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

IIC RIBO-LEVEL-1 Online Questions & Answers

• Question 221:

  Your client calls to confirm they are renovating their home, this will include structural work.

  As the broker, what should you do next?

  A. No action required, as the policy form is comprehensive.
  B. Run a new insurance valuator on the home, only notify underwriting if the value is greater than the current limit.
  C. As long as the renovation is under 30 days, no action is required.
  D. Notify underwriting.
  D. Notify underwriting.

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  Explanation

  Structural renovations are a material change to the property risk and should be reported to underwriting. The insurer may need to review occupancy, construction exposure, values, and policy conditions. Assuming no action because the form is comprehensive or because the work is short-term does not meet the broker's duty to disclose material changes.

• Question 222:

  Which item is NOT covered under the Standard Equipment breakdown coverage?

  A. Boilers.
  B. Hot water tanks.
  C. Compressors.
  D. Office water coolers.
  D. Office water coolers.

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  Explanation

  Standard equipment breakdown coverage is aimed at mechanical or electrical breakdown of covered equipment such as boilers, hot water tanks, compressors, and similar machinery. Office water coolers are not normally the equipment category contemplated by standard equipment breakdown coverage. The other items fit the machinery and systems exposure more closely.

• Question 223:

  Berwyn, a Broker, has a client who plans to demolish their cottage and replace it with a new cottage. Berwyn has a lot of experience adding renovation riders to policies, but has never underwritten one of this scope.

  What should Berwyn do?

  A. Proceed with a quote using Berwyn's renovation rider experience.
  B. Refer the client to the Broker's commercial lines department.
  C. Speak to a colleague who has experience with this type of risk and ask for guidance.
  D. Arrange for coverage through the builder's commercial insurance policy.
  C. Speak to a colleague who has experience with this type of risk and ask for guidance.

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  Explanation

  A demolition and rebuild is beyond an ordinary renovation rider and can create significant property, liability, and construction exposures. The broker should seek guidance from someone experienced with that type of risk before advising or quoting. Proceeding based only on renovation experience or relying on the builder's policy would not adequately protect the client's interest.

• Question 224:

  During an audit of your brokerage, it is discovered that numerous client files have not been updated with recent address changes. As a broker, you are aware of the role of the Financial Services Regulatory Authority of Ontario (FSRA. in ensuring compliance with insurance laws, including maintaining accurate client records.

  Which steps should you NOT take to rectify this issue?

  A. Inform the Principal Broker and suggest implementing a system to remind clients to update their information regularly.
  B. Temporarily suspend any policy renewals for clients with outdated information until records are accurate.
  C. Collaborate with the IT department to automate the notification process for address updates in the system.
  D. Encourage staff to make routine follow-up calls to clients to verify and update their contact details.
  B. Temporarily suspend any policy renewals for clients with outdated information until records are accurate.

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  Explanation

  Suspending renewals for clients with outdated addresses could create coverage and service problems and is not the right corrective action. The better steps are to notify the Principal Broker, improve systems, and verify or update client information. The broker should correct records and controls, not interrupt client renewals without a proper underwriting or regulatory basis.

• Question 225:

  The "Pair and Set" clause in a Property insurance policy states which of the following?

  A. The insurer will only pay one-half of the insurance if one of a pair is destroyed or damaged.
  B. The insurer will not pay for loss of a pair of precious stones unless they are properly set in the amount containing them.
  C. Settlement of a loss with respect to an article which is part of a set, shall be based upon the basis that the entire set has been destroyed or damaged.
  D. Settlement of a loss with respect of an article which is part of a set, shall be based upon a reasonable proportion of the value of the set, but not the entire set.
  D. Settlement of a loss with respect of an article which is part of a set, shall be based upon a reasonable proportion of the value of the set, but not the entire set.

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  Explanation

  A pair and set clause generally pays a reasonable proportion of the value of the whole pair or set when only part is lost or damaged. It does not treat the entire set as destroyed, nor does it automatically pay one-half regardless of value. The clause prevents overpayment while recognizing the article's relationship to the complete set.

• Question 226:

  As a broker looking to stay current on industry trends and insurance company changes, what is an effective way to utilize industry designations to enhance your knowledge?

  A. Enroll in a Chartered Insurance Professional (CIP) course to understand comprehensive insurance principles and practices.
  B. Focus solely on daily brokerage tasks and learn about industry changes through experience.
  C. Attend only RIBO-mandated Continuing Education sessions.
  D. Rely exclusively on senior colleagues to inform you about new trends.
  A. Enroll in a Chartered Insurance Professional (CIP) course to understand comprehensive insurance principles and practices.

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  Explanation

  A formal insurance designation course such as CIP is a structured way to deepen technical knowledge and stay current. The continuous learning competency expects brokers to seek relevant education beyond minimum daily experience when needed. Relying only on routine work, mandatory sessions, or colleagues is less complete and less proactive.

• Question 227:

  There is a leakage of gas in a nearby factory and the city announces the residents to leave town.

  Which optional additional coverage of the homeowners' policy covers the expenses to stay in another town?

  A. Contamination Insurance.
  B. Mass Evacuation.
  C. Rental Insurance.
  D. Smoke Coverage.
  B. Mass Evacuation.

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  Explanation

  Mass evacuation coverage is designed for additional expenses when civil authority requires residents to leave because of a nearby dangerous event such as contamination, fire, or gas leakage. The loss is not simply smoke coverage, rental insurance, or contamination insurance as a separate named homeowners extension in this scenario. The key trigger is the ordered evacuation.

• Question 228:

  A landlord asks for a certificate of insurance from a tenant's broker.

  What should the broker explain about the certificate?

  A. It is evidence of coverage at the time it is issued, but it does not by itself amend the policy or guarantee future coverage.
  B. It automatically adds the landlord as a named insured for all losses.
  C. It replaces the policy wording whenever the certificate wording is broader.
  D. It guarantees that the insurer will pay every claim described in the lease.
  A. It is evidence of coverage at the time it is issued, but it does not by itself amend the policy or guarantee future coverage.

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  Explanation

  A certificate of insurance is evidence of coverage at the time it is issued, but it does not itself amend the policy or guarantee future coverage. Adding insured status or expanding coverage requires proper policy wording or endorsement. A certificate cannot override the policy or guarantee every contractual obligation in a lease.

• Question 229:

  Your insured's young son has just purchased an automobile and wants you to insure it in his father's name and

  show himself as an occasional driver.

  Which of the following steps should you take?

  A. Issue the policy as requested.
  B. Decline to issue the policy as the son is obviously the principal driver and registered owner.
  C. Place the policy with another insurer and rate the father as the principal driver.
  D. Advise the son to register the vehicle in his mother's name and rate it on her driving record.
  B. Decline to issue the policy as the son is obviously the principal driver and registered owner.

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  Explanation

  The policy should not be issued in the father's name when the son is the registered owner and principal driver. That would misrepresent ownership and use, creating underwriting and coverage problems. The broker must decline the misstructured request and arrange coverage accurately if possible.

• Question 230:

  An insured dies in a fire at their home caused by careless smoking.

  What action will the insurer of the dwelling take?

  A. Deny the loss to building and contents as the insured caused the fire.
  B. Pay the loss to the building and contents to the insured's estate.
  C. Pay the building and contents loss into Court in trust.
  D. Be unable to pay the property loss as the named insured is no longer available to sign the proof of loss.
  B. Pay the loss to the building and contents to the insured's estate.

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  Explanation

  The insured's death does not by itself void the property coverage for a covered fire loss. The insurer would normally settle the covered building and contents loss with the insured's estate or legal representative. Careless smoking may be negligence, but it is not the same as intentional loss or a reason to deny every property claim in this scenario.