General Insurance Essentials: Part 1 (C81) and Part 2 (C82) Practice Test

These questions are part of the practice quiz. Start practicing

• What is the intentional damage exclusion for the voluntary property damage section of a homeowners liability policy?
• Which of these is NOT a consideration for coverage under the statutory conditions?
• After an insured automobile has been damaged in an accident, whose responsibility is it to protect the automobile from further damage?
• Which type of property is usually not subject to special limits of liability?
• What form of misrepresentation involves fully disclosing all necessary information?
• In what way can an insurance policy serve as an aid to credit?
• Why is it important to fulfill obligations under a replacement cost endorsement?
• What concept upholds the principle of indemnity in insurance?
• How must an insurer be notified about the termination of a fire policy?
• What aspect does the Highway Traffic Act primarily address?
• What is the role of a claims manager in the insurance process?
• How does a rebuilding clause-deferred payment affect a claim settlement?
• What is an endorsement in insurance?
• Would an automobile policy provide coverage for transporting an automobile from Vancouver, British Columbia, to San Francisco, California, by ship?
• In the context of insurance documents, what is commonly measured by the term "object of contract"?
• When can a homeowner expect coverage for additional living expenses?
• What is the term for the immediate and effective action in a chain of circumstances leading to a loss?
• Which two entities are responsible for distributing automobile insurance in Canada?
• What does the comprehensive home insurance form cover?
• What does "Insurable Interest" refer to?
• Under a fire policy, which of the following properties would typically not be excluded?
• Liability policies primarily address which type of legal concerns?
• What is a characteristic of private automobile insurance in Canada?
• What may happen if an insured has less than 80% of the property's value insured?
• What is solvency in the context of an insurance business?
• What is the term for all costs associated with managing pure risk?
• Which kind of injury does employer's liability NOT cover?
• Under a homeowners policy, which peril is generally excluded from coverage?
• What does salvage refer to in insurance?
• Where can higher-than-normal underwriting risk individuals obtain automobile insurance?
• Who is liable to incur costs if a vehicle is damaged or destroyed in an accident?
• Under a Fire insurance policy, how long does the Insurer have to make payment for loss after proof of loss is submitted?
• What does the risk management technique of 'avoidance' entail?
• What is contingent commission in the context of insurance?
• In an organization, who usually needs to approve a decision to change insurers or brokers?
• True or False? Automobile Physical Damage coverage includes protection from hail or lightning.
• What is typically excluded from an automobile insurance policy concerning vehicle usage?
• Which aspect of a boiler and machinery policy is true?
• What distinguishes burglary coverage from theft coverage?
• In addition to the five essential elements of a contract, what three elements must an insurance contract also contain to be enforceable?
• What is often a requirement in fire insurance policies concerning the responsibilities of the insured?
• What is a key factor in assessing the value of business interruption insurance?
• What does a newly acquired automobile need to qualify under the Owner's Policy?
• To restore income after a business interruption, which element is essential for coverage?
• Accident benefits coverage is compulsory in most Canadian provinces and is available to whom?
• How many days must an insured be away from the premises for coverage against freezing to be excluded?
• What term describes the failure to speak when there is an obligation to do so?
• What does it mean to indemnify a policyholder?
• How does insurance serve as an aid to security?
• What is the primary task of the underwriting department in an insurance company?
• Which of the following describes one element of a tort?
• What type of liability is exemplified by a pet lion escaping and mauling a neighbor?
• What does underwriting profit refer to?
• What principle explains the sharing of risk among a large group by insurance?
• Under the business interruption form, when does the period of indemnity end?
• Which legal principle relates to agents being employed to secure contracts on behalf of others?
• What is the record of losses incurred by a risk used for?
• Who is known as the mortgagee in an insurance context?
• When is an independent contractor truly considered "independent"?
• Which item would require a separate policy or endorsement in addition to a homeowners policy?
• Which instance is an exception where an insured is typically not liable for damages caused?
• What does the term "deductible" mean in the context of insurance claims?
• Which type of liability exposure is considered rare?
• Can a loss occur even if it is not an insurable claim?
• Agents and brokers gain their authority from
• If a property is insured for less than its actual value, what effect does this have?
• What does the term "cause of contract" refer to in the context of the Civil Code?
• What does a liability policy cover during the usual business activities?
• Which of the following is NOT included in supplementary payments under a liability policy?
• What is one of the main regulatory focuses of the Insurance Act concerning insurance intermediaries?
• What is the significance of social responsibility in risk management?
• What does an occurrence basis policy provide coverage for?
• What does the Federal Department of Insurance regulate concerning federally licensed insurance companies?
• What constitutes strict liability?
• Would personal liability insurance respond if the insured injured another person while golfing on a course in the United States?
• Which type of insurance would cover a business for accidental breakage of glass?
• What method allows a broker to identify and analyze risks faced by an organization?
• Which term describes information that could significantly alter the insurance contract if disclosed?
• What condition ensures that no one other than the policyholder who has custody of the insured property will benefit from the policy?
• What is an important goal of the Facility Association in the insurance market?
• Which of the following statements about the SEF#44 - family protection endorsement is false?
• How does the insurance provided by crown corporations operate?
• What is covered by liability insurance in relation to negligent actions?
• Which of the following losses is excluded under the IBC Homeowners Comprehensive Form?
• What is the purpose of the anti-concurrent causation clause?
• What condition is covered under glass coverage insurance?
• In which situation is the insured liable for the acts of an independent contractor?
• In the context of automobile insurance, what role does the term "endorsement" usually refer to?
• What do condominium unit purchasers own?
• What does an insurance contract indemnify the insured against?
• What percentage of gross weekly salary can an insured qualify for under loss of income coverage?
• Which water loss situation is covered by a homeowner's policy?
• In terms of insurance premiums, what typically increases the rate of the policy?
• Who is responsible for making a final decision on complex claims?
• What is the primary duty of a risk manager?
• Under a commercial property insurance policy, what is "Packing and Wrapping" classified as?
• What can result from a lack of risk management in insurance practices?
• What determines the pure premium required by an insurer?
• How can risk be effectively spread across an organization?
• What is the aim of loss of income payments under Accident Benefits in an automobile policy?
• What is a typical cause of a sewer backup?
• What is the term used when an insurance company re-insures its liability with another insurance company?
• Which of the following is a permitted use of the automobile under the SPF#1?
• In an insurance policy, what does a warranty represent?
• Which province uses SPF as a prefix for automobile policy wordings?
• What does the extension of coverage for removal in a fire policy signify?
• What is typically an insurer's objective when determining acquisition costs?
• Which item is generally subject to Special Limits of Insurance under most Habitational Insurance Policies?
• If an automobile is declared a total loss, which value is typically considered for settlement?
• What information is necessary under the Particulars of the Described Automobile section of the application?
• What is the main purpose of the SEF#44 endorsement?
• Which of the following best describes a peril?
• What does the superintendent of insurance oversee?
• Which of the following is NOT true regarding "loss of use" coverage under the SPF#1 policy?
• Which term describes the possibility of loss due to poor health or premature death?
• What does the term 'underwriting' refer to in insurance?
• In crime policies, which term is defined with the broadest meaning?
• What does the Additional Living Expenses coverage under Habitational Insurance Policies cover?
• In which type of insurance is coinsurance typically applied?
• In the event of theft, what is one of the primary responsibilities of the insured?
• Which of the following losses would not be covered under a named perils form?
• Which rates are used to calculate the premium for an automobile policy issued by the Facility Association?
• Can an independent contractor use tools and materials provided by the property owner?
• What type of risk involves loss that does not involve the possibility of gain?
• Which of the following is NOT considered an "insured" under most Habitational insurance policies?
• In which situation will a driver not be paid for loss of income under accident benefits?
• Which type of incident initiates loss of use coverage under the SPF#1 policy?
• Which of the following items is NOT considered "dwelling" under the Homeowners policy?
• What is a requirement for undertaking automobile insurance according to statutory conditions?
• Insurance intermediaries primarily serve which function in the insurance market?
• Where does a significant portion of many brokers' new business originate?
• Which coverage option must not exceed a specified percentage amount when extended to private structures?
• Under Habitational Insurance Policies, when is loss caused by "freezing" typically covered?
• Which provinces and territories have access to the facility association?
• What is the definition of a premium in insurance?
• Which of the following does the insurer NOT cover under section C agreements?
• Which of the following is excluded under additional agreements of the insurer in section C?
• What must an insured do if they are away for more than four consecutive days during the heating season to cover freezing losses?
• Which of the following statements is true regarding accident benefits coverage?
• What is a common objective of risk management before and after a loss occurs?
• Which document must be provided by the insurer upon policy cancellation?
• What are the essential elements required to form a binding contract according to the Civil Code of Québec?
• If a loss occurs before a policy is issued but coverage is bound through a broker, what happens?
• How long is the automatic coverage period for a new vehicle purchased to replace an insured vehicle?
• What is the major function of insurance?
• Which detail is NOT required on an application for "personal use" automobile insurance?
• Which statement regarding condominium unit ownership is correct?
• What is the primary purpose of Business Interruption Insurance?
• Which of the following is a reason for an insurer to deny coverage for personal property theft?
• Which provinces do not utilize the Facility Association?
• Which province is known to operate outside the Facility Association?
• Which of the following best describes the role of an actuary in an insurance company?
• What is the minimum legislated limit of third party liability coverage required for motorists in the common law provinces?
• Who is responsible for licensing insurance brokers and supervising insurance contracts?
• What does the family protection endorsement provide coverage for?
• If an automobile has an actual cash value (ACV) of $500 and attached equipment valued at $1,200, what would the insurer pay if the automobile was declared a total loss?
• Which statement is true about the Standard Mortgage Clause?
• What is the maximum time frame to file a compensation claim in Quebec after an accident?
• What is the role of the Office of the Superintendent of Financial Institutions?
• What does the reinstatement clause in a fire policy ensure for the insured?
• The law of large numbers is significant in insurance for what reason?
• What do acquisition costs refer to in the context of insurance?
• What specific risk does life insurance cover?
• What does actual cash value (ACV) take into account during its calculation?
• Which of the following is a covered peril under a named perils form?
• Which type of coverage provides legal defense for claims against a condominium corporation?
• What is the primary moral and ethical duty of a broker towards their client?
• When an insured cancels a policy early, what type of refund is typically granted?
• Which of the following elements is NOT part of a contract under common law?
• What distinguishes facultative reinsurance from treaty reinsurance?
• Which principle allows for insurance agents to bind coverage on behalf of insurers?
• What does the term "named insured" refer to?
• In which scenario would a parent be held responsible for their child's tort?
• Which of the following best describes a category of loss related to illness or disability?
• If an Insured knowingly fails to reveal all material information when applying for insurance, what may the Insurer do?
• Which provinces finance the Highway Victims Indemnity Funds?
• What must an insurer do to repair, rebuild, or replace a damaged auto?
• What condition must be met for an insurer to pay Fair Rental Value and Additional Living Expenses under most Habitational Insurance Policies?
• Which of the following accurately reflects the meaning of "actual cash value" in insurance terms?
• What are the minimum requirements for a fire insurance policy by law?
• What is the primary purpose of the Facility Association?
• What are common exclusions in a Glass Insurance Policy?
• Which of the following elements is required to prove a client's legal liability?
• For how long is property necessarily removed to prevent further loss covered at the new location under the fire policy?
• Which type of policy covers personal belongings against multiple perils?
• What type of loss would typically be covered by an Extra Expense Policy?
• What is the purpose of the Standard Driver's Automobile Policy?
• What is an additional agreement of the insurer under Third Party Liability coverage?
• Damage caused by flooding was traditionally excluded from habitational policies. The exclusion was further defined as flooding caused by which type of water?
• In determining insurance values, how should items like cleaning equipment be categorized?
• What are the necessary elements of all contracts?
• What happens to coverage if the insured automobile is leased or rented out without the insurer's consent?
• What are the three amounts an indemnity agreement of a fire policy states will be paid in the event of a claim?
• Which of the following is not covered under the supplementary payments section of a liability policy?
• Which factor contributes to determining the premium of a tenant's insurance policy?
• Which event is typically excluded from a fire policy?
• What type of compensation may a broker receive for profitable business placement?
• Which of the following describes an excluded event in a typical fire insurance policy?
• What is the primary cause of loss that would typically be insured?
• What is classified as operations liability?
• What is the common coverage period for removal of property under a fire insurance policy to prevent loss?
• Which duty is explicitly stated as an obligation for brokers and agents?
• What type of insurance is most appropriate for a cottage used year-round that shares features of a primary residence?
• Which statement accurately describes the obligations of the insured in maintaining coverage for freezing losses?
• What is the purpose of including an extension of coverage for removal in a fire policy?
• What is treaty insurance?
• In which scenario is it necessary for the Insurer to give consent for a Change of Interest?
• What role do thresholds play in automobile insurance?
• Which activity qualifies as part of the requisite continuing education (CE) hours needed for license renewal?
• Which party typically has an insurable interest in a business premises?
• Which of the following is NOT a general type of risk?
• Which loss is not covered by the Comprehensive Homeowners policy?
• Which of the following losses would a named perils form cover?
• Who acts as the link between clients purchasing coverage and insurers providing coverage?
• Brokers and agents must act how in their dealings with clients?
• What is the primary purpose of Accident Benefits in automobile insurance policies?
• What is the primary purpose of a Co-Insurance clause?
• What is the fundamental objective of underwriters when accepting risks for an insurer?
• What are the necessary conditions for a successful claim under the unidentified motorist coverage?
• Is vandalism damage covered under the Comprehensive coverage of an automobile policy?
• What does the statutory condition regarding misrepresentation entail?
• Which of the following is NOT a characteristic of mutual insurance companies?
• What must be valid for an insurer to pay a claim?
• In which scenario can insurers omit the statutory conditions?
• Which of the following can be considered a loss?
• What skill is essential for effective telephone conversations?
• Which type of information is typically requested on a tenant's insurance application?
• Which duty is typically associated with a general agent in insurance?
• If a night deposit bag left on a desk goes missing, which form of crime coverage applies?
• What element must be satisfied for a tort claim to be valid?
• What do insurers require when offering a boiler and machinery policy?
• When does employer's liability apply?
• A material change in an insurance policy must be reported to the Insurer promptly. What constitutes a material change?
• What is the defining characteristic of contractual liability in insurance?
• Under what circumstance is a parent liable for their child’s actions?
• Where is personal property insured under the IBC Homeowners forms covered?
• How is "peril" best defined in insurance terms?
• Which term describes the maximum liability the insurer assumes on a policy?
• In the context of comprehensive personal liability, which losses are covered in hotel rooms during out of town competitions?
• What is the most common cause of errors and omissions in insurance?
• What does an Extra Expense Policy provide for a business during a restoration period?
• Why is the appraisal process used in insurance?
• In which situation is an insurance company not responsible due to a change in interest of the property?
• What is the primary purpose of the Facility Association?
• What are materials used for packaging categorized as in terms of insurance?
• What is not a typical feature of business interruption policies?
• Which type of insurance is designed to cover goods in transit on land?
• How is tort liability typically categorized?
• Which statement regarding coverage provided by statutory conditions is true?
• What must an insured do if they wish to repair their damaged auto immediately?
• What should the insured provide after a loss according to statutory conditions?
• What type of insurance salesperson sells policies for multiple insurers?
• Which type of loss is excluded from Safe Burglary insurance?
• What can be a consequence of misrepresenting material facts on an insurance application?
• The occupier of a property owes the greatest duty of care to which group?
• What is a deductible in an insurance policy?
• What must be proven to establish a negligence claim?
• When an Insured chooses to repair, rebuild, or replace damaged property, what must the Insurer provide?
• How would an insurance policy respond if a house valued at $200,000 was damaged by fire, and the town required the undamaged portion to be torn down?
• What is the concept of subrogation in insurance?
• What term describes an individual who is invited onto your property?
• What is defined as a physical hazard in insurance?
• What is the correct name format for the Insured in an insurance contract?
• Operations liability refers to what?
• Under the indemnity agreement, the insurer agrees to pay which of the following amounts?
• Which of the following is necessary for effectively managing risk within a firm?
• What type of market stability does the Facility Association aim to enhance?
• Where in a policy would you find the commencement date, term, and expiry date?
• Which catastrophic event typically falls under the coverage of a fire insurance policy?
• What does retention mean in the insurance industry?
• When coverage is provided by the policy after an insured is convicted of a liquor offence, what does it pertain to?
• What is a hazard in the context of insurance?
• What must be true for coverage to apply under the insuring agreement of a liability insurance policy?
• Which coverage does "absolute liability provisions" primarily apply to?
• Under the homeowners policy, which situation is covered by windstorm?
• What typically happens when an insured violates a condition of an insurance policy?
• Which situation does NOT affect the insured's coverage regarding statutory conditions?
• Which statement is TRUE regarding coverage limits in a property insurance policy?
• What is facultative reinsurance?
• Under what condition can the endorsement not be utilized according to the family protection policy?
• What type of claims are covered by government plans in Quebec?
• What could happen if a tenant's policyholder doesn't rebuild within the specified time frame?
• Which term is used to refer to a business's long-term financial health?
• What coverage does a fire insurance policy usually exclude?
• Who is considered the defendant in a civil matter?
• What does the term "unearned premiums" refer to in insurance?
• Which criteria are used in the first step of rate making to classify risks?
• What does liability insurance indemnify the insured for?
• What is a risk management technique that prevents loss by not engaging in risky activities?
• What does the Reinstatement Clause in commercial property insurance policies provide?
• What is meant by the term inherent vice?
• Which type of vehicle use is prohibited under Statutory Conditions?
• What does it mean to underwrite a risk?
• If a loss occurs before an actual insurance policy is issued, what happens to the coverage that was bound through a broker?
• What is generally required from intermediaries by most provinces and territories?
• What does it mean to "bind a risk" in the insurance context?
• What are the two types of contracts between an insurer and an intermediary?
• What would we include the value of improvements made by a doctor in a rented office under?
• Under the IBC Homeowners Forms, what is the 10% limit for Detached Private Structures considered?
• What type of loss is typically NOT covered by homeowners' insurance policies?
• What is a condition under which the insured may not receive payment for salvage costs?
• What do underwriters require to be successful in deciding to accept or reject risks?
• What approach should be avoided to prevent worsening a situation?
• What is a potential consequence of not using a risk management approach in insurance?
• What type of information must be safeguarded under PIPEDA?
• When does Business Interruption coverage commence and cease?
• What is a simple definition of earnings?
• What is the maximum amount covered for each tree, shrub, or plant under a homeowners form?
• What does "uphold utmost good faith" entail in the context of insurance?
• What do insurers in New Brunswick utilize to determine responsibility for Direct Compensation-Property Damage claims?
• What is the term for property that remains after an insured property is not totally destroyed or lost?
• How does Quebec's public insurance work regarding traffic accidents?
• A fire insurance policy must contain minimum coverages. Which of the following is one of those minimum coverages?
• What element influences the incidence of automobile theft beyond the attractiveness of the vehicle?
• What is the purpose of risk assessment in an insurance context?
• Which mathematical concept is related to the certainty of predicting future losses?
• What happens if a driver requests to take a driving test and passes while being unlicensed?
• If a policy is cancelled before the term has expired, what happens to the commission?
• What loss is referred to as "friendly fire" in an insurance context?
• What is a primary ethical consideration for insurance brokers?
• In which provinces is basic compulsory automobile insurance provided by the government?
• What information can typically be found in the coverage summary of an insurance policy?
• What is the term used when a broker or agent can accept a risk without prior approval from the insurer?
• Which of the following is true regarding insurance coverage for property damage in Quebec?
• Which of the following statements about temporary insurance is true?
• What do minimum limits in automobile insurance refer to?
• What is the purpose of motor vehicle liability cards?
• True or False: "Products liability" is covered under a farmer's liability policy.
• When can a driver be eligible for loss of income benefits?
• Who in a corporation would be responsible for educating management about risk?
• Who is generally NOT considered an insured under the homeowners policy?
• What action can an insurer take when there is a material change in risk?
• What is a binder in insurance?
• What does a broker do in the insurance industry?
• What type of refund is granted when a policy is canceled early at the insurer's request?
• Which statement about loss of income coverage is FALSE?
• Which of the following would be considered additional living expenses under a homeowners policy?
• What are the main duties of insurance intermediaries?
• What is referred to as subscribed capital in a corporation?
• What does "negligence" refer to in legal terms?
• What action should a broker take if the insured requests to suspend all coverages for their automobile while going south for the winter?
• The application for an automobile insurance policy requires information about past driver’s license experience for what period of time?
• What does "Completed Operations Liability" primarily cover?
• What must an insured do when their automobile insurance policy is modified to accommodate additional coverage?
• Which type of risk is insurable?
• How much will the insurer pay for stolen jewelry valued at $30,000 under a Homeowners Comprehensive Form?
• What must an insurer do to legally cancel an insured's policy?
• In reinsurance, what does the term "cession" refer to?
• Under what condition will the insured be unable to apply the Replacement Cost Endorsement?
• What does 'reinsurance' refer to?
• Which of the following defines 'insurable interest' in the insurance context?
• Which of the following is NOT typically included in a homeowners insurance policy?
• What does a personal liability policy cover?
• Which statement is NOT true regarding automobile policy provisions?
• In risk management, what is the purpose of transferring risk?
• What type of coverage does a fire insurance policy provide for accidental damage?
• What three elements determine the base rate on which property insurance is set?
• Which of the following best defines pure premium?
• What must be included in an automobile statutory condition?
• A comprehensive personal liability policy protects against claims for which types of incidents?
• Who is authorized to give notice and proof of loss?
• How are codes of conduct generally understood?
• Which of the following describes the proximate cause of a loss?
• What is the minimum legislated limit of third-party liability coverage required in all provinces?
• What is covered under premises liability coverage?
• What is a requirement of the locked vehicle warranty?
• When managing risk, what role does diversity play?
• How is negligence defined in the context of insurance?
• How is the concept of 'capacity to contract' defined?
• What does sympathy require in interpersonal communication?
• How are mutual insurance companies characterized?
• Which of the following would NOT be covered by a fire insurance policy?
• What is required for settlement under a replacement cost endorsement?
• How would Miriam's tenant insurance respond to her claim after a fire caused by a lightning strike?
• What foundational knowledge does the Canadian Risk Management (CRM) qualification provide?
• In the context of an insurance contract, what does "consideration" mean?
• Which three departments are unique to insurance companies?
• What term is used for companies that set up their own insurance entity offshore to manage risks and optimize tax positions?
• What is the purpose of the Appraisal process in an insurance claim?
• What is a key difference between tenant's policies and homeowners policies?
• Which of the following conditions is not covered by glass insurance?
• What type of insurance would one typically need for a home-based business?
• Under the concept of salvage, the insurer is responsible to:
• Who is primarily responsible for overseeing risk management decisions in an organization?
• What do Statutory Conditions in fire insurance policies outline?
• Which coverage is often overlooked yet crucial for a homeowner protecting their belongings?
• Which aspect of risk management is related to identifying potential losses?
• What type of damage is typically covered under an automobile insurance policy?
• Which of the following items would be excluded from coverage under a named perils form?
• What is the main purpose of stock insurance companies?
• If an architect's drawings are destroyed, which policy would cover the cost of redrafting?