RIBO Practice Exam One-2019

Question 1 of 64

Question 2 of 64

A void contract is a contract

That has been cancelled
That has not yet been fulfilled
That could be nullified if one party changed his or her mind
That never had any legal existence

Question 3 of 64

According to the Statutory Conditions (General Conditions in Quebec) the insured

Can abandon the damaged property to the insurer.
Must take all reasonable steps to prevent further loss or damage to the property.
Must arrange for repair of the damaged property immediately.
All of the above

Question 4 of 64

An automobile policy issued in Ontario provides coverage in

Canada and the contingent United States.
Canada and the contiguous United States.
Canada and the continental United States.
Canada and the United States.

Question 5 of 64

Many policyholders pay premiums to an insurer who

Invests the money to make a profit that is owned and shared by all policyholders.
Manages the fund and pays losses from it to those members who suffer them.
Invests the money to make a profit for shareholders who expect a return on equity.
Manages the fund and pays a few of the losses from it to certain members who suffer the losses.

Question 6 of 64

A legal person is one who

Is an individual
Is over three years old
Can sue and be sued
Owns property

Question 7 of 64

Under Requirements After Loss (Own Damage), the insured must deliver a proof of loss to the insurer within

15 days after the date of loss.
30 days after the date of loss.
60 days after the date of loss.
90 days after the date of loss.

Question 8 of 64

An insurer agrees to indemnify an insured against loss or damage arising out of the happening of a certain event provided the event is

Fortuitous and accidental
Accidental and in the future
Intentional and in the future
Wilful and fortuitous

Question 9 of 64

Who, amongst the following group, would be considered to have insurable interest?

A member in a health club
A citizen in a community centre
A fur storage operator in a fur left in his care
A future heir to property

Question 10 of 64

Which of the following are considered as part of the Dwelling Building coverage?

Trees, shrubs and garden tractors
Building fixtures and storm doors
Awnings, plants and lawns
Garden shed and outdoor trees

Question 11 of 64

Fidelity insurance is designed to protect the client from

Robbery outside the premises.
Forgery of cheques at an overseas distribution office.
Infidelity from within the organization.
Acceptance, in good faith, of counterfeit money.

Question 12 of 64

Under Time and Manner of Payment, if no appraisal is carried out, the insurer must make the required payment within

30 days after receipt of the proof of loss.
60 days after receipt of the proof of loss.
90 days after receipt of the proof of loss.
12 months after receipt of the proof of loss.

Question 13 of 64

Insurance requires the existence of a group whose members contribute to a fund from which losses are paid. On the outgoing side, it is important that

The income of the fund be sufficient to meet the losses paid out.
Those less likely to have losses contribute lower premiums.
Those requiring higher amounts contribute higher premiums.
Inflated losses or improper claims be denied.

Question 14 of 64

Actual cash value upholds the principle of

Utmost Good Faith
Contribution
Capacity
Indemnity

Question 15 of 64

To which of the following items insured under a Homeowners Policy does a limit apply when the item is damaged whatever the type of loss?

Stamp and coin collections
Furs
Bicycles
Securities

Question 16 of 64

A surety bond protects the

Principal
Obligee
Third Party
Surety

Question 17 of 64

When the insured automobile is damaged in an accident, which of the following is true?

When the insurer has paid for the claim, it is the insured's responsibility to dispose of the salvage.
The insurer's maximum liability is the least of the actual cash value of the automobile or the cost to repair or replace it with one of like kind and quality.
The insured's only responsibility is to advise the insurer of the accident promptly.
The insured is not permitted to make any repairs whatsoever until the insurer has thoroughly inspected the automobile.

Question 18 of 64

The Law of Large Numbers

Reduces the chance that an event may happen.
Affects the reliance to be placed on a given probability.
Improves loss prevention and safety.
Identifies loss exposures.

Question 19 of 64

Three associated principles of indemnity are

Salvage, actual cash value and consideration
Salvage, contribution and subrogation
Subrogation, replacement cost and utmost good faith
Compensation, lawful object, and subrogation

Question 20 of 64

Rust is an example of which general category of exclusions usually found in all risks policies?

Wear and tear losses
Invisible Terms
Generally not insurable
Thos that can be insured elsewhere

Question 21 of 64

After being involved in an accident where injuries occurred, an insured must

Contact a lawyer immediately.
Comply with all requirements found in the policy.
Try to settle amicably with the injured parties.
Not do anything until he knows whether there will be a claim.

Question 22 of 64

A large number of insurance companies operate through the independent agency system. That is, they

Hire, train and license their own employees to be their sales force.
Appoint independent agents and brokers to bring clients to them.
Contract with a general agent who has authority to manage all of their business.
Employ agents to secure contracts for their employers in contractual matters.

Question 23 of 64

An insurance contract contains all of the elements of any other legal contract. One of the elements that must also be contained in a valid contract of insurance is

Utmost good faith
Consideration
Offer and acceptance
Legality of object

Question 24 of 64

The Homeowners Broad Form

Provides all risks coverage for buildings but only named perils for contents.
Provides broader coverage for the homeowner than the Homeowners Comprehensive Form.
Provides all risks coverage for both buildings and contents.
Costs more than a Homeowners Comprehensive Form.

Question 25 of 64

Which of the following may trigger a claim under a liability policy?

An illegal act
A criminal act
An intentional act
A negligent act

Question 26 of 64

Which of the following statements is true?

A newly acquired automobile is automatically insured for a specified time period if it replaces another insured automobile of similar type.
It is impossible to insure more than one automobile on the same policy.
An automobile with a trailer attached is considered as two vehicles for purposes of Accident Benefits limits.
No coverage applies to temporary substitute automobiles under the Third Party Liability coverage.

Question 27 of 64

The Insurance Act of Ontario includes regulations relating to the

Duties and responsibilities of agents and brokers.
Licensing of adjusters only.
Licensing of insurance companies only.
Rate of commission to be paid to agents.

Question 28 of 64

Which of the following is NOT a factor in the insurance definition of fire?

There must be an actual ignition.
Something that ought not to be on fire must be on fire.
There must be something in the nature of an accident.
It must be a friendly fire.

Question 29 of 64

For people who live in rented premises, the Tenants Comprehensive Form

Provides all risks coverage of contents but does not include any building coverage.
Provides all risks coverage of contents but does not include liability coverage.
Covers against loss caused by named perils only.
Contains no provisions for paying for physical damage to the dwelling caused by burglary.

Question 30 of 64

The usual test of liability at law is:

Were the actions of the defendant reasonable given the circumstances?
Did the defendant fail to act where a prudent person would not have failed?
Was the injury or damage caused by negligence?
Would the injury or damage have occurred regardless of the defendant’s actions or failure to act?

Question 31 of 64

A deductible

Cannot be used to reduce the premium on a policy.
Does not apply to certain types of losses.
Eliminates coverage for large losses.
Disappears if the amount of the loss exceeds the deductible.

Question 32 of 64

A broker/agent is responsible for

Writing only those classes of business acceptable to his/her insurer.
Investigating and assisting in the adjustment of losses.
Terminating a policy promptly if the premium is not paid.
Delegating given authority to someone else he/she feels is competent.

Question 33 of 64

A hostile fire

Is intentionally kindled
Is in a place provided for it
(a) and (b)
occurs in a place where it should not be.

Question 34 of 64

Under the Condominium Unit Owners forms, the Loss Assessment coverage

Is also called Unit Additional Protection coverage.
Covers the unit owner's share of a shortfall in the Condominium Corporation's building insurance.
Applies to the unit owner's improvements and betterments.
All of the above

Question 35 of 64

A Commercial General Liability policy covers

Premises and operations
Products and completed operations
Elevators and escalators
All of the above

Question 36 of 64

In collecting a premium deposit, the agent is required to

Collect the balance of the premium within 30 days.
Notify the insurer immediately by phone of the deposit collected.
Place the deposit in a trust account.
Place the deposit in an operating account.

Question 37 of 64

The basic fire insurance policy covers which of the following perils?

Fire, windstorm and smoke
Fire, lightning and limited explosion
Fire, explosion and water escape
Fire, lightning and vandalism

Question 38 of 64

What is the effect of adding a Personal Articles endorsement to a Homeowners Comprehensive Form?

It removes the limits from those items to which the endorsement applies.
It adds all risks coverage to the policy.
It enables the insured to schedule certain items and insure them for specified amounts.
It relieves the insured of the need to obtain appraisals.

Question 39 of 64

An umbrella policy

Is purchased to avoid gaps in coverage.
Is purchased when a high limit is needed on a specific type of coverage.
Covers the self-insured retention.
Provides limited territorial coverage.

Question 40 of 64

Insurance applications

Where required, must always be in writing prior to policy issuance.
Are all the same.
Are prescribed by provincial governments for all classes of business.
Describe the characteristics of the risk and the amount of insurance required.

Question 41 of 64

Which of the following is covered under the basic fire insurance policy?

The increased cost of repairs due to by-laws
Fire damage occurring when the insured was repairing his roof after a windstorm
Fire damage to an empty house from which the last tenants moved 3 months ago
None of the above

Question 42 of 64

If an Ontario policy is issued and it differs from the application submitted

The policy is null and void.
The insured must accept it as is.
The insured has 7 days to accept or reject it.
the insured has 14 days to accept or reject it.

Question 43 of 64

A loss payable clause

Protects a loss payee to the extent that claims settlement is made jointly to the insured and the loss payee.
Offers the best possible protection of the insurable interests of a loss payee.
Sets out certain rights and obligations for both the loss payee and the insurer.
Expresses an agreement which is independent of the agreement between the insurer and the insured.

Question 44 of 64

Which of the following is NOT an Extended Coverage peril?

Water Escape
Smoke
Explosion
Earthquake

Question 45 of 64

Additional exposures that can usually be added to a Farm policy by endorsement include

Stock and equipment
Private dwelling and contents
Farm machinery and equipment
Explosion coverage on the dwelling

Question 46 of 64

With respect to past licence experience, the insurer wants to know of any suspension or termination of any driver’s licence within the last

3 years
4 years
5 years
6 years

Question 47 of 64

A material fact

Is any fact that relates to the item insured.
Is anything that could affect the acceptability of the risk.
Is the subject of insurance.
Need only be divulged if the insured is asked about it.

Question 48 of 64

An example of an insurable loss under the basic fire insurance policy is

A fire loss arising out of a revolution
Vandalism to a vacant warehouse
Damage to an automobile when the garage roof collapses due to snow
Smoke damage to the insured's newly painted house, caused by a fire next door

Question 49 of 64

The susceptibility of paper to water damage is an example of

Damageability
Implacability
Combustibility
Perishability

Question 50 of 64

Which of the following is NOT an objective of no-fault insurance?

Allowing the claimant to recover from his own insurer
Increasing legal fees and court costs
Prohibiting liability lawsuits unless certain criteria are met
Reducing the amount of litigation

Question 51 of 64

Temporary insurance must be terminated

By a regular letter
By a telephone call
By the insured only
In exactly the same way as a policy

Question 52 of 64

Which of the following does NOT enter into the calculation of the amount an insurer will pay for a loss?

The actual cash value of the property
The amount of the mortgage
The insured's interest in the property
The amount of applicable insurance

Question 53 of 64

Insurance that covers the costs of blank books and of recopying from source material to reproduce an insured’s documents is found under

Virtually all property policies
Valuable Papers and Records
Accounts Receivable
Electronic Data Processing

Question 54 of 64

The Income Replacement Benefit deductible is

1 week
2 weeks
4 weeks
12 weeks

Question 55 of 64

What provisions are included in the basic fire insurance policy for removal of property to prevent further loss or damage?

Automatic coverage is given for a limited time and subject to certain conditions.
Automatic coverage applies for 7 days and regardless of the expiry date of the policy.
Optional coverage is available for a nominal additional premium.
Automatic coverage covers only at one single additional location.

Question 56 of 64

An example of a gratuitous bailee is

Your cousin who agrees to store your furniture in his basement for a small fee until your new home is constructed.
The repair shop where you leave your sewing machine to be cleaned.
A receptionist who offers to watch your briefcase while you dine with a business associate.
A moving and storage firm hired to move the furniture from your cousin’s basement when your house is ready to be occupied.

Question 57 of 64

To a person convicted of operating the automobile while impaired by alcohol or drugs, the insurer is NOT required to pay

Attendant Care benefits.
Death or Funeral benefits.
Income Replacement benefits.
Any of the above

Question 58 of 64

Common Law is

Written Law
Statute Law
Case Law
Codified Law

Question 59 of 64

The basic fire insurance policy excludes loss or damage when the insured knows that the building insured, or containing the property insured, has been vacant or unoccupied for

30 consecutive hours or more
More than 30 consecutive days
30 consecutive days or more
Less than 30 consecutive days

Question 60 of 64

Which of the following would NOT be covered under the All Perils coverage?

During a riot, the rioters slash the insured's tires among other items.
Someone unknown scratches the insured's automobile and defaces it.
The insured's GPS, mounted on the dashboard, is damaged by fire.
The insured's tire is ruined as a result of a blowout.

Question 61 of 64

In contract law, the rules of offer and acceptance state

The acceptance must be unconditional and communicated between the parties.
The offer can be accepted at any time so long as it has not been withdrawn.
An offer, once accepted, can be revoked provided neither party has fulfilled any of the terms.
Contracts cannot be entered into lightly and are binding even if there are mistakes about the intent.

Question 62 of 64

Which of the following statements is true?

Statutory Conditions (Common Law) and General Conditions (Quebec) are similar but not identical.
Statutory Conditions (Common Law) impose obligations only on the insurer.
General Conditions (Quebec) provide safeguards for the insured and impose obligations upon the insurer.
Insurers are free to decide which Conditions they wish to include in their policies.

Question 63 of 64

A special characteristic of the retail store policy used to cover customers’ clothing that has been accepted for cleaning or laundering by a drycleaner is that

Coverage applies to the insured’s own stock and the property of others held for sale.
The policy is written on a named perils basis for goods accepted for dyeing.
A large deductible is applied to goods that must leave the premises for processing.
The policy covers damage regardless of any legal responsibility on the part of the insured.

Question 64 of 64

If involved in an automobile accident, you can claim under the Uninsured Motorist coverage

When you have no insurance at all.
When the third party's limits are too low to cover the entire claim.
For Property Damage but not for Bodily Injury.
Only if the other motorist was at fault.

RIBO Practice Exam One-2019

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