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GENERAL INSURANCE LEVEL 2 LICENSE –
ALBERTA ACTUAL EXAM WITH CORRECT
ACTUAL QUESTIONS AND CORRECTLY
WELL DEFINED ANSWERS LATEST 2025
ALREADY GRADED A+
The Insurance Act specifies that an applicant must - ANSWERS-NO be fit and proper
have a good business reputation YES have a reasonable knowledge of the types of insurance he or she will be licensed to sell
All of the above
The following would be considered "business" property damage and therefore excluded under the policy: - ANSWERS-occasional rental of the insured's residence
rental of space in the insured's residence for incidental school occupancy YES rental of four car spaces on the insured's property NO all of the above
Under the General Provisions, Definitions and Exclusions section of the Standard Policy Form (S.P.F. 1), a newly acquired automobile is not covered over - ANSWERS-NO 15 days
21 days 30 days YES All of the above
Explanation: The limit for a newly acquired automobile is 14 days, so 15 days and up is without coverage.
Under Section A - Third Party Liability of the Standard Policy Form (S.P.F. 1), which of the following is NOT an exclusion? - ANSWERS-liability imposed by any workers compensation law
liability arising from contamination of property carried in the automobile YES liability arising from the expenses incurred during an investigation NO liability for injury to an employee engaged in operation or repair of the automobile
Under Coverage E of the Comprehensive Personal Liability (CPL) section of a property insurance policy, the insurer's liability is limited to - ANSWERS-YES the limit stated in the declaration plus any interest and costs
An insurance contract indemnifies the insured against loss arising out of the happening of a specific event.
What conditions of the event must be considered before it can become an insurable loss? - ANSWERS--must be a future event
-must be accidental
-may happen with the cooperation of the insured as some losses are a result of covered but careless behavior
-may happen with the intent of the insured as some losses are a result of covered but intended behavior with unintended results
Statutory Condition 5 provides that when an insurance policy is terminated by the insurer, the insurer shall refund - ANSWERS-the excess of the premium actually paid by the insured over the pro-rata premium for the expired time
NOT JUST the excess of the premium actually paid over the short-rate premium for the expired time because question clearly listed that it is "terminated by the insurer"
If the owner of a building worth $125,000 buys $90,000 of insurance on a policy with an 80% coinsurance clause, and a 4% waiver, then suffers a loss of $ 50,000, his recovery under the policy will be - ANSWERS-$ 45,
$ 42,
STUDY UP ON CO-INSURANCE
The priority of payment of the $200,000 under Third Party Liability in Alberta is distributed to Bodily Injury & Property Damage as follows: - ANSWERS-liability to Bodily Injury $190,000 then liability to Property Damage $10,
-Property is more commonly insured as well by the owner but severe Bodily Injury is not often covered well by individuals
This is to ensure that bodily injury are always provided for first. If the coverage is less than the claim settlement, the first moneys are going to be allocated to bodily injuries.
NOT Bodily Injury $150,000 / Property Damage $50,
Bodily Injury $180,000 / Property Damage $20,
Which groups are the owners of the following company types?
Mutual Companies
Stock (Publicly traded) Companies - ANSWERS-Stock Companies are owned by the shareholders
Mutual companies are owned by the policyholders
Which office is responsible for the administration of the Insurance Act in each province? - ANSWERS-Federal Office of the Superintendent of Insurance
BUT the Federal Office of the Superintendent of Financial Institutions is responsible for the administration of the other common fiduciaries.
statements is FALSE? - ANSWERS-The insurer is responsible for the interest on $3,000,000 from the judgment date
The insurer is responsible for the interest on $2,000,000 from the judgment date
NOT JUST The insurer is responsible for paying the $2,000,000 limit plus the interest on that amount from the judgment date
PAY ATTENTION it asked for FALSE
The insurer is not responsible for paying the interest on any judgment over the $2000,000 policy limit
Under Personal Liability coverage, which of the following losses would be covered? - ANSWERS-The insured, while driving a neighbour's boat, runs into a dock and injures a number of fishermen
The insured, while driving a neighbour's boat as a taxi service, runs into a dock and injures a number of fishermen
The insured, while operating a neighbour's boat as a fishing charter, runs into a dock and injures a person swimming close to the dock
NOT JUST The insured, who takes a neighbour's boat without permission, runs into a dock and injures a person swimming close to the dock PAY ATTENTION it asked for WOULD BE COVERED
Insurance coverage, under the terms of a fire insurance policy, expires at - ANSWERS-NOT 12:01 a.m. Standard Time at the location of the property insured
12:01 a.m. Standard Time at the address of the named insured
Statutory Condition 2, Property of Others, states that, unless otherwise specifically stated in the policy, the insurer is not liable for loss or damage to property - ANSWERS-owned by any person other than the insured, unless the insured's interest is stated
in the care, custody, or control of the insured, unless the insured's interest is stated
owned by the insured, unless the insured's interest is stated NOT JUST In the care, custody, or control of any other person other than the insured's, unless the insured's interest is stated
On the application the applicant must declare any license suspension within the prior - ANSWERS-NOT 3 years
5 years 6 years 2 years
Under Subsection 2 - Part I Death Benefits, death must occur within - ANSWERS- any time after the date of accident
NOT 1 year from the date of accident 2 years from the date of accident 3 years from the date of accident
The doctrine of strict liability for injuries or damages applies to owners of - ANSWERS-wild animals
NOT 90 days
Explanation: Under Section B, it is 30 days. See Special Provisions, Definitions and Exclsusions of Section B on the SPF 1.
Under the rest of the policy (SPF1), it is 90 Days. See Statutory Conditions.
A visitor to the insured's home slips and falls on ice on the front sidewalk, breaking her leg. While in the ambulance on her way to the hospital, the ambulance is struck by a speeding motorist. The visitor suffers a broken arm. Which of the following is TRUE? - ANSWERS-NOT The insured would be held responsible for the broken leg and the broken arm
The insured would be held responsible for the broken leg
If a pedestrian is injured by an uninsured vehicle, they can claim under - ANSWERS-NOT the Motor Vehicle Accident Claims Fund - what's it for?
Section A of their own automobile insurance policy the responsible party's Section B coverage Section B of their own automobile insurance policy
The insured's cat is playing with the electrical cord on their freezer in the basement, and pulls it out of the wall. Three days later, the insured goes into the freezer and finds $500 worth of food is thawed and spoiled. Which of the following is TRUE? - ANSWERS-The cost of putting down the cat is covered
The cost of replacing the food would be covered if the insured discovered the problem within 48 hours of the cat pulling the cord out of the wall
NOT The cost of replacing the food is covered - PAY ATTENTION TO THE PERIL?
The cost of replacing the food is not covered
An agent represents the interests of the - ANSWERS-client
BUT insurer NOT BOTH the client and the insurer none of the above
In addition to the five essential elements required in all contracts, an insurance contract is enforceable only if it contains which three additional elements? - ANSWERS-Indemnity, insurable interest, and utmost good faith
5 Common to Contracts - Legality of Object, Intention, Consideration, Agreement, Legal Capacity of Parties
Generally, the risks people face fall into the following categories: - ANSWERS- BUT personal, property and liability risks
NOT professional, property and liability risks personal, property and hazardous risks calculated, property and liability risks
If the owner of a building worth $ 125,000 buys $ 100,000 of insurance on a policy with a 90% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 20,000, his recovery under the policy will be approximately - ANSWERS-$ 20,
Bankruptcy or insolvency of a policyholder affects the insurer's liability as described in which of the following? - ANSWERS-NOT It requires that any unearned premium is considered fully earned on termination of the policy
It has no bearing on the insurance contract
Which of the following is the Superintendent of Insurance NOT responsible for?
- ANSWERS-Supervising the terms and conditions of insurance contracts
Monitoring financial stability of federally licensed insurers - who does DAT? NOT JUST Licensing of insurers Monitoring financial stability of provincially licensed insurers
A contract is only enforceable when it is proven that the agreement between the parties was not affected by - ANSWERS-fraud, duress, abandonment or mistake
NOT JUST this list - fraud, duress, concealment or trickery fraud, duress, concealment or threats
BUT fraud, duress, concealment or mistake
Under Statutory Condition 9, Salvage, the insured - ANSWERS-NOT can abandon the damaged property to the insurer
NOT must arrange for repair of the damaged property immediately must take all reasonable steps to prevent further loss or damage to the property
A major fire damages an apartment building. The owner of the building loses rental income for four months while the building is being repaired. This type of loss is considered - ANSWERS-NOT a business interruption loss
an indirect loss
The Driver information requested on the application includes - ANSWERS-the Driver information requested on the application includes
NOT names of all drivers and number of years they have been licensed BUT ?? names of all drivers of the insured vehicle and what percentage they use the vehicle
names of all members of the household and how long they have been licensed
Under Subsection 1, Medical Payments and Funeral Expenses, expenses must be incurred within - ANSWERS-2 years from the date of accident
NOT 1 year from the date of accident 2 years from the date of claim 1 year from the date of claim
In respect to the premium charged, the insurer must identify in the policy - ANSWERS-the amount of premium charged and the rate used to determine that amount
NOT only the amount of premium charged only the rate used to determine the amount of premium
The Homeowners Policy provides coverage against freezing of plumbing systems during the normal heating season but only if inhabitants were absent for less than - ANSWERS-YES 96 hours
NO 72 hours 48 hours 24 hours
Quebec and Ontario are the two Canadian provinces with no-fault insurance in Canada - ANSWERS-NO True
YES False
Which of the following subjects are not mentioned in the Statutory Conditions of a property insurance policy? - ANSWERS-NO Change of interest
Fraud YES Inception date Termination of insuranc
The Additional Agreements in Section C of the Standard Policy Form (S.P.F. 1) waives subrogation against every person, who with the insured's consent has care, custody or control of the vehicle - ANSWERS-NO except if involved in a race or speed test
without restriction as long as they are a member of the insured's family
YES none of the above
Under a Homeowners Policy the Optional Loss Settlement clauses can be invoked by - ANSWERS-NO the insurer
the mortgage YES the insured the broker all of the above
Which of the following statements is FALSE with respect to the Personal Effects Floater? - ANSWERS-This is the ideal coverage for tourists and travellers
This coverage may be extend to cover world-wide YES This policy covers artificial teeth or limbs NO This policy does not cover money while the insured is traveling
A Comprehensive Personal Liability policy excludes - ANSWERS-YES liability assumed under any contract
voluntary property damage for the intentional acts of the insured's 11 year old son
voluntary medical payments for the intentional acts of the insured's 11 year old son
NO None of the above
YES all of the above none of the above
Under Coverage E of the Comprehensive Personal Liability (CPL) section of a property insurance policy, property damage to which of the following is covered? - ANSWERS-Property owned by the insured
NO Property occupied by or leased to the insured Property in the care, custody or control of the insured YES Property of a third party negligently damaged by the insured
Under a Comprehensive Personal Liability policy the insured is covered for claims arising out of - ANSWERS-occasional rental of her residence to others
NO employment as a sales representative temporary or part-time business pursuits of an insured person under age 21 YES all of the above
With respect to Section C of the Standard Policy Form (S.P.F. 1), which of the following is FALSE? - ANSWERS-Comprehensive covers all risks subject to exclusions
Specified Perils covers named perils only NO All Perils covers all risks subject to exclusions YES Collision or upset does not apply to vessels plying between the ports of Canada and the U.S.A
Explanation: A, B & C are all correct. D is a double-negative and is wrong.
Comprenshive Automobile policy covers all risks subject to exclusions. Although it does not say "auto" in the question, it does mention Section C -which is about the Auto Policy.
The sponsor of an applicant for an insurance license must - ANSWERS-NO vouch for the applicant's general character
YES train the applicant, recommend him to the Alberta Insurance Council, and forward his fee
contribute to the cost of setting the applicant up in business proctor the agency licensing examination
Under a Basic homeowners policy, if the insured owns a holiday trailer, under what circumstances would she be covered? - ANSWERS-The policy covers the trailer under the 10% extension
If she went on a short holiday for 10 days, the trailer would be covered YES If she went on a short holiday for 10 days and took clothing with her, the clothing would be covered
NO Contents permanently kept in the trailer would be covered under the 10% extension
None of the above
Which of the following is FALSE with respect to a Homeowners Policy? - ANSWERS-YES Vandalism is automatically included in all situations
Vandalism is not covered when the dwelling is under construction
