Copy of OTL Agent Practice Exam Five- – June 6, 2025

1. Question

The Facility Association is:

A reinsurance pool for accompanying auto policy holders who desire particularly high liability limits

Correct Incorrect Correct answer

An insurance pool subscribed to by auto insurance companies who share the writing of risks that are not ordinarily written on the normal insurance market.

Correct Incorrect Correct answer

A group of insurance carriers who write business on auto owned by brokers and their staff

Correct Incorrect Correct answer

The provincial government insurance office which is charged with the responsibility of accepting applications from auto owners who cannot get Insurance anywhere else.

Correct Incorrect Correct answer

2. Question

What is the priority of payment in Alberta for Property damage

$10,000

Correct Incorrect Correct answer

$5000

Correct Incorrect Correct answer

$190,000

Correct Incorrect Correct answer

$200,0

Correct Incorrect Correct answer

3. Question

Choose the most correct statement.

a Mortgagee is similar to a lessee

Correct Incorrect Correct answer

a mortgagor is similar to a lessor

Correct Incorrect Correct answer

a bailee is similar to lessees

Correct Incorrect Correct answer

a mortgagor is similar to a lessee

Correct Incorrect Correct answer

4. Question

Special limits apply to the following items if the loss or damage to such property was not caused by a specified peril.

Jewellery. furs, stamp & coin collections, manuscripts, collectible cards, bicycles, boats & seadoos.

Correct Incorrect Correct answer

Jewellery, furs, stamp & coin collections, manuscripts, collectible cards, bicycles and their related property.

Correct Incorrect Correct answer

Jewellery, furs, stamp & coin collections, manuscripts, collectible cards, kayaks, bicycles and their related property.

Correct Incorrect Correct answer

Jewellery, furs stamp & coin collections, manuscripts, collectible cards, canoes, bicycles and their related property

Correct Incorrect Correct answer

5. Question

Which of the following items could not be scheduled under a Personal Article Coverage?

Diamond necklace

Correct Incorrect Correct answer

Cell phone

Correct Incorrect Correct answer

Fur coat

Correct Incorrect Correct answer

Antique motorcycle

Correct Incorrect Correct answer

6. Question

The owners application for auto insurance must be sent to the insurance company

Within 7 days

Correct Incorrect Correct answer

Within 21 days

Correct Incorrect Correct answer

Before the end of the business day

Correct Incorrect Correct answer

As soon as possible or practicable

Correct Incorrect Correct answer

7. Question

Injured persons may not sue a liable third party no matter how serious their injury or even if
death occurs. What province is this one of the restriction for bodily injury?

Quebec

Correct Incorrect Correct answer

Ontario

Correct Incorrect Correct answer

Alberta

Correct Incorrect Correct answer

Manitoba

Correct Incorrect Correct answer

8. Question

Your insured is a tenant and has purchased a tenants package policy for $32,000 with a $200 deductible. Which is the correct statement?

premises would include the locker in the basement

Correct Incorrect Correct answer

the replacement cost would automatically apply if they had a loss

Correct Incorrect Correct answer

there is a limit for improvements and betterments

Correct Incorrect Correct answer

the deductible is waived if the loss is total

Correct Incorrect Correct answer

9. Question

What are the three coverages that are specific to condominium unit owners’ insurance needs.

Improvements and Betterments, Loss Assessment and Individual Unit Improvement and Depreciation Coverage.

Correct Incorrect Correct answer

Improvements and Betterments, Unit Additional Protection Coverage and Loss Assessment.

Correct Incorrect Correct answer

Improvements and Betterments, Individual Unit Betterment Guarantee Coverage and Loss Assessment.

Correct Incorrect Correct answer

Loss Assessment, Unit Additional Protection and Improvements and Interior Design Coverage.

Correct Incorrect Correct answer

10. Question

Which of the following perils are covered under the glass policy?

Riot

Correct Incorrect Correct answer

Fire

Correct Incorrect Correct answer

War

Correct Incorrect Correct answer

Nuclear

Correct Incorrect Correct answer

11. Question

Who is the insured person on your OAP 1 under Accident Benefits?

an occupant of your auto while you are on vacation in Florida. the occupant has his own auto insurance policy

Correct Incorrect Correct answer

your sister in law while driving the car that you lent her, who does not have a car of her own, or any insurance

Correct Incorrect Correct answer

a pedestrian struck by your car while crossing between parked cars and the pedestrian is a driver on his parent's auto insurance

Correct Incorrect Correct answer

all of the above

Correct Incorrect Correct answer

12. Question

When an insurer cancels the policy they must

comply with RIBO act

Correct Incorrect Correct answer

send back the lnsured's premium by priority post

Correct Incorrect Correct answer

comply with the statutory conditions of the policy

Correct Incorrect Correct answer

give back the short rate portion of the premium

Correct Incorrect Correct answer

13. Question

An umbrella policy

Contributes proportionately along with other liability policies the insured may have covering the same risk.

Correct Incorrect Correct answer

Is only available for commercial and business risks.

Correct Incorrect Correct answer

Contains a large self insured retention that acts similar to a deductible.

Correct Incorrect Correct answer

Provides coverage more restricted than the primary policy but provides worldwide coverage.

Correct Incorrect Correct answer

14. Question

If a person is unable to work due to an injury in an auto accident their SPF 1 could potentially;

pay any lost wages up to 2 years

Correct Incorrect Correct answer

pay up to 90% of net income up to $1000

Correct Incorrect Correct answer

pay any or all amounts until age 65

Correct Incorrect Correct answer

pay up to 80% of gross income up to $600 weekly

Correct Incorrect Correct answer

15. Question

After theft of the insured’s auto is reported to the police, the insurer will reimburse the necessary transportation expense in the following manner:

limit $300 after 2 weeks

Correct Incorrect Correct answer

limit $750 after 72 hours

Correct Incorrect Correct answer

limit $450 after 48 hours

Correct Incorrect Correct answer

maximum of $300 commencing as soon as the theft is reported

Correct Incorrect Correct answer

16. Question

Which of the following is true?

lightning damage to electrical devices is not included under the Fire Extended Coverage Endorsement

Correct Incorrect Correct answer

explosion damage to the insured's property is covered under the Extended Coverage Endorsement when caused by a boiler in a neighbouring building

Correct Incorrect Correct answer

when the insured, under a Fire Policy closes his business operation for a three week holiday, his premises are regarded as vacant and his coverage under the Fire Policy is void

Correct Incorrect Correct answer

any one of several people, who together own a building may protect the financial interest of the others, by insuring the property in his/her name, and simply make sure that the amount of insurance is adequate to cover the financial interest of all of them.

Correct Incorrect Correct answer

17. Question

A neighbouring tree damages your house when it falls during a storm. Your insurer

pays the claim and ignores your deductible

Correct Incorrect Correct answer

refuses to pay because it was a neighbour's tree

Correct Incorrect Correct answer

pays but subrogates against the neighbour

Correct Incorrect Correct answer

pays the claim subject to your deductible

Correct Incorrect Correct answer

18. Question

The damages that are not normally covered under the liability policy are

General damages

Correct Incorrect Correct answer

Special damages

Correct Incorrect Correct answer

Compensatory damages

Correct Incorrect Correct answer

Exemplary damages

Correct Incorrect Correct answer

19. Question

The coverage for Replacement Transportation (SEF 20) provides coverage for which of the following:

all expenses incurred for the rental of a substitute auto due to the loss or damage to the insured auto no matter how caused

Correct Incorrect Correct answer

80% of all expenses incurred for the rental of a substitute auto

Correct Incorrect Correct answer

provides a replacement auto but does not cover expenses

Correct Incorrect Correct answer

reasonable expenses incurred for rental of a substitute auto or costs of taxicabs and public transportation

Correct Incorrect Correct answer

20. Question

The insured has an OAP 1 with a $300 deductible on both Comprehensive and Collision Coverage. Lightning strikes through the window and catches the car seat on fire causing $500 damage. How much will the insurer pay:

$500

Correct Incorrect Correct answer

$200

Correct Incorrect Correct answer

$50

Correct Incorrect Correct answer

Nothing

Correct Incorrect Correct answer

21. Question

Which of the following statements found in the Homeowners/Tenant/Condo Policy is correct?

personal property is Insured, against the peril of fire when temporarily removed and stored in a warehouse for 45 days

Correct Incorrect Correct answer

loss of the lnsured's valuable dog by theft is covered,

Correct Incorrect Correct answer

the deductible clause does not apply in connection to fire losses

Correct Incorrect Correct answer

the Insured may have the option of a ''replacement cost" basis settlement on his building(s) as long as it is on the same location and is done within a reasonable time, but the Insured may be penalized in the amount of the settlement if the lnsured 's building is insured for less than 80% of its value.

Correct Incorrect Correct answer

22. Question

There are different basis of settlement

agreed value, disputed value and ACV

Correct Incorrect Correct answer

replacement cost, agreed value, ACV and stated amount

Correct Incorrect Correct answer

stated amount, ACV and replacement cost

Correct Incorrect Correct answer

replacement cost, vacant and Actual Cash Value

Correct Incorrect Correct answer

23. Question

The victims of uninsured and unidentified motorists may recover indemnity for their losses. What is the name of the Fund?

Highway Victims Fund

Correct Incorrect Correct answer

Highway Accident Victims Fund

Correct Incorrect Correct answer

Highway Victims' Indemnity Fund

Correct Incorrect Correct answer

None of the above

Correct Incorrect Correct answer

24. Question

Liability coverage provided on an accident basis provides includes injury or damage

Due to an event that is sudden, unintentional and unexpected

Correct Incorrect Correct answer

Caused by repeated exposure to the same harmful thing

Correct Incorrect Correct answer

From an event that occurs over a period of time, is unintentional and unexpected

Correct Incorrect Correct answer

From an intentional action where the outcome is unintentional and unexpected

Correct Incorrect Correct answer

25. Question

In liability under defense costs the insured is covered for which of the following:

legal fees over and above your limit of liability arising out of loss or damage to a person or property as a result of an auto accident

Correct Incorrect Correct answer

legal fees within your limit of liability for a lawyer that you hired on your own

Correct Incorrect Correct answer

costs paid by the insurer due to provisions of a statue relating to auto insurance which the insurer would not otherwise be liable to pay

Correct Incorrect Correct answer

any Interest accruing after judgment on the part of the judgment which exceeds the limit of liability

Correct Incorrect Correct answer

26. Question

In the case of a tenant package policy

tenant improvements and betterments may be added by endorsement for an additional premium.

Correct Incorrect Correct answer

the insured may apply up to $500 of the insurance to any type of damage caused by others than the "Insured" to any part of the landlord's building.

Correct Incorrect Correct answer

coverage on outdoor trees and shrubs is included, to a limit of 5% of the contents amount of insurance

Correct Incorrect Correct answer

"dwelling' means the portion of the building occupied by the Insured as a private residence

Correct Incorrect Correct answer

27. Question

What perils are you insured for under specified perils of an automobile policy?

Fire

Correct Incorrect Correct answer

Lightning

Correct Incorrect Correct answer

Riot

Correct Incorrect Correct answer

All of the above

Correct Incorrect Correct answer

28. Question

Under a Boiler and Machinery policy, an example of a boiler would include a device designed to

Store hot water

Correct Incorrect Correct answer

Process food

Correct Incorrect Correct answer

Product steam for power

Correct Incorrect Correct answer

Sterilize equipment

Correct Incorrect Correct answer

29. Question

Which of the following is correct with respect to Homeowners/Tenant/Condo policy?

coverage on personal property of visitors is included as long as it is on or in the lnsured's private residence

Correct Incorrect Correct answer

unscheduled jewellery. watches, gems and furs are limited to $2,000 in all for loss caused by fire and theft

Correct Incorrect Correct answer

coverage on personal property of visitors is included as long as it is on or in the lnsured 's private residence premises, provided the visitor does not have his/her own applicable insurance

Correct Incorrect Correct answer

there is automatic protection for additional living expense, if an insured peril occurs making the premises unfit for occupancy, the Indemnity period for this protection being limited to two weeks

Correct Incorrect Correct answer

30. Question

Your client will be keeping half of her contents in a storage warehouse as she finds her condominium too cluttered. You advise her

you no longer wish lo deal with her as this is a material change in risk

Correct Incorrect Correct answer

there would be fire damage only

Correct Incorrect Correct answer

personal property stored in a controlled access storage facility is only insured for 30 days from the date that the property is first put in storage, unless the loss is caused by theft.

Correct Incorrect Correct answer

that no changes were necessary everything was fine

Correct Incorrect Correct answer

31. Question

Which of the following statements is incorrect?

Unearned premium reserves consist of that portion of the premium that is not yet earned

Correct Incorrect Correct answer

Stock companies operate for the benefit of their members only

Correct Incorrect Correct answer

IBNR reserves mean reserves set aside for losses that have occurred but have not yet been reported.

Correct Incorrect Correct answer

Stock companies achieve a profit from two sources.

Correct Incorrect Correct answer

32. Question

Which of the following business interruption policies does not insure loss of income or profit

Earnings Form

Correct Incorrect Correct answer

Profits Form

Correct Incorrect Correct answer

Extra Expense Form

Correct Incorrect Correct answer

Contingency Form

Correct Incorrect Correct answer

33. Question

If an insured is charged and convicted of impaired driving. With respect to Accident Benefits which of the following would be paid?

only weekly income benefits would be paid

Correct Incorrect Correct answer

all basic accident benefits, except weekly income benefits, non earner benefit and compensation for other benefits would be paid

Correct Incorrect Correct answer

all Accident Benefits would be paid

Correct Incorrect Correct answer

nothing would be paid

Correct Incorrect Correct answer

34. Question

The insured, for reasons of his own, sold his auto and contacts you by phone as to what should be done about his OAP policy. You should advise the following:

Send the insured a cancellation form or a lost policy voucher, instructing him to insert the effective cancellation date, sign it and return it to your office for a pro rata refund.

Correct Incorrect Correct answer

Tell him the premium, due to the sale of the car Is fully earned and he can discard the policy

Correct Incorrect Correct answer

Send the insured a cancellation form or lost policy voucher or ask him to sign off the policy, with the effective dale of cancellation and return it to your office lo be passed along to the insurer for a short rate refund of the unearned premium

Correct Incorrect Correct answer

Advise the insured that you will send an immediate refund

Correct Incorrect Correct answer

35. Question

Losses or increased cost of repairs due to operation of any zoning, demolition, repair or construction law

are insured on all homeowners policies

Correct Incorrect Correct answer

are not insured, but a special policy, known as a Municipal Risk Policy, can be issued that will provide the insured with the needed protection, for a nominal premium

Correct Incorrect Correct answer

are not insured, but various building by-laws endorsements are available, at an additional premium, which may provide the Insured with additional coverage to bring his building into compliance with the by-law requirements

Correct Incorrect Correct answer

are insured and included in the protection under this policy

Correct Incorrect Correct answer

36. Question

Improvements and betterments under a condo policy are

automatically covered up to the limits of the contents

Correct Incorrect Correct answer

covered under the "Condominium Unit Owners Additional Protection Insurance"

Correct Incorrect Correct answer

not covered up to $2000 automatically

Correct Incorrect Correct answer

covered for any amount that has been specified in the Declarations

Correct Incorrect Correct answer

37. Question

With regards to contract law, a meeting of the minds is required to fulfill the element of

Agreement

Correct Incorrect Correct answer

Genuine Intent

Correct Incorrect Correct answer

Legal Capacity

Correct Incorrect Correct answer

Consideration

Correct Incorrect Correct answer

38. Question

Under the Basic Fire Policy, loss or damage to goods undergoing a process that involves the application of heat is covered if that loss or damage resulted

because the goods became so hot that they caught fire.

Correct Incorrect Correct answer

from a fire starting elsewhere in the insured premises.

Correct Incorrect Correct answer

from inattention on the part of the attending individual.

Correct Incorrect Correct answer

from the heat process itself.

Correct Incorrect Correct answer

39. Question

The recreational vehicle endorsement (OPCF 32) provides coverage for which of the following:

a motorcycle, snowmobile, and trail bike

Correct Incorrect Correct answer

motor scooter, plane and motorboat

Correct Incorrect Correct answer

snowmobile, trail bike, minicycle and dune buggy

Correct Incorrect Correct answer

Both a and b

Correct Incorrect Correct answer

40. Question

The standard SPF 1 is

forerunner for all other automobile policies

Correct Incorrect Correct answer

the same for all provinces

Correct Incorrect Correct answer

is an Alberta specific policy

Correct Incorrect Correct answer

is used by the government insurance plan

Correct Incorrect Correct answer

41. Question

What statement is incorrect?

Commercial property policies may be written on a Fire & EC, Named Perils or All Risks coverage.

Correct Incorrect Correct answer

Building coverage includes growing plants used for decorative purposes when the insured owns the building.

Correct Incorrect Correct answer

Equipment includes fittings, fixtures, tools and contents of every description except stock.

Correct Incorrect Correct answer

Stock includes merchandise of every description but excludes packaging, wrapping and advertising materials.

Correct Incorrect Correct answer

42. Question

The General Conditions

apply only to fire insurance risks.

Correct Incorrect Correct answer

are identical to Statutory Conditions in other provinces.

Correct Incorrect Correct answer

are established by court precedents.

Correct Incorrect Correct answer

may include sections of the Civil Code that govern insurance policies.

Correct Incorrect Correct answer

43. Question

The Family Protection Endorsement (OPCF 44) provides coverage for which of the following

the third party's inadequate liability coverage of the insured

Correct Incorrect Correct answer

the insured's extended family for losses or damage due to a not a fault accident as a result of pain and suffering

Correct Incorrect Correct answer

loss of income for any member of the insured's family

Correct Incorrect Correct answer

the Insured amount that he or she is legally entitled to recover for an inadequately insured motorist for compensatory damages in respect to bodily injury or death of an insured person up to their own limits

Correct Incorrect Correct answer

44. Question

No Insurer shall use a form of application, policy, endorsement, or renewal or continuation certificate in respect of automobile insurance other than:

An approved FSRA (formerly FSCO) form

Correct Incorrect Correct answer

A form published by RIBO

Correct Incorrect Correct answer

A form approved by the Superintendent

Correct Incorrect Correct answer

A form approved by the Lieutenant Governor

Correct Incorrect Correct answer

45. Question

The general purpose of the Liability Coverage Section is to give the Insured protection for

injuries caused to others when the Insured is negligent and held legally liable

Correct Incorrect Correct answer

careless use of other peoples property which the insured borrows

Correct Incorrect Correct answer

claims for injuries done to others whether or not the Insured is negligent

Correct Incorrect Correct answer

negligently caused damage to his/her own property

Correct Incorrect Correct answer

46. Question

The policy that covers virtually any contents at specified locations, newly acquired locations, in transit and in the custody of sales people is

Small Retail Business Package

Correct Incorrect Correct answer

Commercial Property Floater

Correct Incorrect Correct answer

Commercial Building, Equipment and Stock form

Correct Incorrect Correct answer

Office Equipment Floater

Correct Incorrect Correct answer

47. Question

Insurance to value means coverage is

subject to a Stated Amount Clause.

Correct Incorrect Correct answer

based on 80% of the item's value.

Correct Incorrect Correct answer

based on higher limits reflecting the replacement value.

Correct Incorrect Correct answer

to the full value of the property.

Correct Incorrect Correct answer

48. Question

With this endorsement, the insurer agrees that no depreciation will be applied in the event of the repair or total loss of the insured vehicle. The coverage is subject to a deductible.

SEF 20

Correct Incorrect Correct answer

SEF 38

Correct Incorrect Correct answer

SEF 43R

Correct Incorrect Correct answer

SEF 44

Correct Incorrect Correct answer

49. Question

A broker sold an auto policy to his client. The client wanted to know the period of time during which the insurance is to apply. This is called the

Effective date

Correct Incorrect Correct answer

Policy period

Correct Incorrect Correct answer

Due date

Correct Incorrect Correct answer

Expiry date

Correct Incorrect Correct answer

50. Question

What statement is correct with respect to surety bonds?

A bid bond is required as evidence that the construction job will be properly completed in accordance with the specifications.

Correct Incorrect Correct answer

A labour and material bond is provided by suppliers of labour and material on a project to ensure they are both there in a timely fashion.

Correct Incorrect Correct answer

An administration bond falls under the category of a Fiduciary bond.

Correct Incorrect Correct answer

Examples of fiduciaries include contractors.

Correct Incorrect Correct answer

51. Question

Statutory Condition 13, Replacement: Under this Statutory Condition,

an insured may elect to have damaged property repaired, rebuilt, or replaced.

Correct Incorrect Correct answer

an insurer may elect to have damaged property repaired, rebuilt, or replaced.

Correct Incorrect Correct answer

when the replacement option is chosen, it is still subject to the amount of insurance.

Correct Incorrect Correct answer

when the replacement option is chosen, there is unlimited time for completion of the work.

Correct Incorrect Correct answer

52. Question

On the Standard Auto Policy Application which of the following areas are not common rating factors that affect the rates:

Age, gender and marital status, driving record and vehicle usage

Correct Incorrect Correct answer

Territory and distance driven annually, vehicle usage, and driving experience.

Correct Incorrect Correct answer

Vehicle description, other regular drivers and coverages

Correct Incorrect Correct answer

Third party liability, Accident benefits and Uninsured motorist

Correct Incorrect Correct answer

53. Question

With respect to reinsurance, which statement is incorrect?

The sole reason for reinsurance is to share the insurer's risk

Correct Incorrect Correct answer

Treaty reinsurance is automatic

Correct Incorrect Correct answer

Facultative reinsurance is arranged on individual risks

Correct Incorrect Correct answer

The two methods of reinsurance is proportional and non-proportional

Correct Incorrect Correct answer

54. Question

Direct loss

is the loss that arises from the loss or damage to the property

Correct Incorrect Correct answer

cannot be covered under a fire policy

Correct Incorrect Correct answer

refers to the value of the physical property that is damaged or destroyed

Correct Incorrect Correct answer

is similar to a loss of rental income, which occurs as a result of an insured peril

Correct Incorrect Correct answer

55. Question

Insurance companies must make settlement payments to an insured:

within 60 days of receipt of application for accident benefits in the case of medical, rehabilitation and attendant care benefits

Correct Incorrect Correct answer

within 1O weeks of receipt of a completed application for no fault weekly benefits

Correct Incorrect Correct answer

within a reasonable time after receipt of an accident benefits claims, but no later than one year

Correct Incorrect Correct answer

within 30 days of receiving the application for accident benefits in the case of death, funeral and compensation for other expenses

Correct Incorrect Correct answer

56. Question

Barbara has a vehicle that is not licensed under the Highway traffic Act in Alberta. What is name of the form used to write this type of policy on.

Owner's form

Correct Incorrect Correct answer

The application

Correct Incorrect Correct answer

The cover note

Correct Incorrect Correct answer

Liability card

Correct Incorrect Correct answer

57. Question

The Comprehensive Homeowner’s policy is a package that provides insurance protection with respect to the following:

Dwelling building, Detached Private Structures, Personal Property, Additional Living Expenses, Liability and Extensions of the above coverages, or additional personal property coverages. or both, at the insured's option.

Correct Incorrect Correct answer

Dwelling building, Detached Private Structures, Personal Property, Increased Living Expenses, Liability and Extensions of the above coverages, or additional personal property coverages, or both, at the insured's option.

Correct Incorrect Correct answer

Dwelling building, Attached Private Structures, Personal Property, Additional Living Expenses, Liability and Extensions of the above coverages, or additional personal property coverages, or both, at the insured's option.

Correct Incorrect Correct answer

Dwelling building, Detached Private Structures, Personal Property, Additional Living Expenses, Third Party Liability Only and Extensions of the above coverages, or additional personal property coverages, or both, at the insured's option.

Correct Incorrect Correct answer

58. Question

Which statement is not true about Commercial General Liability policies

It can be a claims made policy or an occurrence policy

Correct Incorrect Correct answer

It is a flexible policy, designed to take care of most commercial liability exposures

Correct Incorrect Correct answer

It has an aggregate and an occurrence limit

Correct Incorrect Correct answer

It covers Tenants Legal Liability for any kind of loss to rented premises for which the insured is legally liable

Correct Incorrect Correct answer

59. Question

What type of insurance policy would cover a case of libel or slander brought against the insured?

This would be covered under the legal expenses of the homeowners policy.

Correct Incorrect Correct answer

This would be covered under a Crime Policy.

Correct Incorrect Correct answer

This would be covered under a Liability policy.

Correct Incorrect Correct answer

This would not be covered as it is considered uninsurable.

Correct Incorrect Correct answer

60. Question

Either the failure to do what a reasonable and prudent person would do in a given situation, or what such a person wouldn’t do in a given situation.

Gross negligence

Correct Incorrect Correct answer

Onus of proof

Correct Incorrect Correct answer

Negligence

Correct Incorrect Correct answer

Priorities of payment

Correct Incorrect Correct answer

61. Question

Which of the following is not true?

A friendly fire is a fire intentionally kindled in a place provided for it.

Correct Incorrect Correct answer

Fires unintentionally kindled and occurring in places where there should not be a fire are also known as hostile fires.

Correct Incorrect Correct answer

When a fire leaves the place provided for it and ignites something outside, the original fire is a hostile fire.

Correct Incorrect Correct answer

When a fire leaves the place provided for it and ignites something outside, the secondary fire is a hostile fire

Correct Incorrect Correct answer

62. Question

Which of the following is not correct with Umbrella Insurance?

They either require other underlying liability coverage in place, or if they become a primary policy a large deductible will apply.

Correct Incorrect Correct answer

The main purpose is to supply high liability limits

Correct Incorrect Correct answer

They are written on a claims made or occurrence basis

Correct Incorrect Correct answer

They may be useful when world wide liability coverage is required

Correct Incorrect Correct answer

63. Question

Your client calls and asks you to suspend coverage from his vehicle while he Is going South for four months in the winter. As an educated broker, you would advise which of the following:

request that his insurer suspend coverage by using the Suspension of Coverage Endorsement (OPCF 16)

Correct Incorrect Correct answer

cancel his policy

Correct Incorrect Correct answer

have collision coverage and comprehensive coverage deleted from the policy but leave the rest of the policy in tact.

Correct Incorrect Correct answer

Advise the client to leave all coverage in place.

Correct Incorrect Correct answer

64. Question

Co-insurance is the clause that:

is in the homeowners/condominium/tenant policies

Correct Incorrect Correct answer

encourages insureds to carry adequate amounts of insurance

Correct Incorrect Correct answer

is in auto insurance policies

Correct Incorrect Correct answer

is in the Insurance Act of the Province of Ontario

Correct Incorrect Correct answer

65. Question

The insurer will pay the least of the following:

The actual cash value of the property at the time of the loss or the original purchase price of the property, the financial interest the insured has in the property and the amount of the insurance applicable to the item.

Correct Incorrect Correct answer

The actual cash value of the property at the lime of the loss, but not the original purchase once of the property, the financial interest the insured has in the property and the amount of the insurance applicable to the item.

Correct Incorrect Correct answer

The actual cash value of the property at the time of the loss or the original purchase price of the property, the financial interest the insured had In the property before he/she purchased the policy and the amount of the insurance applicable to the Item.

Correct Incorrect Correct answer

The actual cash value of the property before the loss occurred, the financial interest the Insured has in the property and the amount of insurance applicable to the item plus taxes.

Correct Incorrect Correct answer

66. Question

The minimum limit of auto liability in Quebec is

$50,000

Correct Incorrect Correct answer

$200,000

Correct Incorrect Correct answer

$500,000

Correct Incorrect Correct answer

$1,000,000

Correct Incorrect Correct answer

67. Question

What is the priority of payment in Ontario for Bodily injury

$10,000

Correct Incorrect Correct answer

$180,000

Correct Incorrect Correct answer

$190,000

Correct Incorrect Correct answer

$200,000

Correct Incorrect Correct answer

68. Question

Perils under a Homeowners which are non-standard and could be endorsed onto the policy are

Seepage and Leakage

Correct Incorrect Correct answer

Earthquake

Correct Incorrect Correct answer

War

Correct Incorrect Correct answer

Terrorism

Correct Incorrect Correct answer

69. Question

Following a loss, the insured must:

Notify the Insurance company immediately, de liver to the Insurer, as soon as possible, a proof of loss form, state the amount claimed, state the interest of the insured and all others in the property, give details of any other applicable insurance and if required, provide an inventory or undam aged property with documentation.

Correct Incorrect Correct answer

Notify the insurance company immediately, deliver to the insurer, within 30 days, a proof of loss form, state the amount claimed, state the interest of the insured and all others in the property and give details of any other applicable insurance.

Correct Incorrect Correct answer

Notify the insurance company within 7 days, deliver to the insurer, as soon as possible, a proof of loss form, state the amount claimed, state the interest of the insured and all others in the property and give details of any other applicable insurance.

Correct Incorrect Correct answer

Notify the insurance company Immediately, deliver to the insurer, within 45 days, a proof of loss form. state the amount claim ed, state the interest of the insured and all others in the property, give details of any other applicable insurance and if required, provide an inventory of undamaged property with documentation

Correct Incorrect Correct answer

70. Question

Which of the following is not a legal person

MRD Training & Consulting

Correct Incorrect Correct answer

MRD Training & Consulting Inc.

Correct Incorrect Correct answer

MRD Training & Consulting Ltd.

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Melanie Needham o/a MRD Training & Consulting

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71. Question

Which term is used in the insurance industry to refer to insurance that includes Property and Casualty?

General Insurance

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Commercial Insurance

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Specialty Insurance

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Other Than Life Insurance

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72. Question

What are the five secondary functions of insurance?

Aiding security, aiding credit, promoting loss prevention, providing capital, encouraging diversity of location

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Aiding security, aiding credit, promoting loss prevention, providing capital, encouraging diversity of risk

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Aiding security, aiding credit, promoting loss prevention, providing capital, providing employment

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Aiding security, aiding credit, promoting loss prevention, providing capital, writing large volumes of business

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73. Question

What type of insurance would assist an engineer that made a mistake in the direction of a contract he was responsible for?

Director's & Officers Insurance

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Professional Liability Insurance (E&O)

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Commercial General Liability Insurance

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Surety Bonds

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74. Question

Which type of insurance company uses salaried employees to sell and service their insurance policies to the general public?

Independent Brokerage Organization

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Exclusive Agency Organization

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Direct Writer Organization

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Independent Agency Organization

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75. Question

What is the process that allows a broker or agent to identify and analyze risks a client is exposed to?

Policy Management

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Claims Management

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Risk Management

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IT Management

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76. Question

Indemnity is calculated in two standard methods when it comes to property policies, what are the methods?

Replacement Cost and Guaranteed Replacement Cost

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Actual Cash Value and Guaranteed Replacement Cost

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Fair Market Value and Actual Cash Value

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Actual Cash Value and Replacement Cost

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77. Question

Which policy section includes the amounts to be insured?

Coverage Summary

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Policy Conditions

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Insuring Agreements

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Additional Conditions

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78. Question

What is the statute of limitations?

A law that determines how much an insured can recover from their insurer.

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A law that determines the period of time that an insured can take legal action.

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A law that determines the period within which the insurer can finalize the claim submitted by the insured.

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The time frame dictated in the policy outlining the time frame that a claim can be submitted by the insured.

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79. Question

If an insured had a concern regarding a broker, agent or insurer which organization would they approach for help?

Canadian Insurance Adjusters Association (CIAA)

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Registered Insurance Brokers of Ontario (RIBO)

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Consumer Information Centre of the Insurance Bureau of Canada (IBC)

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The Insurance Institute of Canada (IIC)

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80. Question

Who enforces the Insurance Companies Act?

The Financial Services Regulatory Authority (FSRA)

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The Financial Services Commission of Ontario

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The Office of the Superintendent of Financial Institutions (OSFI)

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The Insurance Institute of Canada (IIC)

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81. Question

If sewer drains within a home back up, what other condition must also exist for sewer back up coverage to apply?

The back up must have occurred within 24 hours of a recorded storm.

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Ground and/or surface waters are on the insured's property or outside the home.

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Ground and/or surface waters are not on the insured's property or outside the home.

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Maintenance or lack thereof with respect to the sewer systems must be proven to access coverage.

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82. Question

What sections are included in a Comprehensive Tenants Policy?

Personal Liability, Personal Property and Loss Assessment Coverage

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Personal Property, Personal Liability, Detached Private Structures

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Personal Property, Personal Liability, Additional Living Expenses

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Personal Property, Personal Liability, Extensions of Coverage

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83. Question

What are the two main types of Business Interruption Insurance?

Profits and Actual Loss Sustained

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Income Replacement and Extra Expense

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Earnings Coverage and Profits Coverage

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Gross Earnings and Actual Loss Sustained

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84. Question

What is the purpose of the Minor Injury Guideline?

To assist in diagnosing insurable injuries.

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To establish the accident benefits available for all injuries.

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To provide a treatment framework for minor injuries.

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Provides a list of minor injuries that would be considered insurable.

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85. Question

The Non-Owned Automobile policy provides protection for which type of liability?

Personal Liability

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Cross Liability

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Commercial Liability

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Vicarious Liability

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86. Question

What is the last link in a chain of events referred to as?

Proximate Cause

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Remote Cause

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Immediate Cause

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Effective Cause

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87. Question

What is an example of an endorsement that provides permission?

OPCF 19A- Agreed Value

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OPCF20 – Transportation Replacement

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OPCF6D – Driving Training School

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OPCF43A – Waiver of Depreciation

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88. Question

What does the term flood actually refer to?

Overland Water

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A body of salt water

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Sewer water and waste water

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A body of fresh water

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89. Question

What benefit would an insured receive if they were to participate in an insurance companies telematic initiative?

Premium refund when safe driving is proven.

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Premium discount for safe driving.

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Premium refunds each year the client is claims free.

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Various inducements that change from company to company.

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90. Question

After a privacy breach has occurred, what should an organization do to learn from the experience and prevent future breaches from occurring?

Determine the cause and discuss it with the team as a lesson learned.

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Discuss with the insurer how to obtain better coverage for future events.

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Write a privacy policy and share it with internal staff.

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Determine how it happened, identify was it something that could have been prevented and take appropriate steps to reduce the chances of it happening again.

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91. Question

A liability policy typically covers what type of damages?

General damages

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Compensatory damages

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Punitive damages

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Special damages

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92. Question

Which endorsement when applied to an automobile policy will limit the total amount payable to a value predetermined at the time the endorsement is applied?

SEF 19B – Limitation of Amount Endorsement

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SEF 35 – Emergency Service Expenses

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SEF 27 – Legal Liability for Damage to Non-Owned Automobile Endorsement

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SEF 20 – Loss of Use Endorsement

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93. Question

Which party brings legal action against another?

The Defendant

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The Plaintiff

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The First Party

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The Insurer

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94. Question

Water that is found beneath the earth’s surface is the description of which type of water damage?

Ground Water

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Overland Water

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Sewer Back Up

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Flood Water

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95. Question

What is the risk exposure of storing manure for future use as either fertilizer or fuel?

Explosion or rupture

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Fatality of livestock residing close to the manure.

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Power disruption leading to improper ventilation.

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The values of the manure that is not reported to the insurer.

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96. Question

Does an injury need to meet a verbal threshold to sue for economic loss?

Yes, the verbal threshold is always required to sue.

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No, the Insurance Act prevents people from suing for economic loss.

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No, it is not required to sue for economic loss.

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Yes, the verbal threshold is required to sue for economic and non-economic loss.

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97. Question

What is the limit for physical damage coverage under OAP 1 – Uninsured Automobile Coverage?

There is no physical damage coverage under this section of the policy. This means that if you're in an accident with an uninsured driver, you'll likely only be covered if you have collision coverage on your policy.

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$25,000

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$30,000

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$50,000

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98. Question

What type of home is typically eligible for all risk coverage and replacement cost?

Newer homes in transit.

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Older homes at a fixed location.

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Older homes in transit.

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Newer homes fixed in place.

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99. Question

What are property and casualty insurance policies known as?

Valued contracts

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Contracts of compensation

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Contracts of indemnity

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Contracts

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100. Question

A dwelling is valued at $350,000 and insured at a .36 rate/100. Calculate what the annual premium would be.

$1,260

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$126.50

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$12,650

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None of the above

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Copy of OTL Agent Practice Exam Five- – June 6, 2025

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