Download OTL Practice Exam B: Auto Insurance Coverage in Canada and more Exams Insurance law in PDF only on Docsity!
OTL Practice Exam B Questions and
Answers Already Passed
Coverage's available under auto policies across Canada include
a. Uninsured Motorist Coverage, Accident Benefits and Loss of or Damage to Insured Auto
b. Accident Benefits and collision
c. Third Party Liability, Accident Benefits and Loss of or Damage to Insured Auto
d. All of the above โโd. All of the above
Which statement is FALSE?
a. A newly acquired auto is automatically insured for a specified period of time if it replaces another insured vehicle of similar type
b. It is possible to insure more than one vehicle on the same policy
c. An auto with a trailer attached is considered as one vehicle for the purposes of Accident Benefits limits
d. No coverage applies to temporary substitute vehicles โโd. No coverage applies to temporary substitute vehicles
The following damage is included under all perils coverage:
a. Vandalism of a vehicle
b. Rusting of the vehicle body
c. Radioactive contamination
d. Damage caused to the vehicle while the driver was under the influence of drugs โโa. Vandalism of a vehicle
Accident benefits do not pay any expenses, arising out of an auto accident for:
a. Vehicle damage
b. Loss of wages
c. Dental work
d. Funerals โโa. Vehicle damage
Which of the following is not covered under the specified perils section
d. Termination by the insured is subject to a return premium on a pro-rate basis โโb. Termination by the insurer can be achieved by giving notice by 15 days registered mail
After being involved in an accident where injuries occurred, an insured must:
a. Contact a lawyer immediately
b. Comply with all requirements found in the policy
c. Try to settle amicably with the injured parties
d. Not do anything until he knows if there will be a claim โโb. Comply with all requirements found in the policy
A deductible usually applies to
a. Fire damage
b. Lightning damage
c. Theft of the entire vehicle.
d. Answers A & B โโc. Theft of the entire vehicle.
Automobile insurance in Canada contains certain no-fault elements. Which coverage presently available in all provinces and territories has some no-fault features?
a. Physical damage
b. Uninsured motorist
c. Third party liability
d. Accident benefits โโd. Accident benefits
The Owner's policy of insurance coverage on a specific automobile is
a. Excess coverage
b. Primary coverage
c. Secondary coverage
d. Optional coverage โโb. Primary coverage
When an insured's vehicle is damaged in an accident, the insured must do certain things. One of these is:
a. Protect the vehicle from further damage
d. Who has misplaced his driver's license โโd. Who has misplaced his driver's license
Which of these policy sections includes coverage for vehicle damage resulting from upset?
a. Collision
b. Comprehensive
c. Specified perils
d. All of the above โโa. Collision
The Family Protection Endorsement
a. Provides coverage similar to that found under Accident Benefits
b. Replaces Highway Victim's Indemnity Funds in certain provinces
c. Gives the insured the same amount of protection if injured by a negligent motorist who has only minimum limits of coverage, as the insured's own policy would
d. Provides medical protection for all family members injured in non-motor accidents โโc. Gives the insured the same amount of protection if injured by a negligent motorist who has only minimum limits of coverage, as the insured's own policy would
The insured accidentally collided with a guardrail causing severe damage to his vehicle. Damage to the vehicle would be a ______________ claim.
a. Third Party Liability
b. Collision
c. Specified perils
d. Comprehensive โโb. Collision
Under an auto policy, on receipt of a proof of loss, the insurer:
a. Must pay the loss within a year
b. Must negotiate settlement
c. Must pay the loss within ninety days
d. Must begin to pay the settlement within 60 days โโd. Must begin to pay the settlement within 60 days
a. Death
b. Dismemberment and lost of sight
c. Death, permanent serious disfigurement or permanent serious impairment of an important physical, mental or psychological function
d. Permanent serious disfigurement, death or permanent serious impairment of an important bodily function which is caused by continuing which is psychological in โโc. Death, permanent serious disfigurement or permanent serious impairment of an important physical, mental or psychological function
Which of the following statement is NOT TRUE.
a. Not all drivers of recreational vehicles must be licensed
b. Recreational vehicles are permitted to cross railway tracks
c. Persons under the legal driving age may operate recreational vehicles.
d. Coverage is not excluded by endorsement if an ATV is used in the water. โโd. Coverage is not excluded by endorsement if an ATV is used in the water.
Which of the following payments would be an example of indemnification?
a. A payment under a Homeowner's policy for damage to a dwelling
b. An Unemployment Insurance Benefit payment
c. A death claim under a Life Insurance policy
d. A payment for the loss of a limb or an eye under a Personal Accident policy โโa. A payment under a Homeowner's policy for damage to a dwelling
Common Law is:
a. Based on old English laws which applies to the "common people"
b. The law which regulates matrimonial relationships within and outside of marriage
c. Sometimes referred to as Case law
d. The only type of law which applies to the so called "common law" โโc. Sometimes referred to as Case law
Insurable interest is:
a. The monetary interest a person might have in the happening of a loss
b. The interest an insurance company earns on its investments
c. The interest a life insurance company pays on certain types of life policies
In the Common law provinces and the territories, Statutory conditions are NOT required for:
a. Life insurance policies
b. Automobile insurance policies
c. Fire insurance policies
d. Accident and sickness insurance policies โโa. Life insurance policies
The Actual Cash Value of an article is best defined as the:
a. Market value
b. Replacement value
c. Salvage value
d. Fair value โโa. Market value
Misrepresentation
a. Is the same as non-disclosure
b. Is a breach of warranty
c. Will automatically void a policy
d. Is an incorrect statement about a material fact โโd. Is an incorrect statement about a material fact
In the insurance business, a "retention" is:
a. The amount of the deductible to be paid by the insured
b. The amount of insurance which the insurer may decide to keep for its own account
c. The part of the insurance which the insurer may pass on to a re-insurer either under a Treaty or facultative reinsurance
d. The maximum amount of insurance the insurer can cover under any one policy โโb. The amount of insurance which the insurer may decide to keep for its own account
There is no insurable interest when:
a. A mortgage company has a financial interest in a property
d. Keep any part of the commission when a policy is cancelled mid-term โโb. Rebate premium
A special kind of condition which is a promise that something will or will not be done is an:
a. Insuring agreement
b. Insurable interest
c. Policy exclusion
d. Warranty โโd. Warranty
When a loss occurs
a. The agent of the insured must give notice
b. Only the insured can legally give notice
c. Any person to whom any part of the insurance money is payable may give notice
d. The insurance agent and the agent of the insured are the same โโc. Any person to whom any part of the insurance money is payable may give notice
In Quebec
a. The exact wording of the General Conditions is set out by legislation
b. General conditions do not apply to Auto Insurance
c. Only the subject matter of the General Conditions is specified by legislation
d. All of the above are false โโc. Only the subject matter of the General Conditions is specified by legislation
A proof of loss
a. May be orally given
b. Details a loss and the resulting claim
c. Has no time limit in which it must be submitted
d. Must be prepared by a lawyer โโb. Details a loss and the resulting claim
A tort-feasor is a
a. Claimant
b. Wrongdoer
A Stock Insurance company is owned
a. By its directors
b. By the participating policyholders
c. By its bondholders
d. By its shareholders โโd. By its shareholders
Lloyds of London is
a. A syndicate of insurance companies
b. An unlimited liability company
c. A group of individual underwriters
d. A major insurance brokerage โโc. A group of individual underwriters
Pure Premium is
a. The total premium required by the insurance company
b. The premium required to pay the losses that have occurred
c. The premium required to pay for the anticipated losses
d. The rate or unit of a premium required โโc. The premium required to pay for the anticipated losses
When a reinsurer wishes to reduce its own liability on a risk, it does so by arranging a
a. Cession
b. Treaty
c. Concession
d. Retrocession โโd. Retrocession
Which of the following would not be a legal entity?
a. Slim Jim's Insurance Brokers
b. James Slim
c. Slim Jim's Insurance Brokers Ltd.
d. James Slim operating as Slim Jim's Insurance Brokers โโa. Slim Jim's Insurance Brokers
