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

IIC RIBO-LEVEL-1 Online Questions & Answers

• Question 21:

  Your insured starts operating a dog grooming business in their garage, which is attached to their principal residence insured under a standard homeowner's comprehensive policy. Annual revenue is $10,000, no employees.

  What is the most appropriate course of action for you as their Broker?

  A. No action is needed as they still reside in the home.
  B. No action is needed as the revenue is only $10,000 per year.
  C. Advise the client that a commercial policy or home based business endorsement may be required.
  D. Advise the client to call back should the business ever employ anyone or become a full time job.
  C. Advise the client that a commercial policy or home based business endorsement may be required.

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  Explanation

  A dog grooming business in an attached garage introduces business property, liability, customer, and animal exposures. The broker should explain that a home-based business endorsement or commercial policy may be required. Residence in the home, modest revenue, or no employees does not make the business exposure automatically covered.

• Question 22:

  A business asks why its professional liability policy says it is written on a claims-made basis.

  Which explanation is best?

  A. Coverage usually depends on the claim being made and reported within the policy period or any applicable reporting extension, subject to the wording.
  B. Coverage applies only if the negligent act occurs after the policy expires.
  C. Coverage automatically applies forever to every act that happened during the policy year, even if no claim is ever reported.
  D. Coverage responds only to physical injury claims and never to financial loss allegations.
  A. Coverage usually depends on the claim being made and reported within the policy period or any applicable reporting extension, subject to the wording.

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  Explanation

  A claims-made policy generally responds when the claim is made and reported during the policy period or reporting extension, subject to retroactive date and wording. It is different from an occurrence policy, where the event date is central.

  Assuming indefinite future reporting or coverage for acts after expiry misunderstands the claims-made trigger.

• Question 23:

  An insured's property has been damaged by fire. According to the Statutory Conditions, the insured must provide a "Proof of Loss" to the insurer.

  What is the standard timeframe for the insurer to pay the claim once a complete Proof of Loss has been received (assuming no appraisal is required)?

  A. 30 days.
  B. 45 days.
  C. 60 days.
  D. 90 days.
  C. 60 days.

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  Explanation

  After a complete proof of loss is received and no appraisal delays the matter, the statutory payment period for a fire claim is 60 days. Shorter timeframes such as 30 or 45 days do not match the standard condition being tested, and 90 days overstates the ordinary payment period after proof of loss.

• Question 24:

  Kimberly has lost one of Kimberly's diamond earrings and wishes to claim the loss. The earrings were not scheduled separately on Kimberly's policy.

  What information would the broker provide Kimberly with respect to Kimberly's claim?

  A. Kimberly can claim the value of one earring subject to Kimberly's deductible and special limits of insurance on Kimberly's policy.
  B. Kimberly can claim the value of the pair of earrings subject to Kimberly's deductible and special limits of insurance on Kimberly's policy.
  C. Kimberly cannot claim for the loss of the pair of earrings as these were not scheduled on Kimberly's property policy.
  D. Kimberly can claim for the loss of the pair of earrings as Kimberly's policy contains a replacement cost endorsement.
  A. Kimberly can claim the value of one earring subject to Kimberly's deductible and special limits of insurance on Kimberly's policy.

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  Explanation

  When one earring from an unscheduled pair is lost, settlement is usually limited to the value of the lost item, subject to deductible, special limits, and pair and set wording. The policy does not automatically pay for the entire pair when only one is lost. Scheduling may provide broader treatment, but the question says the earrings were not scheduled.

• Question 25:

  To establish cause of legal action against someone, what is NOT required to satisfy the court?

  A. Duty of care.
  B. Consideration.
  C. The duty was breached.
  D. Relationship between the breach and damage.
  B. Consideration.

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  Explanation

  A negligence action requires a duty of care, a breach of that duty, causation, and damages. Consideration is a contract formation concept, not an element needed to establish negligence. The other listed elements connect directly to legal liability for negligent conduct.

• Question 26:

  The Insured's contents have been removed from their premises due to an insured peril.

  Under the property policy, how long will the Insured contents be covered?

  A. 15 days or until the policy term ends, whichever comes first.
  B. 25 days or until the policy term ends, whichever comes first.
  C. 30 days or until the policy term ends, whichever comes first.
  D. 60 days or until the policy term ends, whichever comes first.
  C. 30 days or until the policy term ends, whichever comes first.

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  Explanation

  Property temporarily removed because of an insured peril is usually covered for a limited period, and this question tests the 30-day limit or until the policy term ends, whichever occurs first. The shorter 15-day and 25-day periods understate the temporary removal coverage, and 60 days overstates the standard limit being tested.

• Question 27:

  A broker is recommending a policy from an insurer in which the brokerage has a financial interest. The client has not asked about the brokerage's compensation or relationships.

  What should the broker do?

  A. Clearly disclose the conflict or potential conflict before the client decides and keep evidence of the disclosure in the client file.
  B. Wait until the client asks about ownership or compensation because unsolicited disclosure could confuse the client.
  C. Place the policy first and include the disclosure only with the issued policy documents.
  D. Avoid discussing the relationship if the recommended policy has the lowest premium.
  A. Clearly disclose the conflict or potential conflict before the client decides and keep evidence of the disclosure in the client file.

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  Explanation

  Conflict disclosure must be clear, timely, and documented so the client can make an informed decision before relying on the broker's recommendation. Waiting for the client to ask or disclosing only after policy issuance is too late. A lower premium does not remove the duty to disclose a material financial interest.

• Question 28:

  Which of the following actions complies with RIBO requirements on confidentiality and referral fees?

  A. Pay a referral fee to a licensed individual informing the client about the referral arrangement is not needed in this situation.
  B. Pay a referral fee to another RIBO licensee and obtain the client's consent before sharing the client's personal information.
  C. Provide a discount to a client in exchange for agreeing to have their personal information shared with marketing firms.
  D. Avoid paying any referral fees even to licensed Brokers, regardless of written agreements or disclosures.
  B. Pay a referral fee to another RIBO licensee and obtain the client's consent before sharing the client's personal information.

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  Explanation

  A referral arrangement can be acceptable when it is handled within the licensing and disclosure rules, and client personal information must not be shared without proper consent. The reliable response combines a permitted licensed referral relationship with consent before disclosure of client information. Paying without disclosure, selling information for a discount, or treating every referral fee as prohibited does not match the compliance balance.

• Question 29:

  A Secondary Residence has a main building with two detached private structures on the same premises.

  Under the 10% provision of the Secondary Residence Building and/or Contents Form, what is the maximum which may be claimed for the loss of either one of these detached private structures?

  A. 10% of the total amount of insurance
  B. Obtained by dividing the amount of insurance in the proportions that the value of each structure bears to the total value of both structures at the time of loss
  C. Obtained by dividing the amount of insurance by the number of structures
  D. An amount equal to the value of the damaged structure without regard to other structures
  B. Obtained by dividing the amount of insurance in the proportions that the value of each structure bears to the total value of both structures at the time of loss

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  Explanation

  When the secondary residence form has multiple detached private structures, the available amount is allocated according to the proportion each structure's value bears to the total value of all such structures. It is not a flat 10 percent for either one or an equal division unless the values happen to be equal. The proportional method controls the maximum claim for one structure.

• Question 30:

  A broker receives an email that appears to come from an insurer and asks the broker to open a link to release a client's claim payment. The email address is slightly misspelled and the message is urgent.

  What should the broker do?

  A. Avoid clicking the link, report the suspected phishing email under brokerage procedure, and verify through a trusted channel if needed.
  B. Click the link because claim payments are time sensitive.
  C. Forward the email to the client so the client can decide whether it is real.
  D. Reply with the client's policy number and banking details to test whether the sender responds.
  A. Avoid clicking the link, report the suspected phishing email under brokerage procedure, and verify through a trusted channel if needed.

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  Explanation

  A misspelled sender, urgent payment language, and a link are phishing warning signs. The broker should avoid clicking, report the suspected email under brokerage procedure, and verify through a trusted channel if necessary. Forwarding it to the client or replying with sensitive information could spread the risk and compromise client data.