Practice Exam 2
62. A personal articles floater policy provides automatic cover for acquisitions for a limit of 30 days for the following limit
a. $2,000 b. $5,000 c. $1,000 d. $1,500
43. The Standard Homeowners policy with a limit under Section A of $100,000 if an insured owns two detached outbuildings worth $1000 each and both are destroyed as a result of a single accident covered by an insured peril, what amount of coverage would be available to the insured? His policy contains a deductible of $500.
a. $2,000 b. Nothing as Section A only covers the principle building c. $1,000 d. $1,500***
76. The Motor vehicle Administration Act requires specific limits to comply with the Act. These limits are
a. $200,000*** b. $100,000 c. $250,000 d. $210,000
78. When the minimum limits of $200,000 inclusive coverage is carried under an automobile policy of insurance under Section A, what is the limit that has priority for property damage to third parties?
a. $5,000 b. $7,500 c. $10,000*** d. $100,000
32. A building worth $200,000 is insured for $125,000 in a property policy containing an 80% coinsurance clause. Under what specific amount of loss would the coinsurance penalty not be applied if the waiver of coinsurance is 2% subject to a maximum of $5,000.
a. $5,000*** b. $2,500 c. $4,000 d. $3,200
60. A building worth $400,000 is insured for $240,000 and the property insurance policy contains an 80% coinsurance clause. A fire loss occurs causing damage in the amount of $84,000 and based on the foregoing, the insured will recover
a. $84,000 b. $67,200 c. $63,000*** d. $80,000
57. A building worth $200,000 is insured for $125,000 in a property policy containing an 80% coinsurance clause. The building is totally destroyed by the peril of fire. The insured will recover which of the following amounts
a. $97,662.50 b. $100,000 c. $125,000*** d. $156,250
54. The Homeowners Broad Form differs from the Basic Homeowners policy in that the Additional Living Expense is as follows
a. 10% of Coverage A or $1,500 whichever is the lesser b. 20% of Coverage A or $2,500 whichever is the lesser c. 20% of Coverage A or $1,500 whichever is the greater d. None of the above***
22. The conditions of a policy of "fire" insurance stipulate that the insurance coverage expires
a. 12:01am at the location of the property insured b. 12:01pm at the location of the property insured c. 12:01am at the address of the named insured*** d. 12:01pm at the address of the named insured
83. An Automobile application SAF #1 must be completed in full and if satisfactory to the insurance broker, the broker may in accordance with his agency agreement bind coverage. He may then issue the insured with a temporary Motor Vehicle Liability card valid for:
a. 15 days b. 21 days c. 30 days*** d. One year or six months depending on the policy term
31. An owner of a condominium unit has a condominium unit owner's policy. This policy provides protection that is different from the Basic homeowner's policy in the following areas.
a. 25% of Coverage C applicable to Additional Living Expense b. Improvements and betterment done by the unit owner to his own unit*** c. Special assessments ordered by the Condo Association relating the maintenance of the building d. All of the above
82. An Automobile application SAF #1 must be completed in full and the insured must divulge information regarding any convictions within the last:
a. 3 years*** b. 5 years c. 6 years d. 10 years
45. The Statutory Conditions for a fire insurance policy under the section "Requirements after Loss" states that the insured must give notice in writing and as soon as practicable file a proof of loss with the insurer. After the proof of loss has been filed with the insurer, loss is payable within __________ days
a. 5 days personally delivered b. 45 days c. 60 days*** d. 90 days
17. Rebating in any form is an offence under most Insurance Acts. Which of the following is considered rebating?
a. A broker accepts reduced commission from Insurer in order to secure business b. A broker agrees to accept less money then the premium shown on the policy* c. A broker charges the Insured a fee instead of standard commission d. A broker charges full premium to client and then purchases golf tee time for client
12. "Uberrima fides" means which of the following?
a. A broker must disclose all information to his insurer b. A broker must keep all information given by a client in strict confidence c. A broker must at all times act with the "utmost good faith" - a standard of honesty greater than good faith*** d. A broker must be competent when dealing with clients
28. A "peril" is best defined as
a. A chance of loss b. The possibility of loss c. The cause of loss*** d. The result of loss
89. A voided policy is best described as follows:
a. A contract that becomes void if an accident is not reported b. A contract that was never valid*** c. A contract that is cancelled after a breach by the insured d. A contract that has exclusions
3. Insurance is defined as follows
a. A contractual relationship where one party agrees to pay the loss of another b. An agreement of first party to reimburse the second party for a loss they suffered c. An agreement between two parties where the losses of one party are paid by the other d. A contractual relationship where one party for consideration agrees to reimburse another for loss caused by a named peril***
77. The SPF #6 Non-Owned Policy is intended to provide cover for
a. A firm who's cars are driven by their salesmen, who do not have any ownership of a motor vehicle b. A firm that doesn't own any vehicles but pays mileage to the salesmen who drive their own vehicles*** c. A firm who's owned vehicles are driven by any of their employees d. A firm who's owned vehicles are drive by the officers, directors, and shareholders of the company
35. Consequential Loss is defined as
a. A loss that affects the insured's family b. A loss that is an indirect result of an occurrence c. A loss that is a direct result of an occurrence d. A loss that indirectly affects a third party
100. A "Tort" is properly described as:
a. A tort is a wrong done to another in breach of a duty laid down by law b. A tort is a wrong done to you in breach of a duty laid down by law c. A tort is a disagreement between the insured and contractor in a contractual obligation d. A tort is a wrong done to another as a result of inadequate legal counsel
21. An Insured suffered a fire loss to his property and the company advised him that an independent adjuster will handle the loss. The Insured wants to know the role of the Independent Insurance adjuster. The broker advises the Insured that the role of the independent adjuster is to:
a. Act on behalf of the insurer to adjust the loss and receives his fee from the insurer b. Act on behalf of the insurer and the insured adjusting the loss for the insurer and receives his fee from the insurer*** c. Act for both the insurer and the insured adjusting the loss for both and receives his fee from the insurer d. Act on behalf of the insured adjusting the loss and receives his fee from the insured
80. Under Section A of SPF #1 Owners Policy, the insured agrees to:
a. Admit liability to the third party for damage done if he is at fault b. To appoint an adjuster that will obtain its fee from the insurer c. Appoint the insurer as his irrevocable attorney*** d. Retain legal counsel on behalf of the insurer
24. An insured telephones his broker to advise him that he has been involved in a single vehicle accident while on holidays, and wants repairs started to his vehicle immediately so he may continue his holiday. The broker reviews the policy of insurance and finds that the insured doesn't carry collision coverage on this vehicle due to its age. The broker should
a. Advise the insured that he should proceed with the repairs and contact the broker immediately upon his return from holidays b. Advise the insured that he will report the incident to the insurance company, and they will be in touch with him to advise him on how to proceed c. Advise the insured that he has no coverage under the policy of insurance and any repairs that he undertakes must be his responsibility. *** d. Advise the insured that he may not have coverage under the policy of insurance but he will discuss the matter with the insurance company and give him further instructions
23. An insured telephones his broker to advise him that he has been involved in a "minor" accident involving a third party. He wants to handle the matter himself without the involvement of his insurance company as he was "not at fault" and the damages were "minor". The broker should
a. Advise the insured the he will mark it in the file and report it to the insurance company if anything further should develop*** b. Advise the insured that as he has been made aware of the accident, he must report it to the insurance company as any claim brought about by the third party during the discovery period may jeopardize the insurer's rights c. Advise the insured to proceed with his negotiations with the third party, and if he runs into trouble to advise him and he will then get the company involved d. Advise the insured to seek legal assistance before agreeing to any settlement
66. The automobile Insurance policy provides, under the Section C Loss or damage to insured automobile, provides coverage for a temporary substitute automobile. Which statement most closely describes a temporary substitute automobile?
a. An automobile not owned by the insured, household residents, temporarily driven b. An automobile owned by the insured, driven only occasionally c. An automobile not owned by the insured, but owned by his dependent son d. An automobile owned by the insured, only driven when another car is being repaired***
13. A person wishing to start an insurance brokerage must have
a. An education at least the level of grade 12 b. The sponsorship of an Insurer to act as a broker for their company c. Taken an insurance course*** d. Paid a fee to the Insurance Council
1. Fiduciary refers to individuals or organizations that occupy positions of special trust or confidence. Which of the following would NOT be considered a position of special trust?
a. An insurance broker b. An insurance company c. A financial institute d. A travel advisor***
18. A Joint Stock company is
a. An insurance company that is owned by the policyholders b. An insurance company that issues assessable insurance contracts c. An insurance company made up of groups of people called "syndicates" d. An insurance company owned by its stockholders***
20. A Mutual Company is
a. An insurance company that is owned by the policyholders*** b. An insurance company that issues assessable insurance contracts c. An insurance company made up of groups of people called "syndicates" d. An insurance company owned by its stockholders
5. The Province of Alberta has a law that is known as the law of Absolute Liability. In an Automobile Accident, the Insured, his family, and third party have injuries. The insured has been charged and convicted of impaired driving. Under Automobile Liability the following statement is true
a. An insurer must pay to a minimum of $200,000 to an injured third party regardless of statutory faults, negligence, or breaches on the part of the insured*** b. An insurer must pay to a minimum of $300,000 to an injured third party regardless of statutory faults, negligence, or breaches on the part of the insured c. An insurer must pay to a minimum of $200,000 to all injured parties regardless of statutory faults, negligence, or breaches on the part of the insured d. An insurer must pay to a minimum of $500,000 to all injured parties
36. Risk is defined as
a. An unforeseeable event b. An unforeseeable occurrence c. A chance of loss*** d. Accidental and unforeseeable occurrence
85. The automobile Insurance application SAF #1, by law in the province of Alberta, unlike other applications for insurance makes in necessary for the broker to:
a. Answer all the questions from 1 to 13 for the insured and submit to the company b. Answer only the questions the insured can remember c. Have the insured sign the application after he has answered the questions he can remember*** d. Bring to the company's attention any answers you may feel the insured is not answering correctly, due to your personal knowledge
74. Under the standard owner's form SPF #1, Section C damage to an automobile occurring within the following territories would not be insured
a. Canada b. Continental United States c. Mexico*** d. Alaska
87. Under the Standard Owners form SPF #1, the following uses, unless permission is given by the insurer, are prohibited regardless
a. Carrying explosives b. Carrying passengers for compensation c. Rental or Lease of the automobile d. Any race or speed test***
25. Reinsurance is a contract between an insurance company and a reinsurance company to transfer some of his risk to another insurer. The re-insurer transacts business with insurers and the insured is not a party to this contract. There are several different types of reinsurance listed below. Pick the one type that is proportional reinsurance.
a. Catastrophic insurance b. Facultative reinsurance c. Excess of loss d. Quota share***
94. Which of the following is not covered under the Supplementary Payment Section of a Comprehensive Personal Liability policy?
a. Defense of the insured against claims and suits for negligence b. Cost to the insured of bonds required releasing property held by the court as security c. Interest on the insured portion of the judgement d. The amount of the actual judgement***
46. An insured suffers the loss of a pot roast as a result of a fire which, fortunately, was confined to the oven of the kitchen range. Such loss is deemed to be the result of a(n)
a. Direct fire b. Indirect fire c. Hostile fire d. Friendly fire***
19. Compensation or commission for the obtaining of insurance coverage may only be paid to any licensed person licensed for that class of business, however, if the broker charges a fee for the services of providing a policy of insurance, he must
a. Disclose the fee on his invoice to the insured b. Disclose the fee before binding the insurance c. Disclose the fee before the insured completes the application for insurance*** d. Not disclose the fee to the insurer
9. A contractor for the Insured has renovated the insured's building. As a result of these renovations, another tenant is allowed into the property and this tenant is a restaurant. The insured allows the tenant to occupy the premises but forgets to advise his broker of this new tenancy. The restaurant section of the building was damaged by fire as a direct result of the restaurant occupancy. The insurer may have a right to decline to compensate the insured for this loss because
a. Disclosure - the broker failed to notify the insurer of the change b. Consequential Loss - the loss was a consequence of the restaurant occupancy c. Material Change in Risk - the restaurant occupancy increased the likelihood of the loss*** d. Contributory Negligence - the occupancy of a restaurant contributed to the loss
29. The law has established that employers are responsible for the acts of their employees as long as they are acting within the scope of their duties. This is referred to as a Master Servant relationship. In the legal term it is known as
a. Employers Liability b. Employee as named insured c. Vicarious Liability*** d. Contractual Liability
50. A standard homeowners wording does not contain the following
a. Exclusions b. Premium to be charged*** c. Automatic extensions of cover d. Type of loss insured
4. Under Common Law, negligence is defined as
a. Failure to use care b. Failing to abide by the statute laws of the country c. Failure to exercise the degree of care expected of a reasonable and prudent person*** d. Failure to understand the Common Laws of the Country
72. An Owners Standard SPF #1, in accordance with statutory condition 4 Requirements where loss or damage to the automobile, the insured must do the following:
a. Have the automobile damage appraised and repaired within 30 days b. Have the automobile repaired within 30 days c. Protect the vehicle from further damage*** d. Turn the salvage over to the insurer before the loss has been settled
16. "Confidentiality" as it refers to the Code of Conduct applying to Brokers is that the broker must
a. Hold in strict confidence information acquired concerning business affairs of clients b. Not divulge any information unless authorized by the client to do so c. Not divulge any information unless required by law or conducting negotiations for the client d. All of the above***
99. Under a personal liability policy, in which the following circumstances would an insured have the protection from an insurer?
a. If the automobile is operated by a duly licensed chauffeur b. If the watercraft is equipped with an inboard motor over 50 HP c. If the watercraft is under 26 feet in length*** d. If the aircraft is operated by an employee who is a duly licensed pilot
68. In Section B Accident Benefits subsection 2 of the Standard Owners Form SPF#, funeral expenses are paid:
a. In respect to the death of the Head of Household only on accidental death b. In respect to the death of all dependents of the automobile driver, to a limit of $1,000 each c. In respect to the death of any one person in the automobile the sum of $2,000 d. In respect to the death of all occupants of the automobile, to a limit of $5,000 each ***
56. When articles are insured under a personal article floater, a "valued" item is one on which
a. In the event of loss, settlement is made on the basis of actual cash value subject to depreciation b. In the event of loss, the amount of insurance is agreed to be the amount payable*** c. In the event of cancellation of the policy, a pro rata return is always allowed d. In the event of a loss, the amount of the policy is reduced by the amount of the loss
49. The fire insurance policy contains Statutory Conditions, which are conditions set in law and cannot be changed. Which of the following is not a Statutory Condition?
a. Inception date*** b. Fraud c. Change of interest d. Termination of insurance
38. The inflation protection endorsement under the Dwelling Fire policy
a. Increases Coverage A during the policy period by the portion by which the latest published Building Construction Index was increased since the last premium due date b. Increases Coverage C during the policy period by the portion by which the latest published Building Construction Index was increased since the last premium due date c. Increases Coverage A & C during the policy period by the portion by which the latest published Building Construction Index was increased since the last premium due date d. Increases Coverage A during the policy period by the portion by which the latest published Building Construction Index was increased since the last premium due date and charges the insured an additional premium***
96. Under a personal liability policy, in which of the following circumstances would an insured have the protection from an insurer?
a. Insured's 10 year old son deliberately threw a rock at the neighbor's window breaking it*** b. Insured's spouse accidentally put the car in gear and damaged the insured's garage c. Insured borrowed neighbor's lawn mower and accidentally damaged motor when he hit a rock in his rock garden d. Insured deliberately injures neighbor in an altercation over excessive noise
10. A contract is defined as an agreement between two or more persons which is enforceable by law. There are five essentials of all contracts that must be met before the contract can be enforceable by law. They are, Offer & Acceptance, Consideration, Legal, Capable, Genuine Intent. There are also three elements unique to an insurance contract. Which of the following would best convey those elements?
a. Interest, Utmost good faith, Intention b. Consideration, Integrity, Indemnity c. Lawful Object, Integrity, Indemnity d. Insurable Interest, Integrity, Indemnity***
93. The occupant of property has a duty to use care when third parties may come onto his property, however each person coming onto the property may require a different degree of care. Which of the following is owed the greatest care?
a. Invitees b. Trespassers c. Licensees d. Children who trespass on his property***
67. Section C of the automobile policy contains provision for a deductible under each of the various subsections available, and this deductible is applicable to most losses with some exceptions. Below are listed some of the exceptions. Mark the peril under which a deductible would apply:
a. Lightning b. Windstorm*** c. Fire d. Theft of entire automobile
69. Under Section subsection 1 of a SPF #1, Owner's Policy, the following limits are applicable with an exception. Mark the exception
a. Medical expenses up to $50,000 b. Funeral expenses up to $5,000 c. Medical expenses incurred within two years d. Chiropractic services $1,000 maximum regardless of number of persons***
63. Under Section B subsection 1 of a S.P.F.#1 Owners Policy the following limits are applicable with an exception. Mark the exception:
a. Medical expenses up to $50,000 per claim b. Funeral expenses up to $5,000 per person*** c. Medical expenses incurred within two years d. Chiropractic services $750.00 per person
58. A personal articles floater is not applicable to which of the following type of property?
a. Movie camera & equipment b. Firearms c. Silverware d. Golf cart***
92. All of the following "elements", with the exception of one, must be present if legal liability of the insured is to be proven. Pick the exception:
a. Negligent action as proximate cause of the loss b. Insured owed a duty c. Damages unforeseeable*** d. Duty breached as a result of negligence
53. The Homeowners policy under Statutory Condition #1 states that the parties, in event of a disagreement over the amount of the loss may
a. Obtain a valuation from an independent representative of the insurer b. Obtain a valuation from an independent representative of the insured c. Obtain a valuation from an independent expert d. Request Appraisal***
42. The Standard Homeowners policy contains several sections relating to the property. Under section Building coverage which of the following are covered?
a. Outdoor swimming pool b. Attached garage c. Plate glass d. All of the above***
90. Under a personal liability policy, in which of the following circumstances would an insured have the protection from an insurer?
a. Personal acts of the Insured, ownership of certain watercraft, and ownership of automobiles b. Personal acts of the Insured, ownership of certain watercraft, and carelessness of the insured's children*** c. Personal acts of the Insured, carelessness of the insured's children, and ownership of automobiles d. Personal acts of the Insured, neglect by the insured to maintain his property in a safe manner, and the poor maintenance of the insured's business premises
8. An insured suffers a loss on his property insured in the amount of $25,000. Damage to the property amounts to $10,000 based on replacement cost of the property. The insured's actual value of the property on the date of purchase four years ago was $6,000. Depreciation has been agreed at 25%. Coverage carried under the policy is actual cash value. The deductible is $500. The principle of indemnity is the basis of any insurance contract, and therefore the insurer will
a. Place the Insured in the same position prior to the loss and pay $6,000 b. Place the Insured in the same position prior to the loss and pay $10,000 c. Place the Insured in the same position prior to the loss and pay $7,000*** d. Place the Insured in the same position prior to the loss and pay $5,500
27. The Facility Association was specifically set up to handle automobile residual business. While it conforms to all the requirements of the Insurance and Highway Traffic Acts of the Province of Alberta , it adheres more tightly to the rules of conduct than many domestic insurers, and in fact has some special rules of its own. One has to do with return of policies for flat cancellation. Which is correct?
a. Policy must be returned immediately*** b. Policy must be returned within 30 days c. Policy must be returned within 15 days d. Policy must be returned within 10 days
65. In the automobile policy Section B, subsection 3 - Uninsured motorist cover, an accident with an unidentifiable vehicle must be reported to the police within:
a. Promptly b. 12 hours c. 24 hours* d. 48 hours
39. "All Risk" is a name given to an insurance policy that
a. Provides insurance protection against all types of perils b. Provides special limits of liability to specified articles c. Provides cover against all losses except those specifically excluded*** d. Provides insurance protection against all hazards
14. The subrogation clause of the Insurance Act
a. Provides that other policies covering the same loss must contribute pro rata to the loss b. Allows the Insurer to take the salvage when a claim is paid in full c. Allows the Insured the option of recovery from the Insurer or responsible party d. Is the right of the Insurer to recover loss payments from party legally responsible for loss ***
71. The Statutory Conditions of Insurance policies relating to termination allow that the cancellation of the policy by the insurer giving notice to the insured in the following manner:
a. Registered mail giving 10 days notice b. Hand delivered giving 5 days notice*** c. Hand delivered giving one day notice d. All of the above
55. In many forms of insurance a deductible applies to each and every loss under the policy. This deductible is the
a. Responsibility of the third party b. Responsibility of the insured only if he is at fault c. Responsibility of the insurer d. Responsibility of the insured
81. The SPF #4 Garage Policy is a policy designed to provide protection as follows:
a. Same form as the SPF #1 Owners Policy b. Garage, Dealer, or Body Shop type of automobile business c. May provide legal liability for collision to customer's vehicles d. All of the above***
75. The Alberta Highway Traffic Act requires that the owner of an automobile is required to carry the following coverage
a. Section A Third Party Liability only b. Section A Third Party Liability and Section B Accident Benefits only*** c. Section B Accident Benefits and Section C All Perils d. Section C Physical Damage
40. An Estoppel is created when
a. Someone fails to act in a reasonable and prudent manner b. Someone by his action or lack of action indicated he will not exercise a right he has c. Someone fails to renew his insurance contract d. Someone who fails to pay for his insurance contract
26. An insurer determines that there is a maximum it wishes to pay on one loss and wants to reinsure any amount that exceeds this maximum. The re-insurer will then be called upon the pay any amount that exceeds this maximum. This type of reinsurance is called
a. Surplus b. Quota share c. Excess of loss*** d. Catastrophic insurance
7. A licensed insurance broker has a contract that allows him to bind certain risks with his insurer. To ensure that the insured and the insurer are aware that insurance has been placed the broker will
a. Tell the client that coverage has been placed b. Write a memo to the insurance company c. Issue a cover note as confirmation of coverage prior to issuance of policy*** d. Tell the client that the policy will be mailed to him when issued by the company
11. The Broker's binding authority is
a. The authority granted by his contract with his insurer to put insurance into force*** b. The authority granted by the Insurance Act c. The authority to automatically renew an existing policy d. The authority granted by his license
47. The homeowners policy has a Basis of Claim Payment Clause regarding damage of destroyed building and detached private structures and personal property and payment of monies. This clause states that the insurer will pay
a. The cost of the repair or replacement without deduction for depreciation b. The actual cash value of the damaged property on the date of occurrence c. Up to the insured's financial interest in the property, but not exceeding applicable limit of insurance*** d. Their ratable proportion of the loss or damage
52. The tenants package policy is exactly the same as the Homeowners Basic policy except in respect to the following
a. The coverage with respect to water damage b. The coverage with respect to building*** c. The limitation with respect to money, furs, jewelry, etc. d. The coverage with respect to windstorm
30. An insurance contract indemnifies the insured against loss arising out of the happening of a specific event. Which of the following is correct?
a. The event must happen with the cooperation of the insured b. The event may happen with the intent of the insured c. The event must be a future event even if it is intentional d. The event must be a future event and it must be accidental***
48. The Insured owns a building and has it insured against loss by fire. The property is mortgaged with First Trust Company Ltd. Named under the policy as a mortgagee. The property is destroyed by fire and the Insured dies before filing proof of loss. The Insured has no relatives and has not left a will. Who can file proof of loss?
a. The insured's broker b. The superintendent of insurance c. The previous owner d. First Trust Company Ltd.***
95. Under a personal liability policy in which of the following is considered an insured and automatically insured?
a. The insured's parents who own & occupy the residence next door b. The 24 year old son and 22 year old daughter living in the same residence as the insured*** c. The insured's 22 year old foster child not named in the contract d. The insured's 20 year old son, married and living in a dwelling owned by his parents
2. To enable someone to be compensated by an insurance contract for property damaged by a peril, that person must have an insurable interest in the property damaged. Which of the following would NOT have an insurable interest?
a. The mortgagee b. The lien holder c. The individual named as beneficiary of the estate*** d. The shareholder
41. The unqualified word "Insured" in a policy for fire insurance is as follows
a. The name insured and if residing in the household, his spouse, and relatives of either under the age of 21 b. The name insured and if residing in the household, his relatives and any person under the age of 21 in the care of the Insured c. The named insured and if residing in the household, his spouse, relatives of either, and any person under the age of 21 in the care of the Insured*** d. The named insured, his spouse, relatives of either, and any person under the age of 21 in the care of the Insured.
86. Under the standard Owners form SPF #1, Section A & C, the definition of an insured is accurately described as follows:
a. The named insured and any driver of the insured vehicle b. The named insured and any occupant of the insured vehicle c. The named insured and any person of the insured's family who is a driver of the insured vehicle d. The named insured and any other person, with the insured's consent, who drives or operates the automobile.***
64. The benefits payable under Section B subsection 2 will be paid, in the event that the head of household and spouse are killed, are paid to:
a. The oldest surviving dependent relative b. The oldest surviving dependent relative to be divided as he wishes among the remaining survivors c. Be divided equally among all the surviving dependent relatives*** d. The executor and divided according to the last will and testament of the father and mother of the remaining survivors
79. The SPF #2 Drivers policy is intended to provide cover for the following incidents
a. The owner of a business who provides vehicles for the use of his salesmen b. The passenger in the vehicle driven by another who doesn't own the vehicle c. The pedestrian who is hit and injured by a driver who doesn't own the vehicle d. The driver who doesn't own his own vehicle but drives vehicles which are not owned by him and not licensed in his name***
84. The Highway Traffic Act as it applies to pedestrians struck by a motor vehicle states:
a. The pedestrian will be considered at fault if not in a cross walk b. The driver of the automobile is automatically at fault*** c. The pedestrian must prove that he was not at fault d. The driver must prove that he was not at fault
70. Under Section B, subsection 2 of a SPF #1 Owner's Policy, the head of the household is deemed to be:
a. The person earning the highest salary at the time of the accident b. The oldest person residing in the household c. The oldest male member residing in the household d. The person earning the larges income in the year preceding the accident***
6. A licensed insurance broker had a fire policy issued on the home of an insured and collected half the annual premium, the balance of the premium to be paid within thirty (30) days. The insured's home was totally destroyed 90 days after the inception date. Which of the following are true?
a. The policy was void and the insured was returned the premium he had paid b. The insured received compensation proportionate to the premium paid c. The insured was paid in full*** d. The policy was terminated for non-payment and the loss was not paid
88. A policy of insurance is deemed to be in force if after the inception date shown on the application;
a. The premium has been paid to the broker or the company b. A binder/cover note has been given to the insured c. The insured is given a temporary Motor Vehicle Liability card under an automobile application d. All of the above***
44. The insured has a Standard Homeowners policy with replacement cost coverage under Section C Personal belongings. With this coverage, claims are paid in the following manner
a. The price paid for the damaged article with no depreciation deducted b. The price of the article today with depreciation for age c. The price of the article today with no depreciation deducted*** d. The price paid for the article, less depreciation
98. Under a personal liability policy, if there is other insurance in force at the time of the loss or accident, the insurer would be liable for:
a. The primary amount of the loss*** b. The entire amount of the loss c. The pro rata share of the loss d. None of the above
15. "Caveat Emptor" refers to
a. The principle of "spread the risk" b. The doctrine of "Buyer's Beware"*** c. A legal doctrine employed in many insurance settlements d. The law of Tort
34. A hazard is
a. The same as a moral hazard b. A type of peril c. A feature of a risk that may give rise to a loss*** d. A chance the insurer takes in providing insurance
97. Under a personal liability policy in which of the following descriptions accurately describes a "Third Party"?
a. The third person injured in an accident b. A party not related to the insured c. A party who is eligible for compensation under Worker's Compensation d. A party who is outside the insurance contract who is injured by the insured***
51. The Homeowners basic policy provides coverage for the peril of glass breakage. Which of the following is true?
a. There is no coverage provided when the dwelling is under construction or vacant*** b. There is no coverage provided if the owner of the dwelling causes the glass breakage c. Coverage is automatically included in all situation d. There is coverage when the dwelling is vacant under thirty days
33. The major function of insurance is
a. To provide protection for mortgage investments*** b. To spread the losses of the few among the many c. To reduce the cost of insurance losses d. To serve as a basis of an existing credit system
91. Under a personal liability policy, if the insured rents a hotel room and as a result of careless smoking, a fire ensues damaging the insured's room, would the insured have protection under his liability policy? If so, then under what form?
a. Under the Care Custody and Control Extension b. Under the Voluntary Damage to Property Section G c. Under the extension under the Homeowner policy regarding property temporarily removed d. Under the tenant's legal liability section***
61. The Statutory Conditions of a Fire policy allows coverage to continue automatically without the insurer's consent in all of the following instances except one of the following. Pick the exception
a. Upon the death of the Insured b. Upon the bankruptcy of the Insured c. Upon the transfer of ownership by the Insured*** d. Upon the Insured becoming mentally incompetent
59. A personal articles floater covers under the following circumstance
a. While located in Canada b. While located in Canada and Continental United States of America c. While located Worldwide*** d. While located in Canada, United States, and Europe
37. In the event of a loss giving rise to a claim under a habitational form of insurance, the insured must submit a proof of loss to the insurer or his adjuster.
a. Within 30 days b. Within 60 days c. Immediately d. As soon as practicable***
73. The automobile insurance policy SPF #1 Additional Agreement, under the Section C Loss or damage to insured automobile, waives subrogation against every person, who with the insured's consent has the care, custody, and control of the automobile except:
a. Without restriction b. Except for someone who sells or repairs cars*** c. The person is a member of the insured's family residing in the same household d. The person is a friend of a family member