IIC RIBO-LEVEL-1 Online Practice Questions and Exam Preparation

IIC RIBO-LEVEL-1 Online Questions & Answers

• Question 131:

  Which of the following is a section in a Commercial General Liability policy?

  A. Additional living expenses.
  B. Personal property.
  C. Personal injury and advertising liability.
  D. Crime.
  C. Personal injury and advertising liability.

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  Explanation

  Personal injury and advertising liability is a recognized coverage section in many Commercial General Liability policies. Additional living expenses and personal property are habitational property concepts, and crime is usually a separate commercial coverage. The CGL policy addresses liability categories rather than property or crime coverage sections.

• Question 132:

  A claim for "Additional Living Expense" under a Homeowners Comprehensive policy would NOT be covered if what event occurred?

  A. The insured incurs moving expenses after their home is severely damaged by fire.
  B. The Fire Department prohibits access to your insured's home for one week as a result of fire in a neighbouring home.
  C. The insured's home is infested with carpenter ants and the insured must move out until extermination procedures are completed.
  D. The insured's son starts a grease fire in the kitchen causing smoke damage to the entire house.
  C. The insured's home is infested with carpenter ants and the insured must move out until extermination procedures are completed.

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  Explanation

  Additional Living Expense requires an insured peril or covered civil authority trigger. Carpenter ants and extermination are typically excluded maintenance or infestation issues rather than an insured peril. Fire damage to the home, nearby fire preventing access, or smoke damage from a covered fire can trigger ALE depending on wording.

• Question 133:

  Under the O.A.P.

  1 Owner's Policy, what is the standard deductible for a "Direct Compensation - Property Damage" (DCPD) claim in Ontario?

  A. $300.
  B. $500.
  C. $0.
  D. $1,000.
  C. $0.

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  Explanation

  The standard deductible for Direct Compensation - Property Damage in Ontario is zero unless a deductible has been selected or applied by endorsement or policy terms. DCPD is designed to let the insured claim from the insured's own insurer for eligible vehicle damage. The dollar deductible amounts listed do not represent the standard base deductible.

• Question 134:

  Your insured belongs to a car pool and uses their automobile to transport the other three members to work every fourth week. One of the other members drives each of the other three weeks.

  As their insurance broker, what would you do to make sure your client is covered against claims from passengers for injuries?

  A. Add the change form "Permission to Carry Paying Passengers" to the O.A.P. 1 Owner's Policy.
  B. Add "Passenger Hazard" change form to the O.A.P. 1 Owner's Policy.
  C. The standard O.A.P. 1 Owner's Policy automatically covers the situation. No change is necessary.
  D. Advise the insurer to reclassify the vehicle as business use and re-rate the policy.
  C. The standard O.A.P. 1 Owner's Policy automatically covers the situation. No change is necessary.

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  Explanation

  Ordinary car pool use, where passengers share transportation and no business passenger-hazard exposure is created, is normally covered by the standard OAP 1 without a change. A paying-passenger endorsement or business reclassification is not necessary for the reciprocal car pool arrangement described. The key is that it is a shared commuting arrangement, not a commercial passenger operation.

• Question 135:

  A Broker receives a large cash premium from a client for a new policy. The Broker is in a hurry to meet a friend for lunch and decides to put the cash into their personal bank account, intending to transfer the exact amount to the brokerage's trust account later that afternoon.

  What is this action considered under RIBO regulations?

  A. An acceptable temporary measure as long as the funds are transferred the same day.
  B. Commingling of funds, which is an act of professional misconduct.
  C. A standard business practice for brokers working outside of the office.
  D. A minor administrative error that only requires a verbal warning from the Principal Broker.
  B. Commingling of funds, which is an act of professional misconduct.

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  Explanation

  Client premiums are trust money and must be kept separate from the broker's personal funds. Depositing cash into a personal account, even temporarily, is commingling and a serious professional misconduct issue. Same-day intent to transfer the funds does not remove the breach because the separation of trust money is mandatory.

• Question 136:

  An insured is involved in an accident where a third party is 100% at fault. The insurer pays the insured $5,000 for their car repairs. The insurer then sues the third party to recover that $5,000.

  What is this legal process called?

  A. Indemnity.
  B. Contribution.
  C. Subrogation.
  D. Arbitration.
  C. Subrogation.

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  Explanation

  Subrogation is the insurer's right, after indemnifying the insured, to pursue recovery from the party responsible for the loss. The insurer has paid the insured and is now suing the at-fault third party to recover the amount paid. Indemnity describes restoring the insured after loss, contribution involves sharing between insurers, and arbitration is a dispute process.

• Question 137:

  An insured requests that the limit of liability in their automobile policy O.A.P. 1 Owner's Policy be reduced.

  What is the minimum amount that must be carried under Ontario law?

  A. $200,000 Bodily Injury and Property Damage
  B. $100,000 Bodily Injury and Property Damage
  C. $100,000- Bodily Injury, $500,000 - Property Damage
  D. $500,000 Bodily Injury and Property Damage
  A. $200,000 Bodily Injury and Property Damage

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  Explanation

  Ontario automobile policies must carry at least $200,000 of third party liability coverage for bodily injury and property damage. A lower limit cannot satisfy the legal minimum. Larger limits may be available or advisable, but the question asks for the minimum amount that must be carried by law.

• Question 138:

  A Broker is found guilty of violating a provision of the Registered Insurance Brokers (RIB) Act.

  What is the maximum punishment an individual can receive?

  A. A fine of $25,000.
  B. A fine of $50,000.
  C. A fine of $75,000.
  D. A fine of $100,000.
  A. A fine of $25,000.

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  Explanation

  For an individual violation under the RIB Act framework, the maximum punishment in this question is a $25,000 fine. The higher figures overstate the individual maximum being tested. Regulatory penalties can also include licensing consequences, but the question asks specifically about the maximum punishment amount among the listed fines.

• Question 139:

  Adam's primary job is driving for Uber and Lyft.

  As a self employed contractor what coverage would provide him with the best liability protection while driving?

  A. Contractor's Liability.
  B. Umbrella Liability.
  C. Section 3, Liability, under the OAP1.
  D. Comprehensive General Liability.
  C. Section 3, Liability, under the OAP1.

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  Explanation

  When Adam is driving, the automobile liability coverage under Section 3 of OAP 1 is the core coverage for third party automobile liability, subject to the policy and use eligibility. A general contractor or CGL policy does not replace automobile liability while operating the vehicle. An umbrella may provide excess protection, but it relies on primary auto liability coverage.

• Question 140:

  When determining the actual cash value of a building, which factors is NOT taken into consideration?

  A. The resale value of the building.
  B. The ownership of the building.
  C. The normal life expectancy of the building.
  D. The condition of the building immediately before the damage occurred.
  B. The ownership of the building.

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  Explanation

  Actual cash value considers factors such as replacement cost, depreciation, condition, age, useful life, and sometimes resale value. Ownership of the building does not determine the amount of actual cash value. The question asks which factor is not part of valuation, and ownership is a legal interest rather than a valuation measure.