RIBO Level 1 flashcards

Question 1

What written document must a principal broker keep to show how the brokerage is supervised?

Accepted Answer

A written Plan of Supervision, with procedures the firm follows, so it complies with the applicable laws.

Question 2

A broker quotes auto insurance from an insurer that has affiliated insurers. Which rate must the broker offer?

Accepted Answer

The lowest rate available from that insurer and its affiliates. The same applies at renewal.

Question 3

How long does an insured have to sue the insurer over a claim on a fire policy?

Accepted Answer

One year after the loss or damage occurs. A later action is absolutely barred.

Question 4

How much notice must an insurer give to cancel a fire policy mid-term?

Accepted Answer

15 days by registered mail, or 5 days delivered by hand. Five days also applies by courier with a delivery record, or electronically with consent.

Question 5

When does the 15 days of an insurer's registered mail cancellation notice start to run?

Accepted Answer

The day after it reaches the post office it is addressed to.

Question 6

What warning must a fire policy with a deductible or co-insurance clause carry on its face?

Accepted Answer

A red or bold notice that a clause may limit payment. Without it, the clause does not bind the insured.

Question 7

Two fire policies cover the same property interest when a loss happens. How much does each insurer pay?

Accepted Answer

Its rateable proportion of the loss. The insurers may agree otherwise, but only in writing.

Question 8

Which insurance may a registered travel agent sell without being a registered broker?

Accepted Answer

Travel accident and sickness, baggage and trip cancellation insurance. The exception reaches only those kinds.

Question 9

A friend borrows a car with the owner's consent and injures someone by careless driving on a highway. Is the owner liable?

Accepted Answer

Yes. The owner is liable for negligent driving on a highway unless someone had the car without consent.

Question 10

One injury is caused by two careless people. How much of the judgment can be collected from either?

Accepted Answer

All of it. Both are jointly and severally liable to the injured person.

Question 11

What standard is a broker's quality of service measured against?

Accepted Answer

At least the service brokers would generally expect in a like situation.

Question 12

How long does a broker have to deposit trust money received from a client?

Accepted Answer

Three banking days after the day it is received.

Question 13

What minimum errors and omissions (E&O) insurance must a brokerage carry?

Accepted Answer

At least $3,000,000 for any one occurrence.

Question 14

What is the highest fine for misconduct against an individual broker?

Accepted Answer

$25,000. The $100,000 maximum applies only to a member that is not an individual.

Question 15

Within how many days of placing insurance must a broker give the client a policy or certificate?

Accepted Answer

Twenty-one days. The document must certify that the insurance has been placed.

Question 16

Which causes of freezer food spoilage does a home policy pay for?

Accepted Answer

A breakdown of the freezer's cooling equipment, or a power cut. The freezer must be at the principal residence.

Question 17

How is damage to a condominium owner's improvements paid if repaired within a reasonable time with similar materials?

Accepted Answer

Repair or replacement cost, whichever is less, with no depreciation. Left unrepaired past a reasonable time, it is paid at actual cash value.

Question 18

A fire damages a condominium unit, and the condominium corporation's insurance is inadequate. Which endorsement on the owner's policy covers the unit?

Accepted Answer

Contingent protection, where the owner bought it. It covers the unit but not the owner's improvements and betterments.

Question 19

Is a boat with a 14 HP outboard motor covered by a home policy's liability section?

Accepted Answer

Yes. Liability covers owned boats with outboard motors of up to 25 HP in total.

Question 20

Is earthquake damage insured under a standard home policy?

Accepted Answer

No, but it can be bought as additional coverage. A fire or explosion an earthquake causes is covered.

Question 21

What is actual cash value on a home policy?

Accepted Answer

Replacement cost less depreciation. Depreciation weighs condition before the damage, resale value and normal life expectancy.

Question 22

What does replacement cost pay on a home policy?

Accepted Answer

The cheaper of repair or replacement with similar new property, no depreciation. The amount of insurance still caps it.

Question 23

What does a sewer backup endorsement on a home policy insure?

Accepted Answer

Sudden, accidental backup of water or sewage from sewers, drains or sumps. Septic systems, weeping tiles and sewer-connected eavestroughs count too.

Question 24

A worker is hurt on the job in a crash another driver caused. What choice does the worker have?

Accepted Answer

Claim workplace benefits or sue the person at fault. The worker must elect one and notify the Board.

Question 25

Who can get auto insurance through the Facility Association?

Accepted Answer

Owners, lessees and licensed drivers who could not otherwise get auto insurance. Its Plan of Operation provides them a contract.

Question 26

What is the minimum liability limit on an Ontario auto policy?

Accepted Answer

$200,000 per accident, not counting interest and costs. It covers injury and property damage together.

Question 27

Up to what amount do injury claims rank ahead of property claims under the $200,000 minimum limit?

Accepted Answer

$190,000. Injury and death claims have priority over property claims up to that amount.

Question 28

When direct compensation applies, whom can an insured sue for damage to their own car?

Accepted Answer

Only their own insurer. They cannot sue anyone else involved in the accident.

Question 29

Car A, turning left at an intersection, collides with car B overtaking it to pass. How is fault split?

Accepted Answer

A is 25 percent at fault and B is 75 percent.

Question 30

A car is hit from behind by a car travelling the same way in the same lane. How is fault split?

Accepted Answer

The rear car is 100 percent at fault. This holds whether the front car was stopped or moving forward.

Question 31

When does direct compensation property damage (DCPD) coverage apply?

Accepted Answer

Only for an Ontario accident involving at least one other insured automobile.

Question 32

How is the direct compensation deductible set when the insured is partly at fault?

Accepted Answer

The certificate deductible times the insured's percentage not at fault.

Question 33

What disability test does the non-earner benefit use?

Accepted Answer

A complete inability to carry on a normal life within 104 weeks. It is optional for policies issued or renewed on or after July 1, 2026.

Question 34

What are the medical, rehabilitation and attendant care limits outside the minor injury limit?

Accepted Answer

$65,000 plus HST per accident, or $1,000,000 plus HST if catastrophic. Both still apply after the July 1, 2026 reform.

Question 35

A building worth $450,000 is insured for $240,000 with an 80% co-insurance clause and no deductible. What is paid on a $90,000 fire loss?

Accepted Answer

$60,000. Only $240,000 of the $360,000 required is carried, so two thirds of the loss is paid.

Question 36

A customer slips and is hurt in a client's restaurant, then sues. Which policy responds?

Accepted Answer

Commercial general liability (CGL). It pays damages the business is legally obliged to pay for bodily injury.

Question 37

Which cover protects a business against loss from an employee's dishonesty?

Accepted Answer

A comprehensive dishonesty, disappearance and destruction (3-D) rider. Its employee dishonesty cover pays for loss from an employee's fraudulent or dishonest acts.

Question 38

Which insurance pays a business its lost income after a fire damages its building and stock?

Accepted Answer

Business interruption insurance. It pays lost profits and continuing fixed expenses while an insured peril stops normal operations.

Question 39

What can a co-insurance clause do to the amount paid on a loss?

Accepted Answer

It may reduce it. An insured who carries less than the amount the clause requires pays part of the loss.

Question 40

Which businesses' staff does the garage policy (OAP 4) exclude as other garages' personnel?

Accepted Answer

Businesses that sell, repair, maintain, service, store or park automobiles. A taxi stand does none of these.

Question 41

An accounting firm fears a hack that exposes its clients' personal data. Which policy should its broker sell?

Accepted Answer

Cyber liability insurance. It covers security incidents, including claims over a breach of personal information.

Question 42

How many automobiles must a group hold before it can be a fleet?

Accepted Answer

At least five commercial, public or business-use automobiles.

Question 43

What must be true of a condition for OHIP to pay for out-patient care abroad?

Accepted Answer

Acute and unexpected, arising outside Canada, and needing immediate treatment. All three must hold.

Question 44

Does OHIP pay to move a traveller from a hospital abroad to an Ontario hospital?

Accepted Answer

No. Without travel medical insurance that covers transportation, the traveller pays for the transfer.

Question 45

A client is unsure how to answer a question on a travel medical application. What should you tell them?

Accepted Answer

Ask the insurer and get its answer in writing. Every answer must be accurate and complete.