2025 FUNDAMENTALS OF INSURANCE EXAM QUESTIONS WITH
ANSWERS GRADED A+ 2025/2026
This is the most common of errors and omissions claims, accounting for nearly 50% of
all claims
a. Policy change errors
b. Processing delays
c. Cancellation of renewal errors
d. Inadequate coverage - d. Inadequate coverage
A physical hazard is:
a. A type of peril
b. The same as a moral hazard
c. A condition relating to the premises which may cause a peril to occur
d. The possibility of a loss due to the character of the insured - c. A condition relating to
the premises which may cause a peril to occur
There is no one standard policy. Insurance companies provide consumers with a variety
of operation or choices from which they can select the policy which is best for them.
When you sell broad form of comprehensive form, your should advise the client that the
policy insures:
a. All risks it is possible to assume, without exception
b. All risks, except earthquake and radioactive contamination
c. All risk, except theft from the interior of an unlocked car
d. All risks of direct physical loss or damage, subject to the policy conditions and
exclusions - d. All risks of direct physical loss or damage, subject to the policy
conditions and exclusions
Property policies contain two types of exclusions - one for property excluded and one
for perils excluded. All of the following property items are normally excluded by property
policies, except one. Pick the exception:
a. Automobiles
b. Yard and maintenance equipment
c. Money and securities
d. Property which has been vacant for more than 30 consecutive days - b. Yard and
maintenance equipment
Under a policy of insurance, a "deductible" is:
a. payable by the insureds only if they are responsible for the loss
b. Payable by the insured's only when the insurer disputes the amount of its liability for
the loss
,c. The amount the insured is required to absorb for each loss before receiving any
payment from the insurer
d. The responsibility of the broker - c. The amount the insured is required to absorb for
each loss before receiving any payment from the insurer
Every property insurance policy describes the method used to pay claims. Normally, the
insurer will pay the lesser of the three amounts in the event of a claim. One factor which
does not enter into this calculation is:
a. The actual cash value of the property
b. The original cost of the property
c. The insured's interest in the property
d. The policy limit - b. The original cost of the property
Your clients furniture store is insured under a commercial property insurance policy to
which a replacement cost endorsement is attached. To qualify for settlement on a
replacement cost basis. The insured must comply with all of the following obligations,
except one. Pick the exception:
a. Replacement shall be effective by the insured with due diligence and dispatch
b. Replacement shall be on the same site on an adjacent site
c. Replacement shall commence within 45 days of the insurer agreeing to pay the loss
d. Payment of the loss on a replacement cost basis shall be provided only after the
insured has actually repaired or replaced the property - c. Replacement shall
commence within 45 days of the insurer agreeing to pay the loss
The chief advantage of replacement cost coverage is:
a. No deductible for depreciation
b. Only limited depreciation is charged to the insured
c. The insured receives a settlement based on replacement cost, even if the property is
not replaced
d. It removes the effect of the bylaws exclusion - a. No deductible for depreciation
Which of the following statements is true when a standard mortgagee clause is attached
to the policy?
a. The insurer could be called upon to pay a loss of the mortgagee, even though the
insured violated a policy or other condition
b. The insurer can reduce the coverage at any time at the request of the insured, even if
such changes prejudice the position of the mortgagee
c. The insurer may cancel the policy at any time by providing the mortgagee with seven
days notice of cancellation by registered mail
d. Neither the insured nor the insurer may cancel the policy until the mortgage has been
paid off - a. The insurer could be called upon to pay a loss of the mortgagee, even
though the insured violated a policy or other condition
, The personal property of all the following persons would be insured under the
homeowners form, except one. Pick the exception.
a. Grandmother living with the insured
b. Roomers or boarders living with the insured
c. Daughter over 21 years of age living with the insured
d. Common-Law spouse who has lived with the insured for five years - b. Roomers or
boarders living with the insured
The homeowners forms contain a number of "extensions of coverage". All of the
following statements, respecting these coverage extensions are true, except one. Pick
the exception.
a. Coverage is provided for lock replacement when the keys to the insured dwelling
have been lost or stolen
b. Property which is necessarily removed to protect it from loss or damage is insured for
30 days or until the expiry of the policy. Whichever occurs first
c. If the amount payable for loss, including expenses for debris removal, is greater than
the amount of insurance, an additional 5% of that amount will be available to cover
debris removal expenses
d. Coverage is automatically extended for a minimum of 30 days to insure personal
property while in transit to and at another location in Canada which is to be occupied by
the insured's as their principal dwelling - a. Coverage is provided for lock replacement
when the keys to the insured dwelling have been lost or stolen
The homeowners forms contain a number of extensions of coverage. One such
coverage is that for freezer food. All of the following statement respecting this extension
of coverage are true, except one. Pick the exception.
a. Coverage is provided when there is an accidental interruption of electrical power on
or off the insured's premises
b. Coverage is provided for loss of freezer food due to mechanical breakdown of the
food freezer
c. Coverage is provided for loss to freezer food due to the accidental or intential
disconnection of the power supply or the operation of circuit breakers of fuses
d. Coverage is provided for damage to a food freezer when it is due to food spoilage
coverage by this extension - c. Coverage is provided for loss to freezer food due to the
accidental or intential disconnection of the power supply or the operation of circuit
breakers of fuses
Homeowners forms provide limited coverage for outdoor trees, shrubs, and plants.
There is no coverage for loss or damage caused by peril:
a. Lightening
b. Impact by land vehicle
ANSWERS GRADED A+ 2025/2026
This is the most common of errors and omissions claims, accounting for nearly 50% of
all claims
a. Policy change errors
b. Processing delays
c. Cancellation of renewal errors
d. Inadequate coverage - d. Inadequate coverage
A physical hazard is:
a. A type of peril
b. The same as a moral hazard
c. A condition relating to the premises which may cause a peril to occur
d. The possibility of a loss due to the character of the insured - c. A condition relating to
the premises which may cause a peril to occur
There is no one standard policy. Insurance companies provide consumers with a variety
of operation or choices from which they can select the policy which is best for them.
When you sell broad form of comprehensive form, your should advise the client that the
policy insures:
a. All risks it is possible to assume, without exception
b. All risks, except earthquake and radioactive contamination
c. All risk, except theft from the interior of an unlocked car
d. All risks of direct physical loss or damage, subject to the policy conditions and
exclusions - d. All risks of direct physical loss or damage, subject to the policy
conditions and exclusions
Property policies contain two types of exclusions - one for property excluded and one
for perils excluded. All of the following property items are normally excluded by property
policies, except one. Pick the exception:
a. Automobiles
b. Yard and maintenance equipment
c. Money and securities
d. Property which has been vacant for more than 30 consecutive days - b. Yard and
maintenance equipment
Under a policy of insurance, a "deductible" is:
a. payable by the insureds only if they are responsible for the loss
b. Payable by the insured's only when the insurer disputes the amount of its liability for
the loss
,c. The amount the insured is required to absorb for each loss before receiving any
payment from the insurer
d. The responsibility of the broker - c. The amount the insured is required to absorb for
each loss before receiving any payment from the insurer
Every property insurance policy describes the method used to pay claims. Normally, the
insurer will pay the lesser of the three amounts in the event of a claim. One factor which
does not enter into this calculation is:
a. The actual cash value of the property
b. The original cost of the property
c. The insured's interest in the property
d. The policy limit - b. The original cost of the property
Your clients furniture store is insured under a commercial property insurance policy to
which a replacement cost endorsement is attached. To qualify for settlement on a
replacement cost basis. The insured must comply with all of the following obligations,
except one. Pick the exception:
a. Replacement shall be effective by the insured with due diligence and dispatch
b. Replacement shall be on the same site on an adjacent site
c. Replacement shall commence within 45 days of the insurer agreeing to pay the loss
d. Payment of the loss on a replacement cost basis shall be provided only after the
insured has actually repaired or replaced the property - c. Replacement shall
commence within 45 days of the insurer agreeing to pay the loss
The chief advantage of replacement cost coverage is:
a. No deductible for depreciation
b. Only limited depreciation is charged to the insured
c. The insured receives a settlement based on replacement cost, even if the property is
not replaced
d. It removes the effect of the bylaws exclusion - a. No deductible for depreciation
Which of the following statements is true when a standard mortgagee clause is attached
to the policy?
a. The insurer could be called upon to pay a loss of the mortgagee, even though the
insured violated a policy or other condition
b. The insurer can reduce the coverage at any time at the request of the insured, even if
such changes prejudice the position of the mortgagee
c. The insurer may cancel the policy at any time by providing the mortgagee with seven
days notice of cancellation by registered mail
d. Neither the insured nor the insurer may cancel the policy until the mortgage has been
paid off - a. The insurer could be called upon to pay a loss of the mortgagee, even
though the insured violated a policy or other condition
, The personal property of all the following persons would be insured under the
homeowners form, except one. Pick the exception.
a. Grandmother living with the insured
b. Roomers or boarders living with the insured
c. Daughter over 21 years of age living with the insured
d. Common-Law spouse who has lived with the insured for five years - b. Roomers or
boarders living with the insured
The homeowners forms contain a number of "extensions of coverage". All of the
following statements, respecting these coverage extensions are true, except one. Pick
the exception.
a. Coverage is provided for lock replacement when the keys to the insured dwelling
have been lost or stolen
b. Property which is necessarily removed to protect it from loss or damage is insured for
30 days or until the expiry of the policy. Whichever occurs first
c. If the amount payable for loss, including expenses for debris removal, is greater than
the amount of insurance, an additional 5% of that amount will be available to cover
debris removal expenses
d. Coverage is automatically extended for a minimum of 30 days to insure personal
property while in transit to and at another location in Canada which is to be occupied by
the insured's as their principal dwelling - a. Coverage is provided for lock replacement
when the keys to the insured dwelling have been lost or stolen
The homeowners forms contain a number of extensions of coverage. One such
coverage is that for freezer food. All of the following statement respecting this extension
of coverage are true, except one. Pick the exception.
a. Coverage is provided when there is an accidental interruption of electrical power on
or off the insured's premises
b. Coverage is provided for loss of freezer food due to mechanical breakdown of the
food freezer
c. Coverage is provided for loss to freezer food due to the accidental or intential
disconnection of the power supply or the operation of circuit breakers of fuses
d. Coverage is provided for damage to a food freezer when it is due to food spoilage
coverage by this extension - c. Coverage is provided for loss to freezer food due to the
accidental or intential disconnection of the power supply or the operation of circuit
breakers of fuses
Homeowners forms provide limited coverage for outdoor trees, shrubs, and plants.
There is no coverage for loss or damage caused by peril:
a. Lightening
b. Impact by land vehicle
