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Alberta General Insurance Level 1 Exam, Practice
Exam And Study Guide Newest 2025/2026 Complete
Questions And 100% Correct Detailed Answers
|Updated & Graded A+|Newest Version
Insurance allows people to live their lives and carry on
their business without the fear that some single
catastrophe or natural disaster could physically and
financially ruin them. Which of the following best defines
"insurance"?
a) It is minimization of detrimental effects of risk
b) It is the method of sharing the losses of the few
individuals in a group who suffer them among the many
members of the group who do not
c) It influences the outcome of a loss
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d) It is based on risk or uncertainty - ANSWER-b) It is the
method of sharing the losses of the few individuals in a
group who suffer them among the many members of the
group who do not
Many large insurers market their policies through the
independent brokerage system. An independent broker is
a) one who has authority from a company to manage all of
that company's business within his or her territory
b) one who has authority from a company to appoint other
agents and to settle claims
c) one who represents only one company
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d) a business person who may place business with any
number of insurers - ANSWER-d) a business person who
may place business with any number of insurers
The insurance industry manages large pools of money
from premiums which are generally paid in advance. This
capital has a positive influence on the economy. An
example of this is
a) insurers invest in federal, provincial and municipal
bonds, thus recycling premiums into community
development
b) the peace of mind that results when substituting a
known premium payment for an uncertain loss payment
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c) businesses must set aside reserves of money in case of
a future loss or accident
d) insurance protects the insured's interests in property,
but excludes the lender's investment - ANSWER-a)
insurers invest in federal, provincial and municipal bonds,
thus recycling premiums into community development
Your insured, a sole proprietor, purchased a building
valued at $1 million. The insurance policy has a
coinsurance clause based on the replacement cost value
of 90%. Contrary to your advice, your insured insures the
building for only $500,000. He suffers a windstorm loss
totaling $150,000. How much will the insurer pay?
a) $75,000
Alberta General Insurance Level 1 Exam, Practice
Exam And Study Guide Newest 2025/2026 Complete
Questions And 100% Correct Detailed Answers
|Updated & Graded A+|Newest Version
Insurance allows people to live their lives and carry on
their business without the fear that some single
catastrophe or natural disaster could physically and
financially ruin them. Which of the following best defines
"insurance"?
a) It is minimization of detrimental effects of risk
b) It is the method of sharing the losses of the few
individuals in a group who suffer them among the many
members of the group who do not
c) It influences the outcome of a loss
,2|Page
d) It is based on risk or uncertainty - ANSWER-b) It is the
method of sharing the losses of the few individuals in a
group who suffer them among the many members of the
group who do not
Many large insurers market their policies through the
independent brokerage system. An independent broker is
a) one who has authority from a company to manage all of
that company's business within his or her territory
b) one who has authority from a company to appoint other
agents and to settle claims
c) one who represents only one company
,3|Page
d) a business person who may place business with any
number of insurers - ANSWER-d) a business person who
may place business with any number of insurers
The insurance industry manages large pools of money
from premiums which are generally paid in advance. This
capital has a positive influence on the economy. An
example of this is
a) insurers invest in federal, provincial and municipal
bonds, thus recycling premiums into community
development
b) the peace of mind that results when substituting a
known premium payment for an uncertain loss payment
, 4|Page
c) businesses must set aside reserves of money in case of
a future loss or accident
d) insurance protects the insured's interests in property,
but excludes the lender's investment - ANSWER-a)
insurers invest in federal, provincial and municipal bonds,
thus recycling premiums into community development
Your insured, a sole proprietor, purchased a building
valued at $1 million. The insurance policy has a
coinsurance clause based on the replacement cost value
of 90%. Contrary to your advice, your insured insures the
building for only $500,000. He suffers a windstorm loss
totaling $150,000. How much will the insurer pay?
a) $75,000
