Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide
ALBERTA GENERAL INSURANCE LEVEL 1 EXAM, PRACTICE EXAM AND
STUDY GUIDE NEWEST 2025 COMPLETE QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)|ALREADY GRADED A+
Actual cash value (ACV) is understood as the cost of replacing property, less any depreciation to
it. Most insurers expand their definition to recognize that a fair estimate of depreciation at the
time of loss depends on which of the following factors?
a) The property's physical condition
b) The property's resale value
c) The property's obsolescence
d) All of the above - ANSWER-d) All of the above
A "mortgagee" is defined as a person or organization that lends money to someone to buy
property. The mortgagee under a mortgage clause on a property insurance policy has certain
rights and obligations. Which of the following is a right of the mortgagee?
a) The right to share in the loss payment, as long as the insured owes something on the
mortgage
b) The right to share in the loss payment, unless the mortgagor neglects the property
c) The right to share in the loss payment, unless occupation of the premises is for purposes
more hazardous than those permitted by the policy
d) all of the above - ANSWER-a) The right to share in the loss payment, as long as the insured
owes something on the mortgage
In anticipation of building an addition to his home, which you insure under a homeowner
package policy for $320,000, your client purchases and stores on his property $4,000 worth of
lumber. A serious windstorm strikes the area and your insured's lumber pile is destroyed. What
coverage would be available under your policy?
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, Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide
a) None. The lumber is not yet part of the building
b) The lumber would be fully covered under Coverage A - Dwelling Building
c) The loss would be paid under the 10% extension of Coverage C - Personal Property for
property outside the building
d) None. The policy excludes damage to property in the open caused by windstorm - ANSWER-
b) The lumber would be fully covered under Coverage A - Dwelling Building
Motorized vehicles are excluded under Coverage C - Personal Property of a homeowner policy.
Coverage is provided as an exception to the exclusion for which of the following?
a) Mobility Scooter
b) Lawn mower
c) Child's motorized toy car up to a maximum speed of 10 km/hr
d) All of the above - ANSWER-d) All of the above
Stamp and coin collections are best insured by a/an
a) Personal articles floater
b) Fine arts floater
c) Homeowner package policy (Comprehensive Form)
d) Homeowner package policy (Basic Form) - ANSWER-a) Personal articles floater
Under the Definitions section of a homeowners form, "data problem" is defined as
a) ability to receive data
b) ability to transmit data
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, Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide
c) erasure, destruction, or misinterpretation of data
d) all of the above - ANSWER-c) erasure, destruction, or misinterpretation of data
Under a Homeowners Basic Form, the named peril "water damage" excludes loss or damage
caused by freezing in an unheated portion of the building during the normal heating season if
the insured is away for more than
a) 24 hours
b) one week
c) three consecutive days
d) four consecutive days - ANSWER-d) four consecutive days
Which of the following losses would be covered under the refrigerator or freezer food extension
of coverage?
a) Food spoilage in the refrigerator because the insured's child pulls the power cord out of the
electrical outlet and it goes unobserved for a period of time
b) Expenses incurred to store freezer food in a cold storage unit while the freezer is being
repaired
c) Food spoilage when a circuit breaker trips, disrupting the supply of power
d) Damage to the freezer due to food spoilage up to the full limit of insurance for Coverage C -
ANSWER-b) Expenses incurred to store freezer food in a cold storage unit while the freezer is
being repaired
Your clients have been renting a unit in a condominium high-rise building and have carried a
tenants package policy with your office. They have just purchased a condominium unit similar to
the one they have been renting and will soon move in. What advice do you provide to meet
their needs?
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, Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide
a) Transfer their existing policy (as is) to their new address. The buildings are similar, and they
do not plan to buy any additional contents right away.
b) Cancel their entire policy. they no longer have any need for insurance as the condominium
corporation is required by law to insure all exposures for the owners of every unit
c) Get full details of the security arrangements and alarm systems in the building. You will then
be able to recommend how much fire and theft insurance they should carry.
d) Cancel their tenants policy and apply for a special package policy designed for condominium
unit owners - ANSWER-d) Cancel their tenants policy and apply for a special package policy
designed for condominium unit owners
Which of the following is correct
a) The condominium unit owner package purchased by a unit owner must provide sufficient
insurance limits to cover the common elements of the building in addition to his/her contents
and any improvements
b) A condominium corporation never owns the land on which the building stands
c) A condominium unit owner owns the space inside his/her unit, the contents, and any
improvements bought or installed by him/her
d) The condominium unit owners package policy does not provide personal property insurance -
ANSWER-c) A condominium unit owner owns the space inside his/her unit, the contents, and
any improvements bought or installed by him/her
Your client, Bill West, has purchased a farm. You advise Bill that he requires a farm insurance
policy which will cover his dwelling and contents as well as the rest of his farm. You recommend
an endorsement be added to cover his farm machinery and equipment. The typical coverage
this endorsement will provide is
a) coverage for scheduled equipment only
b) all-risk coverage
c) subject to 100% coinsurance
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ALBERTA GENERAL INSURANCE LEVEL 1 EXAM, PRACTICE EXAM AND
STUDY GUIDE NEWEST 2025 COMPLETE QUESTIONS AND CORRECT
DETAILED ANSWERS (VERIFIED ANSWERS)|ALREADY GRADED A+
Actual cash value (ACV) is understood as the cost of replacing property, less any depreciation to
it. Most insurers expand their definition to recognize that a fair estimate of depreciation at the
time of loss depends on which of the following factors?
a) The property's physical condition
b) The property's resale value
c) The property's obsolescence
d) All of the above - ANSWER-d) All of the above
A "mortgagee" is defined as a person or organization that lends money to someone to buy
property. The mortgagee under a mortgage clause on a property insurance policy has certain
rights and obligations. Which of the following is a right of the mortgagee?
a) The right to share in the loss payment, as long as the insured owes something on the
mortgage
b) The right to share in the loss payment, unless the mortgagor neglects the property
c) The right to share in the loss payment, unless occupation of the premises is for purposes
more hazardous than those permitted by the policy
d) all of the above - ANSWER-a) The right to share in the loss payment, as long as the insured
owes something on the mortgage
In anticipation of building an addition to his home, which you insure under a homeowner
package policy for $320,000, your client purchases and stores on his property $4,000 worth of
lumber. A serious windstorm strikes the area and your insured's lumber pile is destroyed. What
coverage would be available under your policy?
1|Page
, Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide
a) None. The lumber is not yet part of the building
b) The lumber would be fully covered under Coverage A - Dwelling Building
c) The loss would be paid under the 10% extension of Coverage C - Personal Property for
property outside the building
d) None. The policy excludes damage to property in the open caused by windstorm - ANSWER-
b) The lumber would be fully covered under Coverage A - Dwelling Building
Motorized vehicles are excluded under Coverage C - Personal Property of a homeowner policy.
Coverage is provided as an exception to the exclusion for which of the following?
a) Mobility Scooter
b) Lawn mower
c) Child's motorized toy car up to a maximum speed of 10 km/hr
d) All of the above - ANSWER-d) All of the above
Stamp and coin collections are best insured by a/an
a) Personal articles floater
b) Fine arts floater
c) Homeowner package policy (Comprehensive Form)
d) Homeowner package policy (Basic Form) - ANSWER-a) Personal articles floater
Under the Definitions section of a homeowners form, "data problem" is defined as
a) ability to receive data
b) ability to transmit data
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, Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide
c) erasure, destruction, or misinterpretation of data
d) all of the above - ANSWER-c) erasure, destruction, or misinterpretation of data
Under a Homeowners Basic Form, the named peril "water damage" excludes loss or damage
caused by freezing in an unheated portion of the building during the normal heating season if
the insured is away for more than
a) 24 hours
b) one week
c) three consecutive days
d) four consecutive days - ANSWER-d) four consecutive days
Which of the following losses would be covered under the refrigerator or freezer food extension
of coverage?
a) Food spoilage in the refrigerator because the insured's child pulls the power cord out of the
electrical outlet and it goes unobserved for a period of time
b) Expenses incurred to store freezer food in a cold storage unit while the freezer is being
repaired
c) Food spoilage when a circuit breaker trips, disrupting the supply of power
d) Damage to the freezer due to food spoilage up to the full limit of insurance for Coverage C -
ANSWER-b) Expenses incurred to store freezer food in a cold storage unit while the freezer is
being repaired
Your clients have been renting a unit in a condominium high-rise building and have carried a
tenants package policy with your office. They have just purchased a condominium unit similar to
the one they have been renting and will soon move in. What advice do you provide to meet
their needs?
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, Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide
a) Transfer their existing policy (as is) to their new address. The buildings are similar, and they
do not plan to buy any additional contents right away.
b) Cancel their entire policy. they no longer have any need for insurance as the condominium
corporation is required by law to insure all exposures for the owners of every unit
c) Get full details of the security arrangements and alarm systems in the building. You will then
be able to recommend how much fire and theft insurance they should carry.
d) Cancel their tenants policy and apply for a special package policy designed for condominium
unit owners - ANSWER-d) Cancel their tenants policy and apply for a special package policy
designed for condominium unit owners
Which of the following is correct
a) The condominium unit owner package purchased by a unit owner must provide sufficient
insurance limits to cover the common elements of the building in addition to his/her contents
and any improvements
b) A condominium corporation never owns the land on which the building stands
c) A condominium unit owner owns the space inside his/her unit, the contents, and any
improvements bought or installed by him/her
d) The condominium unit owners package policy does not provide personal property insurance -
ANSWER-c) A condominium unit owner owns the space inside his/her unit, the contents, and
any improvements bought or installed by him/her
Your client, Bill West, has purchased a farm. You advise Bill that he requires a farm insurance
policy which will cover his dwelling and contents as well as the rest of his farm. You recommend
an endorsement be added to cover his farm machinery and equipment. The typical coverage
this endorsement will provide is
a) coverage for scheduled equipment only
b) all-risk coverage
c) subject to 100% coinsurance
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