FUNDAMENTALS OF INSURANCE -
EXAM QUESTIONS WITH COMPLETE
SOLUTIONS
How long can property be vacant before it falls under Property Exclusion?
A) 60 days
D) 15 days
C) 30 days
D) 45 days - ANSWER-C) 30 days
Some examples of property exclusions are Evidences of debt or title, Securities,
Automobiles, Books of Accounts and Vacant property; Select another example of
property exclusions:
A) Money, Aircraft, Watercraft
B) Aircraft, Shrubs, Private Structures
C) Money, Shrubs, Private Structures
D) None of the above - ANSWER-A) Money, Aircraft, Watercraft
What is the Rationale behind a deductible? - ANSWER-A deductible charged to all
losses helps to keep insurance affordable.
If the deductible on the policy is stated to be $500 and there is a loss resulting in
$1500 of damage; the insurer is responsible for how much of the claim:
A) $1500
B) $500
C) $1000
D) $2000 - ANSWER-C) $1000 - the Insured is required to absorb $500 of the cost
as that is the amount of their deductible
How is Actual Cash Value is calculated ? - ANSWER-ACV= Replacement Cost -
Depreciation
The Underwriter has the option to:
A) Reject a risk
,B) Accept the risk on basis presented
C) Accept the risk with increased premium
D) Accept the risk with increased deductible
E) All of the above - ANSWER-E) All of the above
A Mortgagee is anyone having: *(Select best answer)*
A) Money lent to them
B) An Insurable interest in the insured property
C) A Mortgage on a house
D) None of the above - ANSWER-B) An Insurable interest in the insured property
Who is insured? Select the exclusion:
A) Spouse/Common Law Partner
B) Relatives of the named insured
C) Anyone under 21 in the care of the named insured
D) Students attending school (financially dependent)
E) Roomates - ANSWER-E) Roomates
When an insured peril in the area makes it unsafe for you to be on the premises,
how long are you covered under "Coverage C- Additional living expenses":
A) 1 Month
B) 2 weeks
C) As long as required
D) 45 days - ANSWER-B) 2 weeks
IBC Homeowners forms were introduced in:
A) Mid-1960s
B) Mid-1950s
C) Mid-1990s
, D) Mid-1980s - ANSWER-A) Mid-1960s
What form is IBC 1151? - ANSWER-Homeowners Basic Form
What form is IBC 1153? - ANSWER-Homeowners Broad Form
What form is IBC 1155? - ANSWER-Homeowners Comprehensive Form
What is the most common Homeowners form?
A) Homeowners Basic Form
B) Homeowners Broad Form
C) Homeowners Comprehensive Form - ANSWER-C) Homeowners Comprehensive
Form
In order to be classified as Common Law what is the timeline required (with and
without child) ? - ANSWER-Must be either:
A) living together in a conjugal relationship outside of marriage continuously for
three years
*OR*
B) living together with child (natural or adoptive) for one year
Who would be considered insured under the a homeowners contract? Select all the
apply:
A) The insured grandmother who lives in the basement
B) Spouses 25 year old daughter who is away for school and not returned
C) A 20 year old exchange student staying with the insured temporarily
D) The insured roommate - ANSWER-A) and C)
Under extension of coverage of a basic homeowner policy, Removal of Debris is
covered:
A) Up to 5% of Dwelling limit
B) Within the limit of insurance and 5% above the policy limit
C) Without limitation
D) Within the policy limit - ANSWER-B) Within the limit of insurance and 5% above
the policy limit
Under extension of coverage of a basic homeowner policy, Property Removed
provides coverage for:
EXAM QUESTIONS WITH COMPLETE
SOLUTIONS
How long can property be vacant before it falls under Property Exclusion?
A) 60 days
D) 15 days
C) 30 days
D) 45 days - ANSWER-C) 30 days
Some examples of property exclusions are Evidences of debt or title, Securities,
Automobiles, Books of Accounts and Vacant property; Select another example of
property exclusions:
A) Money, Aircraft, Watercraft
B) Aircraft, Shrubs, Private Structures
C) Money, Shrubs, Private Structures
D) None of the above - ANSWER-A) Money, Aircraft, Watercraft
What is the Rationale behind a deductible? - ANSWER-A deductible charged to all
losses helps to keep insurance affordable.
If the deductible on the policy is stated to be $500 and there is a loss resulting in
$1500 of damage; the insurer is responsible for how much of the claim:
A) $1500
B) $500
C) $1000
D) $2000 - ANSWER-C) $1000 - the Insured is required to absorb $500 of the cost
as that is the amount of their deductible
How is Actual Cash Value is calculated ? - ANSWER-ACV= Replacement Cost -
Depreciation
The Underwriter has the option to:
A) Reject a risk
,B) Accept the risk on basis presented
C) Accept the risk with increased premium
D) Accept the risk with increased deductible
E) All of the above - ANSWER-E) All of the above
A Mortgagee is anyone having: *(Select best answer)*
A) Money lent to them
B) An Insurable interest in the insured property
C) A Mortgage on a house
D) None of the above - ANSWER-B) An Insurable interest in the insured property
Who is insured? Select the exclusion:
A) Spouse/Common Law Partner
B) Relatives of the named insured
C) Anyone under 21 in the care of the named insured
D) Students attending school (financially dependent)
E) Roomates - ANSWER-E) Roomates
When an insured peril in the area makes it unsafe for you to be on the premises,
how long are you covered under "Coverage C- Additional living expenses":
A) 1 Month
B) 2 weeks
C) As long as required
D) 45 days - ANSWER-B) 2 weeks
IBC Homeowners forms were introduced in:
A) Mid-1960s
B) Mid-1950s
C) Mid-1990s
, D) Mid-1980s - ANSWER-A) Mid-1960s
What form is IBC 1151? - ANSWER-Homeowners Basic Form
What form is IBC 1153? - ANSWER-Homeowners Broad Form
What form is IBC 1155? - ANSWER-Homeowners Comprehensive Form
What is the most common Homeowners form?
A) Homeowners Basic Form
B) Homeowners Broad Form
C) Homeowners Comprehensive Form - ANSWER-C) Homeowners Comprehensive
Form
In order to be classified as Common Law what is the timeline required (with and
without child) ? - ANSWER-Must be either:
A) living together in a conjugal relationship outside of marriage continuously for
three years
*OR*
B) living together with child (natural or adoptive) for one year
Who would be considered insured under the a homeowners contract? Select all the
apply:
A) The insured grandmother who lives in the basement
B) Spouses 25 year old daughter who is away for school and not returned
C) A 20 year old exchange student staying with the insured temporarily
D) The insured roommate - ANSWER-A) and C)
Under extension of coverage of a basic homeowner policy, Removal of Debris is
covered:
A) Up to 5% of Dwelling limit
B) Within the limit of insurance and 5% above the policy limit
C) Without limitation
D) Within the policy limit - ANSWER-B) Within the limit of insurance and 5% above
the policy limit
Under extension of coverage of a basic homeowner policy, Property Removed
provides coverage for:
