ANSWER-The answer is B London, England in September 1666 Which of the following is NOT one of the 5 "Functions of Insurance"? A) Spread of Risk B) Employment C) Loss Prevention and Loss Reduction D) Loss Control and Loss Transfer - ANSWER-The answer is D Loss Control and Loss Transfer Insurance is based on the "Principle of Indemnity". Which of the following definitions best describes this principle? a) Ensures that people receive the actual amount of their loss, no more no less b) Ensures that the limits of insurance are always reinstated after a loss c) Ensures that people will receive a cash settlement for all insured losses d) Ensures that people will be provided with a place to stay when their dwelling is deemed unfit for occupancy after a loss - ANSWER-The answer is A Ensures that people receive the actual amount of their loss, no more no less The 2 different types of Private Insurers are Stock Companies and Mutual Companies. These 2 types of companies have many similarities and some differences. One main difference is the ownership. Who are mutual Companies owned by? a) Stockholders b) Policyholders c) Employees d) The Federal Government - ANSWER-The answer is B Policyholders There are several different types of Government Insurance plans in Canada. Which of the following is NOT considered one of these plans? a) Compulsory Government Automobile Insurance b) Provincial Medical Plans c) The Facility Association in Automobile Insurance (available in Private Insurance provinces) d) Workers Compensation plans - ANSWER-The answer is C The Facility Association in Automobile Insurance (available in Private Insurance provinces) Lloyds of London has proven to be a valuable option for clients and their specific risks. Which of the following statements about "Lloyds of London" is true? a) Provides Habitational Insurance for New Homes b) Is an Insurance Company specifically for complex risks c) Operates as an insurance market d) Is not available in C