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Last Updated: April 2024  

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                              RIBO Licensing Entry Level 1 EXAM QUESTIONS and ANSWERS

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Under a typical group insurance program, which one (1) of the following benefits is unlikely to be covered? OA) Fees of paramedicals, such as chiropractors. OB) Nursing care. OC) Experimental drugs. OD) Ambulance service.

Your client insures his/her condominium unit under a Condominium Unit Owners Comprehensive policy. The policy includes $10,000 Property Loss Assessment coverage. The building suffers severe damage in a fire. The Condominium Corporation assesses each unit owner $500 to cover the deductible under its Master Policy on the building. How much would your client’s policy pay? OA) 80% of $500 because all Condominium Corporation Master Policies are subject to 80% co-insurance. OB) $500 less the policy deductible. OC) $500.00 OD) Nothing.

Which one (1) of the following would NOT be considered a “fiduciary” with respect to the property of others? OA) An insurance broker. OB) A trust company. OC) An insurance company. OD) An insurance adjuster.

A building owned by A is sold for cash to B. Two days after the sale, a fire destroys the building causing a loss of $100,000. Neither the broker nor the insurer were notified of the change in ownership. How much would the insurer pay to B? OA) $80,000.00 OB) $100,000.00 OC) $50,000.00 OD) Nothing.

Which one (1) of the following statements about “Section 6 – Direct Compensation-Property Damage Coverage” of O.A.P. 1 Owner’s Policy is INCORRECT? OA) It covers damage to the automobile, certain unscheduled trailers, their equipment and contents caused by another automobile in Ontario, including loss of their use. OB) The policy on the other vehicle must be issued by an Ontario licensed insurer or one that has filed with the Financial Services Regulatory Authority of Ontario to provide this coverage. OC) The accident may occur anywhere in Canada and at least one other automobile involved is insured under a motor vehicle liability policy. OD) The insured would be covered, partially under O.A.P. 1 if partially at fault for the accident.

Your insured is involved in an accident and his/her automobile is heavily damaged. Repairs are estimated at $7,500. He/she calls to advise you that the insurer does not intend to have the vehicle repaired, but will make a cash settlement, as its actual cash value is shown in the “Red Book” as $5,000. What should you tell your insured? OA) The insurer is obliged to pay the full cost of the repairs if your insured wants the car to be repaired. OB) The insured is entitled to obtain an appraisal but must share the costs equally with the insurer. OC) Sue the insurer for the full $7,500. OD) Post on social media about the matter to bring pressure on the insurer for a better settlement through the publicity it will generate.

Directly or indirectly, making an agreement as to the premium to be paid other than as set forth in the policy is considered “misconduct” under the RIB Act. Which one (1) of the following actions is NOT “misconduct”? OA) Allowing a refund to the client not authorized by the policy. OB) Giving a rebate to a policyholder of the whole or part of the premium. OC) Paying the cost of a family’s vacation in Florida in return for them agreeing to purchase their insurance from you. OD) Allowing a dividend or bonus as provided for in the policy.

A local automobile dealer offers to pass leads to you as a registered insurance broker when cars are sold to customers who require automobile insurance. In return, he/she wants the premium their spouse’s car automobile insurance to be reduced. How would you respond to this request? OA) Certainly. I can reduce the premium up to the amount of the commission. OB) I can pay you a referral fee equal to the first year’s premium. OC) Under RIBO regulations, I am prohibited from paying a finder’s fee to a person who is not licenced or registered as a general insurance intermediary or who is not listed under Ontario Regulation 991, Section 15 (12). OD) I cannot pay you anything directly, but I can give your spouse a free home security system instead.

What is the purpose of the “Sue and Labour Clause” in an insurance policy? OA) It requires the insurer to sue others who may be responsible for loss or damage to the insured property. OB) It requires the insurer to do some of the repair work to restore the property. OC) It requires the insured to take all reasonable steps in and about the recovery of the property in return for agreement that the insurer will contribute to the cost of doing so. OD) It permits the insurer to sue the insured for failure to maintain the property in good condition.

Your insured holds a property insurance policy and dies. Shortly afterwards, a fire damages the insured premises. Which one (1) of the following statements is true? OA) The insurer does not have to pay because there is no insured to make a claim. OB) The insurer is liable for loss occurring after change of title by succession. OC) The policy is void upon the death of the insured. OD) The insurer will not pay because the policy has not been transferred to his/her beneficiary.

What is the purpose of a contract between an insurer and an insurance broker (company/broker agreement)? OA) To satisfy the requirements of the Department of Insurance. OB) To formalize in writing the authority of the broker and the responsibilities of each party. OC) To authorize the broker to operate a Trust Account. OD) To meet the requirements of RIBO.

Which one (1) of the following conditions affects the amount of settlement of an insured loss? OA) Subrogation Clause. OB) Named Perils Rider. OC) Co-insurance Clause. OD) Subscription policy with four insurers.

What is “subrogation”? OA) It is the insurable interest of the mortgagee of a property. OB) It is the valuation of property after a loss covered by insurance. OC) It is the amount of insurance is too low to meet the co-insurance requirements in a policy. OD) It is action by an insurer after it pays a loss to recover from the party responsible.

Is a snowmobile considered to be an automobile for insurance purposes in Ontario? OA) No, it is not considered to be an automobile. OB) Yes, wherever it is being operated. OC) Only when being operated on a public highway. OD) Not when being operated by an underage driver.

Why would you recommend a “Valued” policy on valuable property to an insured? OA) It establishes, at the time the policy is issued, the amount of insurance the insurer will pay in the event the property is totally damaged, lost or destroyed. OB) It provides for replacement cost of the property irrespective of the amounts of the insurance. OC) It is a special kind of policy, rarely issued and is therefore, highly “valued”. OD) It will pay for the full value of the damage, however caused.

An individual who acts or aids in any manner in soliciting, negotiating or procuring the making of any contract of insurance is required to be registered as an insurance broker if he/she does which one (1) of the following? OA) Is licensed as an insurance agent, representing a single insurer and a Facility Association carrier. OB) Performs these duties as a favour to a friend who does not understand English. OC) Performs these duties on behalf of their employer with respect to the employer’s own insurance program. OD) Deals directly with the public and receives compensation.

Your insured has a Condominium Unit Owners Comprehensive Policy. While smoking in bed, he/she negligently causes a fire in his/her unit. The fire spreads to the adjoining unit and the occupant is overcome by smoke and dies. Under which section of the policy would the insurer respond if a claim were made by the relatives of the deceased person? OA) Voluntary Medical Payments (Coverage F). OB) Personal Liability (Coverage E). OC) Loss Assessment (Coverage I). OD) Loss Assessment (Coverage A2).

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Is a snowmobile considered to be an automobile for insurance purposes in Ontario? OA) No, it is not considered to be an automobile. OB) Yes, wherever it is being operated. OC) Only when being operated on a public highway. OD) Not when being operated by an underage driver.

Why would you recommend a “Valued” policy on valuable property to an insured? OA) It establishes, at the time the policy is issued, the amount of insurance the insurer will pay in the event the property is totally damaged, lost or destroyed. OB) It provides for replacement cost of the property irrespective of the amounts of the insurance. OC) It is a special kind of policy, rarely issued and is therefore, highly “valued”. OD) It will pay for the full value of the damage, however caused.

The standard maximum Income Replacement Benefit payable under O.A.P. 1 Owner’s Policy “Section 4 – Accident Benefits Coverage” is $400 per week for the first 104 weeks. The actual amount payable is based on which one (1) of the following? OA) 70% of Gross Income. OB) 80% of Gross Income. OC) 70% of Net Income. OD) 80% of Net Income.

Which one (1) of the following statements best defines a “mortgagor”? OA) It is the one who owes the money. OB) It is the one to whom the money is owed. OC) It is the insurer who must pay the money in the event of a claim. OD) It is the document which shows the amount of money owed.

A person insured under a property policy goes bankrupt and sustains a loss covered by the policy shortly afterwards. Which one (1) of the following statements describes the legal situation that exists? OA) The policy is void because the insured is bankrupt. OB) The insurer is liable to pay the loss to the trustee in bankruptcy. OC) Bankruptcy is considered a material change to the risk and the policy is therefore void. OD) The loss would be paid by the Trustee in Bankruptcy.

Section II – Liability Coverage of the Homeowners Comprehensive policy provides coverage for Voluntary Payment for Damage to Property in which one (1) of the following situations? OA) Damage to a ride-on lawn mower rented from a local rent-all establishment. OB) Damage caused by a guest, who backed an automobile into a portable barbecue which the insured had borrowed from a neighbour. OC) Property of others damaged intentionally by the insured’s 10 year old son. OD) Theft from insured’s premises of a shotgun on loan from a local sporting goods store.

One of three tenants in your insured’s rented triplex, sets fire to his apartment, is charged with arson and jailed. Next day the tenant’s wife bails out her husband who allegedly set the fire and they return to live in the damaged apartment. The insurance company wishes to retire from this risk as soon as possible. What procedure must the insurer follow to legally cancel the policy? OA) Insurer can cancel in five days by written notice of termination personally delivered and any return premium paid to insured. OB) Insurer cannot cancel the policy mid-term and must remain on risk until the renewal date. OC) Cancellation can only be made fifteen (15) days following receipt of cancellation notice by registered mail. OD) Policy must remain in force but any additional damage done by the tenant will not be covered.

From an insurance standpoint, which one (1) of the following situations will the premises be considered “vacant”? OA) When the occupants are away on vacation. OB) When the occupants moved out and no new occupant has moved in. OC) When they are closed up for the night. OD) When the occupants are living elsewhere temporarily while major building repairs are being made.

Every insurance policy provides for termination of a policy by either the insurer or by the insured. When will cancellation take effect if the insured person wishes to cancel a policy? OA) On the date the policy or Lost Policy Voucher is signed off by the insured. OB) Thirty (30) days after receipt of a registered letter requesting cancellation. OC) Ten (10) days after a written request has been delivered to the insurer. OD) As soon as the insured receives payment of any return premium due.

An individual comes to your office and requests an automobile insurance policy. He/she has valid owner and driver permits, but reveals a driving record that includes several impaired driving convictions. It is 10:30 a.m. and the person has every appearance that they could have another impaired charge on the way home. You are also very aware that the management of your office is concerned with its loss ratio. What would be an appropriate response? OA) Tell the individual your companies are unable to help because of their current restrictions on drivers with impaired convictions. OB) Send him/her down the street to a competitor whom you feel is more inclined to write this class of business. OC) Ask the individual to complete an application which you will submit to an insurer. OD) Tell the individual you require payment of a fee for service before you search for an insurer to accept an application.

The “Freezer Foods Coverage” in a Comprehensive Tenant Package Policy covers spoilage of the contents of a food freezer unit caused by a change in temperature, subject to all of the following conditions EXCEPT which one (1)? OA) The spoilage is caused by outside power interruption. OB) The spoilage is caused by mechanical breakdown of the freezer. OC) The freezer’s electrical power plug is accidentally pulled out from its wall plug. OD) Payment for the loss does not exceed the amount of $2,000.

Which one (1) of the following statements is true regarding Replacement Cost insurance? OA) A professional appraisal is required by insurers before they will insure any property for its Replacement Cost. OB) Most insurers do not require an insured to replace a damaged property as a condition to be indemnified for its Replacement Cost. OC) A condition of this coverage is that replacement must be with materials of similar kind and quality. OD) Only commercial properties can be insured for their Replacement Cost.

Which one (1) of the following situations may have an effect upon the premium charged for a Homeowners Comprehensive policy? OA) Theft coverage on unscheduled jewellery up to a $2,000 limit. OB) The house is unoccupied for three (3) months during the winter. OC) The insured installs a wood burning stove. OD) The insured’s mother-in-law moves into the house.

Your insured is employed at a local garage as a mechanic. The garage premises are burglarized and the insured’s tools and tool box are stolen. Is there any coverage under your insured’s Homeowners Comprehensive policy for this loss? OA) The claim would be paid subject to 10% limit on personal property away from premises and the deductible applicable. OB) No, this type of property is covered only while on the insured’s premises. OC) The loss would only be covered if forcible signs of entry were visible. OD) Payment will be made subject to 10% limit and deductible, if the insured can provide proof of purchase of the stolen items.