All five sections, shuffled

All 84 free questions in this run

1. Your client's courier van rear-ends a car during a delivery, and the other driver sues. Which of your client's policies responds?

   • A The commercial general liability policy. The liability policy excludes injury and damage from the use of an automobile the insured owns.
   • B Both policies, sharing the loss by their limits. The liability policy has excluded the loss, so there is nothing to share.
   • C The automobile policy. Correct
   • D The commercial general liability policy, as excess over the automobile policy. The automobile exclusion takes the claim out of the liability policy altogether, so there is nothing left for it to pay as excess.

   Coverage A of the commercial general liability policy excludes bodily injury and property damage that comes from owning, maintaining, using or entrusting an automobile the insured owns, operates, rents or borrows, whatever other cause contributes. The courier's claim therefore goes to its automobile policy.

   Commercial General Liability C574, Section I, Coverage A, exclusion 2.f Reference document, not law.

2. Who does the Facility Association exist to insure?

   • A Clients of a member insurer that has become insolvent. Paying claims after an insurer's insolvency is not what the Plan does; the Plan places risks that cannot find a market.
   • B Owners, lessees and licensed drivers who could not otherwise get automobile insurance. Correct
   • C Drivers charged more than a maximum rate the Association sets. The Plan does not fix rates for member insurers, and approval of rates sits with the regulator.
   • D Member insurers facing catastrophic claims. A risk sharing pool and a catastrophic claims fund may be included in the Plan, but neither is what the Plan itself is.

   The Compulsory Automobile Insurance Act requires the Facility Association to set out in its articles of association a Plan of Operation providing a contract of automobile insurance to owners, lessees and licensed drivers who could not otherwise obtain one, which is what makes it the market of last resort.

   CAIA, s. 7 (3)

3. What disability test must your insured meet for a non-earner benefit when she was not working at the time of a car accident and does not qualify for income replacement?

   • A A complete inability to carry on a normal life. Correct
   • B A substantial inability to carry on a normal life. The word in the test is complete rather than substantial, and substantial inability belongs to other benefits in the Schedule.
   • C A substantial inability to do the essential tasks of her job. A substantial inability to perform the essential tasks of employment is the income replacement benefit test.
   • D Unemployment at the time of the accident, with no medical test. Being unemployed is not the test, and paragraph 2 gives a separate route for students and recent graduates.

   The non-earner benefit turns on a complete inability to carry on a normal life arising as a result of and within 104 weeks after the accident, in a person who does not qualify for an income replacement benefit. For policies issued or renewed on or after July 1, 2026 it is one of the optional benefits every insurer must offer.

   SABS, s. 12 (1)

4. A client who signed OPCF 16 and took a refund for a stored car drives it two blocks to a service appointment. What is the effect of that trip?

   • A None; OPCF 16 suspends only the optional loss or damage coverages. The form also cancels Liability, Accident Benefits, Uninsured Automobile and Direct Compensation coverage for use or operation of the automobile, so it is not road legal during the suspension.
   • B None; a single trip for maintenance counts as continued storage. The undertaking is that the automobile is continuously out of use, and the form allows no maintenance exception.
   • C The refund is reduced for each day the car is driven. The form provides for a refund and for no refund below 45 consecutive days of suspension; it does not prorate a refund against days driven.
   • D The client has broken the agreement to keep the car out of use. Correct

   OPCF 16 buys the refund with a promise from the insured: from the effective date of the change the described automobile is continuously taken out of use and not operated, so driving it at all, even once and even briefly, is a breach of what the client agreed to.

   OPCF 16, Section 2.1

5. Your insured asks when a coverage applies to her car under the Ontario Automobile Policy (OAP 1). Which statement is TRUE?

   • A It applies once she receives the policy booklet that describes it. The policy wording describes coverages generally, but the policy states that you only have a particular coverage for a specific automobile if the Certificate shows a premium or no-cost entry for it.
   • B It applies where her Certificate shows a premium or no cost for it. Correct
   • C It applies once she has asked for it in the signed application. The signed application is one of the three documents making up the contract, but a request in the application does not by itself turn a coverage on for an automobile.
   • D It applies unless the insurer has issued the policy excluding it. Optional coverages are granted by being shown on the Certificate, not by the absence of an exclusion in the policy.

   Section 1.1 of the Ontario Automobile Policy OAP 1 makes the Certificate of Automobile Insurance the document that switches a coverage on, so a coverage exists for an automobile only where the Certificate shows a premium for it or shows it at no cost.

   OAP 1, Section 1.1

6. Your insured is rear-ended at a red light. The other driver admits fault, and your insured is not hurt and has not decided whether to claim. What does his Ontario Automobile Policy (OAP 1) require?

   • A Report it to his agent, broker or insurer within seven days. Correct
   • B Report it to his agent, broker or insurer within 24 hours. Twenty-four hours is not the OAP 1 period; the policy states the report is due within seven days.
   • C Report it only if he decides to claim under his own policy. The duty applies regardless of who is at fault and does not depend on the insured deciding to claim.
   • D Report it to his agent, broker or insurer within 30 days. Thirty days is the period for returning a completed Accident Benefits application, not the accident reporting period.

   Section 1.4.4 of the Ontario Automobile Policy OAP 1 sets a seven day reporting duty for any accident involving injury or property damage and says it applies regardless of who is at fault, so a not-at-fault insured still has to report.

   OAP 1, Section 1.4.4

7. Wanda drives from Ontario into a United States state where the required minimum liability limit is higher than the $500,000 limit on her Certificate, and she causes an accident there. What does her OAP 1 policy pay?

   • A The insurer honours the higher minimum limit required in that jurisdiction. Correct
   • B The insurer pays the $500,000 limit and Wanda is personally responsible for the difference. The insurer honours the higher amount itself, so the shortfall does not fall on the insured.
   • C The insurer pays no more than the $500,000 limit shown on the Certificate. The section exists precisely to lift the payment above the Certificate limit where the local minimum is higher.
   • D The policy does not respond at all without an endorsement for that state. The United States is inside the territory the policy already covers, so no endorsement is needed for the policy to respond.

   Section 3.3.3 of the Ontario Automobile Policy OAP 1 says that where an incident happens in a covered jurisdiction whose required minimum liability limit is higher than the limit on the Certificate, the insurer honours the higher amount, so the Ontario limit does not cap the payment.

   OAP 1, Section 3.3.3

8. Which statement is TRUE about the contingent coverage on a condominium unit owner's policy?

   • A It responds only where the corporation holds no policy at all. Holding a policy is not the test; inadequacy is named as a trigger in its own right.
   • B It insures the owner's improvements rather than the unit. The endorsement insures the unit and expressly leaves out the owner's improvements and betterments, which are covered elsewhere.
   • C It responds where the corporation's insurance is inadequate. Correct
   • D It responds only once the corporation's directors are sued. Nothing in the endorsement makes it conditional on an action against the corporation or its directors.

   Contingent coverage has three separate triggers, no insurance, inadequate insurance, and insurance not in effect, so a corporation that is insured on paper but short of the rebuilding cost still opens the endorsement.

9. Ali takes delivery of a second car and calls his broker 22 days later to add it. His insurer covers every car he owns. How long did he have to tell the insurer?

   • A No limit while every car he owns is with that insurer. Insuring all owned automobiles is one condition for covering an additional automobile, but it does not remove the separate 14 day notice requirement.
   • B 30 days from delivery. Thirty days is not the newly acquired automobile period; the policy fixes it at 14 days from the time of delivery.
   • C No limit for an added car, only for a replacement car. The 14 day notice applies to both replacement and additional automobiles, and a replacement simply takes the coverage of the automobile it replaces.
   • D 14 days from delivery. Correct

   Section 2.2.1 of the Ontario Automobile Policy OAP 1 insures a newly acquired automobile only if the insured tells the insurer within 14 days of delivery and pays any additional premium, and Ali reported on day 22, so the extension had already run out.

   OAP 1, Section 2.2.1

10. Your insured carries less insurance than the co-insurance clause requires and suffers a total loss. What effect does the clause have on the claim?

    • A It cuts the payment in proportion to the shortfall. A cut in proportion to the shortfall is how the clause works on a partial loss; on a total loss the amount of insurance is already the ceiling.
    • B It leaves the payment at the amount of insurance. Correct
    • C It voids the policy for carrying too little insurance. The fact sheet describes the clause as changing the compensation paid, not as ending the contract.
    • D It doubles the deductible that applies to the claim. The fact sheet's formula takes the deductible off the damages as the contract sets it; nothing in the clause multiplies it.

    When the whole property is lost, the most the insurer pays is the amount of insurance carried, so the payment is that amount and the clause has nothing more to take away. Its proportional cut works on a partial loss, which is why the fact sheet advises insuring to the full value, or to the replacement cost where the contract settles on that basis.

11. Which statement about the statutory conditions in a home policy is TRUE?

    • A A change the insurer makes to one of them does not bind the insured. Correct
    • B Accepting the policy binds the insured to any change printed in it. Acceptance of the policy changes nothing; the subsection says "no variation or omission of or addition to any statutory condition is binding on the insured".
    • C A change binds both parties once the insurer files it with the regulator. Section 148 (1) sets no filing route that would make a variation binding on the insured; the conditions are deemed part of every contract in force in Ontario.
    • D Any change to one of them voids the whole policy. The consequence in the subsection is that the variation does not bind the insured, not that the contract fails; the statutory condition simply applies in its statutory form.

    Section 148 (1) deems the statutory conditions to be part of every contract in force in Ontario and requires them to be printed in the policy, then states that no variation, omission or addition binds the insured, so the cut-back wording simply fails against the insured while the rest of the policy stands.

    Insurance Act, s. 148 (1)

12. What does OPCF 43 change about the way a loss or damage claim on the described automobile is settled?

    • A It removes the insurer's right to deduct depreciation from the value of the automobile. Correct
    • B It removes the deductible shown on the Certificate of Automobile Insurance for that automobile. The coverage under OPCF 43 stays subject to the deductible shown on the Certificate of Automobile Insurance.
    • C It fixes the value of the automobile at the figure written on the change form. Agreeing a value for a listed automobile is what OPCF 19A does; OPCF 43 leaves valuation with the insurer and strips out the depreciation step.
    • D It pays the cost of a replacement automobile without regard to the original purchase price. The most payable is the lowest of three amounts, one of which is the actual purchase price, so the purchase price is very much in play.

    OPCF 43 takes away the insurer's right under the policy's what we will pay rule to deduct depreciation from the value of the automobile, so the settlement is worked out without that reduction while the deductible on the Certificate still applies.

    OPCF 43, Section 1

13. Your insured's home policy shows a bank as mortgagee, with loss payable to it. The insurer cancels for non-payment, sends notice only to your insured, and the house then burns. Which statement is TRUE?

    • A The policy could not be cancelled against the bank without notice to the bank. Correct
    • B Notice to your insured was enough. The section applies exactly where loss is payable to "a person other than the insured", and it requires notice "to that person", not only to the insured.
    • C The bank was owed twice the notice given to your insured. Section 147 (2) sets the notice at "the same as notice of cancellation to the insured under the statutory conditions", not double it.
    • D The bank's interest ended when the premium went unpaid. Nothing in section 147 ends the payee's protection on non-payment; the protection is triggered by the insurer cancelling or altering the policy, whatever the reason.

    Section 147 (1) bars an insurer from cancelling or altering the policy to the prejudice of a consented loss payee without notice to that person, and section 147 (2) makes the length and manner of that notice the same as notice of cancellation to the insured, so the bank had to be told separately.

    Insurance Act, s. 147 (1)

14. May a Level 1 licensee act as supervising broker for an unlicensed trainee while the principal broker is away for two weeks?

    • A Yes, for up to 30 days while the principal broker is away. Section 3.3(b) sets a flat bar with no temporary or absence based exception.
    • B Yes, for unlicensed staff, though not for another licensee. The bar is on holding the role at all, and it does not turn on who is being supervised.
    • C No, a Level 1 licensee may not act as a supervising broker. Correct
    • D Yes, once the Level 1 licensee has held registration for 24 months. The 24 month period belongs to section 3.5(a)(i) as a route to Level 3 registration, not as a way for a Level 1 licensee to take a supervisory appointment.

    Section 3.3 of By-Law No. 3 has a Level 1 licensee act under the supervision of a principal broker and while employed or sponsored by an active firm, and it bars that licensee from the principal broker, deputy principal broker and supervising broker roles, so the plan cannot go ahead.

    By-Law No. 3, s. 3.3(a), (b)

15. Your insured leaves a bedroom window open and a thunderstorm drives rain in, soaking the carpet. On a named perils form, which statement is TRUE?

    • A The windstorm peril responds whenever wind carries the rain in. The clause turns on whether the storm made the opening, not on whether wind carried the rain.
    • B The windstorm peril responds only where the storm makes an opening. Correct
    • C The windstorm peril responds to any rain that comes with the wind. Coincidental rain damage is named in the exclusion, and it comes back only where a storm created opening exists.
    • D Rain damage is never insured by a home policy. Rain entering through a storm created opening is insured under this very peril, so rain damage is not always outside the form.

    The windstorm or hail peril does not reach personal property or the interior of a building damaged by wind, hail or coincidental rain unless the storm has first created an opening, and a window the client left open is not a storm created opening.

16. What does OPCF 28 do while a named person is driving the described automobile?

    • A It excludes all coverage apart from certain Accident Benefits while that person is driving. Excluding coverage for a named person is the work of OPCF 28A; OPCF 28 reduces what is provided rather than removing it.
    • B It reduces the coverages, limits and amounts for Liability and Loss or Damage shown on the Certificate. Correct
    • C It moves the Liability coverage onto the named person's own policy for the duration of the trip. The form changes what this policy provides while the named person drives and does not shift the risk to another contract.
    • D It suspends the policy for the described automobile until the named person stops driving it. Suspension of the coverages on a described automobile is done by OPCF 16 and depends on the automobile being taken out of use.

    OPCF 28 keeps the named person insured but on reduced terms, because while that person drives, the Liability and Loss or Damage coverages, limits and amounts shown on the Certificate drop to the figures written on the change form.

    OPCF 28, Section 1

17. Which principle of the Registered Insurance Brokers of Ontario (RIBO) Code of Conduct applies when a broker spots a rating credit that the client does not qualify for?

    • A Keep all information about the client's affairs in strict confidence. Paragraph 5 governs confidentiality of client information, which is not what the mispriced credit raises.
    • B Be competent to perform the services taken on for the client. Paragraph 2 is about competence in performing services for the client and says nothing about the broker's dealings with the insurer.
    • C Act with integrity toward insurers as well as toward clients. Correct
    • D Make the broker's services available to the public efficiently. Paragraph 10 addresses how a member makes services available to the public, not honesty toward an insurer.

    The first principle of the code of conduct in section 14 of Regulation 991 requires integrity toward insurers as well as toward clients, members of the public and fellow members, so the broker cannot quietly accept a credit the client has not earned.

    O. Reg. 991, s. 14, para. 1

18. Your insured borrows a neighbour's pressure washer, and a fire in his garage destroys it. What decides the neighbour's claim under his home liability coverage?

    • A His legal responsibility to the neighbour, which it covers. Legal responsibility is what makes it a liability claim, and the care, custody or control exclusion is what removes it anyway.
    • B Tenants legal liability, with the washer in his control. Tenants legal liability is written for premises owned by others and their contents, which is not a tool the client borrowed and took home.
    • C The exclusion for property in his care, custody or control. Correct
    • D The rule that liability coverage never pays for property damage. Coverage E pays for property damage generally; it is this particular class of property that the exclusion removes.

    The liability part excludes damage to property the insured uses, occupies or leases or has in their care, custody or control, and the only way back in is tenants legal liability, which covers premises owned by others and their contents rather than a borrowed machine.

19. Which statement about a broker's duty to disclose an insurer's volume bonus to a client is TRUE?

    • A A verbal disclosure with a note on the file is enough. The paragraph says the member 'shall disclose in writing', and a file note is a record for the brokerage rather than a disclosure to the client.
    • B The disclosure must be in writing. Correct
    • C The broker may not place business with that insurer. The rule is a disclosure obligation, not a prohibition on placing business with the insurer concerned.
    • D A potential conflict needs no disclosure. Paragraph 7.1 reaches 'any conflict of interest or potential conflict of interest', so a potential conflict is squarely covered.

    Paragraph 7.1 of the code of conduct in section 14 of Regulation 991 requires written disclosure to a client or prospective client of any conflict or potential conflict associated with a transaction or recommendation, so telling the client on the phone and noting the file falls short.

    O. Reg. 991, s. 14, para. 7.1

20. What should a broker do when a woman calling herself a client's wife asks for his policy limits and claims history?

    • A Give her the details. Paragraph 5 keys the release to the client's authorization, not to a relationship or an interest the caller claims.
    • B Give her the details once she states his date of birth and policy number. Identifying details are not one of the three exceptions listed in paragraph 5, so answering the questions correctly does not authorize disclosure.
    • C Give her the limits but not the claims history. The paragraph covers 'all information acquired in the course of the professional relationship concerning the business and affairs of the member's client', which takes in coverage limits.
    • D Decline to give her any of the details. Correct

    Paragraph 5 of the code of conduct in section 14 of Regulation 991 holds all information about a client's business and affairs in strict confidence and lets a member divulge it only where the client authorizes it, the law requires it, or negotiating with underwriters or insurers for the client requires it, so this caller gets nothing because none of the three exceptions applies.

    O. Reg. 991, s. 14, para. 5

21. Which accident benefits must every insurer offer as optional coverage on policies issued or renewed on or after July 1, 2026?

    • A The income replacement benefit, the non-earner benefit and the caregiver benefit. Correct
    • B The death benefit, the funeral benefit and the caregiver benefit. The death and funeral benefits are made optional by section 25.1, not by section 4.1, and the caregiver benefit does not sit with them.
    • C The income replacement benefit only, with the non-earner and caregiver benefits still standard. All three Part II weekly benefits became optional together, so the non-earner and caregiver benefits are not left as standard entitlements.
    • D The medical benefit, the rehabilitation benefit and the attendant care benefit. Medical, rehabilitation and attendant care benefits sit in Part III and remain standard benefits rather than optional ones.

    Section 4.1 of the Statutory Accident Benefits Schedule (SABS) requires every insurer to offer an income replacement benefit, a non-earner benefit and a caregiver benefit as optional benefits, so from July 1, 2026 those three are bought rather than included automatically.

    SABS, s. 4.1 (1)

22. After a covered loss, what must your insured do besides giving the insurer written notice right away?

    • A Deliver a proof of loss as soon as practicable, sworn by statutory declaration. Correct
    • B Phone the broker within 24 hours and confirm the details verbally. A verbal call satisfies neither obligation: clause (a) requires notice "in writing" and clause (b) requires a proof of loss "verified by a statutory declaration".
    • C Get two independent repair estimates before the insurer attends the site. Statutory condition 6 requires an inventory and particulars from the insured, not independent repair estimates gathered before the insurer attends.
    • D File the proof of loss with the court within 60 days of the loss. The proof of loss is delivered to the insurer, not filed with a court; the sixty day period in statutory condition 12 is the insurer's time to pay after the proof is complete.

    Statutory condition 6 (1) sets two separate obligations after a loss: notice in writing forthwith under clause (a), and delivery of a proof of loss verified by a statutory declaration as soon as practicable under clause (b), so a sworn document is required on top of the notice.

    Insurance Act, s. 148, Statutory Condition 6 (1) (Requirements After Loss)

23. According to the Personal Information Protection and Electronic Documents Act (PIPEDA), when should a brokerage generally seek express rather than implied consent?

    • A When the individual is a commercial client rather than a personal lines client. The clause draws no line between commercial and personal clients; clause 4.3.4 makes sensitivity depend on the information and its context.
    • B When the information will be kept for longer than one year. Retention periods are dealt with under the limiting retention principle, and clause 4.3.6 ties the form of consent to sensitivity.
    • C When the information is collected from a third party rather than the individual. Clause 4.3.6 turns on sensitivity, not on the source the information came from.
    • D When the information is likely to be considered sensitive. Correct

    Clause 4.3.6 of Schedule 1 to PIPEDA states that an organization should generally seek express consent when the information is likely to be considered sensitive, and that implied consent would generally be appropriate when the information is less sensitive.

    PIPEDA, Schedule 1, cl. 4.3.6

24. What is a peril in insurance terms?

    • A A chance event, unexpected and accidental from the policyholder's point of view. Correct
    • B The damage that property suffers when a loss happens. The damage is the result; the peril is what caused it, which is why a policy lists causes rather than kinds of damage.
    • C Any event the policy names, whether or not it could be foreseen. Being named in the policy is how a named perils form works, but the definition of a peril turns on the event being unexpected and accidental.
    • D The financial consequence the policyholder bears after a loss. The financial consequence is the loss the policy measures, not the peril that produced it.

    A peril is the cause of loss rather than the damage, and the requirement that it be unexpected and accidental is the fortuity principle, which is why shingles wearing out or a fence rotting is not an insured peril.

25. Which coverage adds water that runs overland into a basement?

    • A The comprehensive water endorsement. Correct
    • B The sewer back-up endorsement. The wording carries them as different endorsements with different grants, so one does not stand in for the other.
    • C The sewer back-up endorsement, for a sudden rapid thaw. Suddenness is a condition inside the grants, not a way of reading overland water into a sewer back-up form.
    • D It cannot be insured on a home policy. The comprehensive water endorsement insures exactly this exposure, subject to its own conditions and exclusions.

    The two forms are separate purchases, so the sewer back-up form answers backing up within the dwelling and the comprehensive water form is the one that adds water accumulating on usually dry land from an unusual and rapid accumulation or runoff.

26. What does the basic, or named perils, level of home coverage provide?

    • A Cover for the building only, with contents insured separately. The level describes how causes of loss are covered, not which property the policy reaches.
    • B Cover only for the perils the policy specifically states. Correct
    • C Cover for all risks except those specifically excluded. All risks except those specifically excluded is the comprehensive level.
    • D Cover for a property that falls short of normal insurance standards. Properties short of normal insurance standards are the no frills level, which is a separate item on the list.

    Basic and named perils are the same level under two names, so the insured has to bring the loss inside one of the perils the policy states rather than pointing at the absence of an exclusion.

27. What does a comprehensive homeowners form cover?

    • A The building and its contents for all risks except those excluded. Correct
    • B The building and its contents for the listed perils only. Insuring only the listed perils is the basic or named perils level, one tier down.
    • C The building for all risks and its contents for listed perils. All risks on the building with named perils on the contents is the broad level.
    • D The building and its contents for all risks, flood and earthquake included. Flood and earthquake are named as optional coverages bought separately, so comprehensive does not carry them.

    Comprehensive is the top of the four levels, but it is not everything: the exclusions still apply, and flood, earthquake and sewer backup remain optional coverages a client buys on top.

28. What are the two parts of a homeowners policy?

    • A Building coverage and contents coverage. Building and contents are two heads inside the property half, so this misses the liability half entirely.
    • B Named perils coverage and all risks coverage. Named perils and all risks describe the level of coverage chosen, which is a later decision than the two categories.
    • C Property coverage and additional living expenses. Additional living expenses is a coverage inside the property half rather than a third category alongside it.
    • D Property coverage and liability coverage. Correct

    The property half covers loss of or damage to the things the client owns and the liability half covers what the client owes somebody else, which is the same line a habitational wording draws between its property section and its liability section.

29. What is the position of a broker who leaves her brokerage, joins no firm and is not a sole proprietor, when a former client asks her to arrange his renewal?

    • A Her registration is cancelled and she must apply again from the start. Section 8.1(a) makes the registration inactive rather than cancelled, and sections 8.1(c) and (e) contemplate a return to active status.
    • B She may place it if she tells the client her registration is inactive. The bar on carrying on business is absolute while the registration is inactive, so telling the client changes nothing.
    • C She may keep serving existing clients for up to 12 months. The 12 months in section 8.1(c) is the window to return the registration to active status by confirming new employment or sponsorship, not a period in which business may continue.
    • D Her registration is inactive and she must not act as a broker. Correct

    Section 8.1(a) of By-Law No. 3 turns an individual licensee's registration inactive the moment the licensee stops acting as a sole proprietor or being employed or sponsored by an active firm, so she must not carry on business as an insurance broker until an active firm employs or sponsors her again.

    By-Law No. 3, s. 8.1(a), (c)

30. Which statement is TRUE about overland flood coverage on a home policy?

    • A It is part of every standard home policy. Availability varies between insurers and depends on the flood risk they assess, so a high risk property may not qualify.
    • B It is not offered on every property. Correct
    • C It covers sewer backup. Sewer backup is a separate add-on from overland flooding, which is why the guidance lists them apart.
    • D It covers saltwater storm surge. The description turns on freshwater sources, and storm surge and tidal water are handled separately where they are offered at all.

    Overland flood coverage answers damage caused by excessive rainfall or snowmelt and by overflowing lakes, rivers and other freshwater sources entering the home, and it is not offered on every property, because the insurer decides eligibility from the flood risk it assesses.

31. Which statement about water damage and flooding on a standard home or tenant policy is TRUE?

    • A Water damage is a basic coverage, and flooding is not normally included. Correct
    • B Both water damage and flooding are basic coverages on every home policy. The federal guidance says the opposite, that coverage for flooding is not typically included in a standard policy.
    • C Neither is insured unless the client buys a separate water endorsement. The same guidance names water damage as a basic coverage, so a burst pipe does not need an add-on.
    • D Flooding is covered as standard, and burst pipes need an endorsement. This reverses the two: the burst pipe is the basic coverage and the flooding is the add-on.

    Public Safety Canada's guidance for householders states that water damage is a basic coverage on home and tenant policies covering incidents such as burst pipes and hot water tank leaks, and that flooding is not typically part of a standard policy.

32. What must you do when an Ontario resident who owns a car asks you for automobile insurance and you expect every insurer you deal with to decline?

    • A Tell the client no market is available and take the enquiry no further. The section imposes the duty on request without any market availability condition, and the Facility Association Plan exists for exactly this applicant.
    • B Give the client an application and submit the completed application to an insurer. Correct
    • C Refer the client to the Financial Services Regulatory Authority of Ontario (FSRA). The obligation named in the section falls on the agent, who must provide the application and submit it to an insurer.
    • D Take the application but hold it until an insurer agrees to consider it. Clause (b) requires the agent to submit the completed application to an insurer, not to wait for an insurer's indication first.

    Section 5 obliges an agent, when requested by an Ontario resident owner or lessee, to provide an application for automobile insurance and to submit a completed application to an insurer, so a broker may not screen a driver out by refusing to hand over the form.

    Compulsory Automobile Insurance Act, s. 5

33. A broker gives the Registered Insurance Brokers of Ontario (RIBO) an inaccurate answer in a routine file review, on a matter that turns out to be trivial. Which statement is TRUE?

    • A It is not misconduct if the underlying matter was not. The paragraph is a standalone item in the definition of misconduct, so it does not depend on the underlying matter being misconduct.
    • B It is not misconduct if corrected before the review closes. Correction may matter to penalty, but the paragraph makes the provision of false or misleading information the misconduct.
    • C It is misconduct only if given under oath. The paragraph is not limited to sworn evidence; it covers information provided to the Corporation in any form.
    • D The inaccurate answer is misconduct in itself. Correct

    Paragraph 14 of section 15(1) makes providing false or misleading information to the Corporation misconduct on its own, so the answer is judged separately from whatever it was about and a minor underlying matter does not excuse it.

    O. Reg. 991, s. 15(1), para. 14

34. In what name may a registered brokerage advertise and carry on business?

    • A The name in which the individual, corporation or partnership is registered. Correct
    • B Any name the brokerage's insurers have approved for their documents. An insurer's approval is not the registered name, and the paragraph measures against registration with the Corporation.
    • C Any trade name the brokerage has registered with a domain registrar. Registering a domain does not make a name the registered name, and the paragraph names advertisements, letterheads and signs among the ways the rule is broken.
    • D Any name not already in use by another brokerage in Ontario. Availability is not the test. The paragraph permits only the name the person or firm is registered in.

    Paragraph 6 of section 15(1) makes it misconduct to hold out, advertise or carry on business in any manner other than the name in which the individual, or the corporation or partnership of which the individual is the designated representative, is registered.

    O. Reg. 991, s. 15(1), para. 6

35. A client is admitted to a hospital in Florida and needs to be moved to an Ontario hospital for ongoing care. She left Canada without travel medical insurance. Who pays for the transfer home?

    • A OHIP pays the full cost of the transfer. The province's page is plain that OHIP pays nothing toward moving a resident from a hospital abroad to one in Ontario.
    • B She pays half of the cost of the transfer. OHIP pays none of the transfer, so there is no share for OHIP to carry; she bears all of it.
    • C OHIP pays once an Ontario hospital accepts her. Being accepted by an Ontario hospital does not bring the transfer into OHIP; the page puts that cost on a traveller with no travel medical insurance.
    • D She pays the full cost of the transfer. Correct

    The Government of Ontario's page on OHIP coverage outside Canada says OHIP does not pay for moving a resident hospitalized abroad to an Ontario hospital for ongoing care. With no travel medical insurance that covers transportation, the whole cost of the transfer falls on her, which is why that page tells travellers to buy travel medical cover before leaving.

36. What date must an insurance card show when a client binds coverage on Wednesday and asks for it to be dated Monday, the day before a police stop?

    • A Monday, the day he meant to buy the coverage. Intention to buy, and what the insurer would have done, are not the date the contract was made, and the subsection fixes the card to the latter.
    • B Tuesday, the day of the police stop. Any date earlier than the date the contract was actually made is barred, so a compromise date is still a breach.
    • C Monday, with the true binding date noted on the file. A file note does not cure a card that misstates the effective date, which is what the subsection prohibits.
    • D Wednesday, the day the contract was made. Correct

    Section 6(2) of the Compulsory Automobile Insurance Act prohibits an insurer or its agent from specifying on an insurance card an effective date earlier than the date the contract was actually made, or otherwise misrepresenting the particulars of the insurance.

    Compulsory Automobile Insurance Act, s. 6(2)

37. A brokerage ad for home insurance at $61 a month is accurate but assumes a $2,500 deductible, no mortgage and a monitored alarm, none of which the ad mentions. Where does the ad stand under the misconduct rule?

    • A The accurate figure makes it acceptable. The paragraph expressly covers an illustration that misrepresents by omission, so accuracy of the stated figures is not a defence.
    • B It is acceptable once the assumptions are given at the quote. The advertisement is the item the paragraph measures, and a later conversation does not undo the impression it created.
    • C It needs the insurer's written consent. Nothing in the paragraph forbids advertising a premium or requires an insurer's consent; what it forbids is an illustration that misrepresents, including by omission.
    • D It is misconduct. Correct

    Paragraph 1 of section 15(1) names the use of an illustration, circular or memorandum that misrepresents, or by omission is so incomplete that it misrepresents, the terms, benefits or advantages of a policy, so accurate numbers with the conditions left out are caught.

    O. Reg. 991, s. 15(1), para. 1

38. For how many insurers may an insurance agent licensed for all classes other than life act?

    • A Up to three, one each for auto, property and liability. No number of that kind appears in the subsection, which states one insurer only.
    • B One insurer only, licensed for the class of insurance. Correct
    • C Any number, provided each insurer is licensed in Ontario. The subsection restricts the agent to one insurer, and section 392.2(5) requires the licence to specify that insurer by name.
    • D Any number, provided each appointment is disclosed to the client. Disclosure does not enlarge the licence; section 392.2(7) further bars the agent from representing that they act for any other insurer.

    Section 392.2(4) provides that a licence in the accident and sickness class or the all classes other than life class authorises an agent to act for one insurer only, and that insurer must itself be licensed for the applicable class, which is what separates an agent from a broker placing business across several markets.

    Insurance Act, s. 392.2(4)

39. A broker who doubts parts of a client's proof of loss leaves it in a drawer for five weeks, telling no one, while the adjuster waits. What does the misconduct rule make of it?

    • A It is proper caution. Doubt about the contents is a reason to raise the point with the client and the adjuster, not to withhold the document, which is the delay the paragraph names.
    • B It is misconduct. Correct
    • C It is a matter for the insured, not the broker. Where the duty to deliver the proof originates does not licence the broker to hold it; the paragraph catches conduct that delays fair adjustment.
    • D It is misconduct only if the insurer denies the claim over the delay. The paragraph turns on conduct that results in unreasonable delay, not on the eventual outcome of the claim.

    Paragraph 7 of section 15(1) makes the use of any practice or conduct that results in unreasonable delay or resistance to the fair adjustment of claims misconduct, and sitting on a client's proof of loss is exactly that whatever the broker's private doubts.

    O. Reg. 991, s. 15(1), para. 7

40. Which cover pays when a client has to call off a trip before it starts?

    • A Trip interruption insurance. Trip interruption responds after departure, paying back the unused part of a trip cut short.
    • B Travel health insurance. Travel health insurance answers medical emergencies abroad, not a cancelled booking.
    • C Trip cancellation insurance. Correct
    • D Lost luggage insurance. Lost luggage cover answers luggage lost in transit, not a cancelled trip.

    The federal guidance separates the two trip covers by timing: trip cancellation applies only when the traveller cancels before the trip starts, while trip interruption pays back the unused part of a trip cut short after departure. Travel health insurance answers medical costs abroad, so a trip called off at home falls to trip cancellation.

41. May a brokerage pay an accountant who is not an agent or broker a share of the commission on the clients he refers?

    • A No, a broker may not pay an unlicensed person for placing insurance. Correct
    • B Yes, the ban binds insurers and their agents, not brokers. The subsection names brokers expressly: 'No insurer, and no officer, employee or agent thereof, and no broker, shall directly or indirectly pay or allow'.
    • C Yes, a payment out of the broker's own commission is a saving. The saving in s. 403(3) is a 'payment by way of dividend, bonus, profit or savings that is provided for by the policy', which a share of a brokerage's commission is not.
    • D Yes, if the payment is disclosed to the client before placement. Section 403 states a prohibition rather than a disclosure duty, so telling the client does not make the payment lawful.

    Section 403(1) bars an insurer, its officers, employees and agents, and a broker, from paying or agreeing to pay compensation or anything of value for placing or negotiating insurance in Ontario to a person who is not an agent or broker, and the exceptions in s. 403(3) reach only a policy dividend, bonus, profit or saving and an insurer's payment to its own salaried employee, so a commission split with an unlicensed referrer is caught.

    Insurance Act, s. 403(1), (3)

42. What must a client do when a storm tears part of the roof off her building, the adjuster cannot come for three days and rain is forecast tonight?

    • A Wait for the adjuster before doing anything. Subcondition (1) of Statutory Condition 9 puts a positive duty on the insured to take all reasonable steps to prevent further damage, so waiting is the breach, and nothing in the conditions turns emergency salvage work into an alteration of the risk.
    • B Get the insurer's written approval before spending on repairs. The condition requires reasonable steps without making prior written authorisation a precondition.
    • C Tarp the roof at her own cost. Subcondition (2) requires the insurer to contribute proportionately to reasonable and proper expenses, so the cost is not left wholly with the insured.
    • D Take reasonable steps to prevent further damage. Correct

    Statutory Condition 9 requires the insured to take all reasonable steps to prevent further damage after a loss, and requires the insurer to contribute proportionately towards the reasonable and proper expenses of those steps according to the respective interests of the parties, so salvage runs in both directions.

    Insurance Act, s. 148, Statutory Condition 9

43. What amount of insurance does a co-insurance clause on a commercial property form require the insured to carry?

    • A The full actual cash value. The requirement is a percentage of actual cash value rather than the whole of it, and falling short reduces the recovery rather than defeating the claim.
    • B The full replacement cost. Replacement cost only becomes the measure where a replacement cost endorsement is added, and the clause as written measures against actual cash value.
    • C The stated percentage of each loss. The percentage is applied to the value of the property, not to the size of the loss.
    • D The stated percentage of actual cash value. Correct

    The clause obliges the insured to carry insurance of at least the actual cash value multiplied by the co-insurance percentage on the declaration page, and where less is carried the recovery is the loss multiplied by insurance carried over insurance required.

    Commercial Property Named Perils Form C100, clause 4 (Co-Insurance) Reference document, not law.

44. Who are the three parties to a surety bond?

    • A The insured, the insurer and the broker who arranged the bond. A broker arranges the bond and is not a party to it, and a surety bond is not written as a two party insurance contract.
    • B The contractor, the project owner and the owner's lender. Those are commercial roles rather than the names the bond gives its parties, and the lender is not bound by the bond.
    • C The principal, the surety and the obligee. Correct
    • D The applicant, the underwriting company and its reinsurer. A reinsurer stands behind the surety and takes no place in the bond itself.

    A bond binds the principal, who owes the obligation, and the surety, who guarantees it, to the obligee for whose benefit the guarantee is given, so suretyship is a three party arrangement where insurance is a contract between two.

    Bid bond, form PWGSC-TPSGC 504, Bond recital Reference document, not law.

45. What does a claims made liability policy respond to?

    • A Injury that happens in the policy period, whenever the claim arrives. That describes the occurrence trigger, which the claims made form replaces.
    • B Claims first brought against the insured within the policy period. Correct
    • C Any claim arising from conduct during the policy period. The policy looks to when the claim is first made, not when the conduct took place, so a claim brought after the period for conduct during it falls outside unless a discovery period is bought.
    • D Claims after the period for injury that happened during it. Claims made after the period are picked up only where a discovery period has been bought.

    A claims made policy answers only claims first brought against the insured within the policy period, and reported as the policy requires. An occurrence policy instead answers injury or damage that happens in the period, however late the claim comes.

    Non-Profit Management and Corporate Liability Insurance Policy TDONPE.001, Policy face wording Reference document, not law.

46. Which expression matches the co-insurance formula a claims adjuster applies to a partial loss?

    • A The amount of damages divided by the amount of insurance, multiplied by the value of the property. That inverts the ratio and multiplies by the wrong figure, so it does not produce an indemnity at all.
    • B The insurance carried divided by the minimum required, applied to the net damages. Correct
    • C The minimum amount required divided by the amount of insurance carried, applied to the damages. Turning the fraction upside down would pay a client who is underinsured more than the loss.
    • D The co-insurance percentage applied directly to the amount of the damages. The percentage is used to work out the minimum amount required, not applied straight to the damages.

    The amount of insurance carried goes above the line and the minimum the clause required goes below it, so the fraction that results is what the damages are multiplied by to give the indemnity.

47. Windstorm damages your insured's mortgaged home and the claim is approved. She wants the money paid to her so she can hire her own contractor. Each of the following is accurate EXCEPT which one?

    • A The insurer may pay her directly so that she can have the home repaired. Accurate and so not the answer: the page names the homeowner as one of the two the insurer may give the money to, so that the home can be fixed.
    • B The insurer may pay her lender, which releases the money once she shows receipts. Accurate and so not the answer: the page names the lender as the other, and says the lender then hands the money over for repairs or replacement once receipts are submitted.
    • C She chooses whether the insurer pays her or pays her lender. Correct
    • D Her policy will usually make her lender the beneficiary through a loss payee clause. Accurate and so not the answer: the page says a home insurance policy on a mortgaged home will usually include a loss payee clause that makes the mortgage lender the beneficiary.

    The Financial Consumer Agency of Canada's home insurance page states that the insurer may give the claim money to the homeowner or to the lender at the insurer's discretion, and that a lender paid this way releases the money for repair or replacement once receipts are produced, so the choice of who is paid rests with the insurer rather than with the homeowner.

48. Which claim is NOT covered by Liability Coverage under the Ontario Automobile Policy (OAP 1)?

    • A Bodily injury to a passenger in the described automobile. Bodily injury to a passenger is a third party claim that Liability Coverage is written to answer.
    • B Damage to property carried in the automobile or in the insured's care. Correct
    • C Damage to a customer's wall the insured strikes while parking. A customer's wall is property the insured neither owns nor rents nor has in their care, custody or control, so damage to it stays inside Liability Coverage.
    • D Injury to a pedestrian struck in a crosswalk. A pedestrian's injury claim is precisely the kind of third party claim the coverage responds to.

    The other limitations in Liability Coverage exclude claims for damage to property carried in or upon the automobile and to other property owned or rented by, or in the care, custody or control of, the insured or other insured persons, which is the gap OPCF 27 and OPCF 27B are sold to fill.

    OAP 1, Section 3.5.1

49. Which Ontario Policy Change Form (OPCF) pays for a rental car, taxis or public transit when an insured loss leaves your insured without a car?

    • A OPCF 43, Removing Depreciation Deduction. OPCF 43 removes the depreciation deduction from a loss settlement and pays nothing towards transportation.
    • B OPCF 19A, Agreed Value of Automobiles. OPCF 19A settles the value of the automobile and does not reach the cost of getting around while it is off the road.
    • C OPCF 27, Liability for Damage to Non-Owned Automobiles. OPCF 27 covers liability for damage to a non-owned automobile in the insured person's care, not the client's own transportation costs.
    • D OPCF 20, Coverage for Transportation Replacement. Correct

    OPCF 20 exists to pay for other means of transportation when loss or damage from a peril the client is insured for takes the automobile off the road, and it reimburses the reasonable expenses of a rental as well as taxicab or public transportation costs.

    OPCF 20, Section 1

50. A registered broker wants to sell real estate on weekends. When is that allowed?

    • A Never; no other business is allowed at all. A flat prohibition overstates the rule, because subclause (iii) opens the door to 'such other business as the Qualification and Registration Committee considers appropriate'.
    • B Only with the Qualification and Registration Committee's approval, on its terms. Correct
    • C Whenever the second business involves no insurance selling. Clause 5(1)(b) restricts the individual's 'only business or employment', so a non-insurance business is not automatically acceptable.
    • D Once the principal broker approves it in writing and files it. The approval power sits with the Qualification and Registration Committee, not with the brokerage's principal broker.

    Section 5 of Regulation 991 limits a registered individual's business or employment to that of an insurance broker, or an insurance broker and life insurance agent, or such other business as the Qualification and Registration Committee considers appropriate, so the outside business needs that Committee's approval and terms rather than an office level sign off.

    O. Reg. 991, s. 5(1)(b)

51. Under the Registered Insurance Brokers Act, what must a person hold before acting as an insurance broker in Ontario?

    • A A licence issued by the Financial Services Regulatory Authority of Ontario (FSRA). The Act requires registration with the Registered Insurance Brokers of Ontario, not a Financial Services Regulatory Authority of Ontario licence: 'No person shall act as an insurance broker unless the person is a registered insurance broker under this Act.'
    • B Registration as an insurance broker under the Registered Insurance Brokers Act. Correct
    • C Employment with a registered brokerage, working under the principal broker's registration. Registration is personal. Section 2(2)(f) exempts only an employee of a registered person who is engaged solely in clerical or administrative duties, not one acting as a broker.
    • D Written authority from an insurer allowing the person to bind coverage. Authority from an insurer to bind coverage goes to what a broker may do once registered; section 2 still requires the person to be a registered insurance broker.

    Section 2 of the Registered Insurance Brokers Act bars any person from acting as an insurance broker unless that person is personally registered under the Act, so working at a registered firm or belonging to an industry association does not stand in for the individual's own registration.

    RIB Act, s. 2(1)

52. What must a broker have, besides explaining the risks, before placing cover with an unlicensed insurer?

    • A Proof that the unlicensed insurer's premium is lower. Clause (c) turns on being unable to obtain sufficient insurance 'at reasonable rates or on the form of contract required' from licensed insurers, so a cheaper unlicensed price is not the test.
    • B The client's written consent to the placement. Correct
    • C Nothing more than a verbal go-ahead. Clause (b) requires 'the written consent of the member of the public', which a verbal instruction does not supply.
    • D Approval from the Financial Services Regulatory Authority of Ontario (FSRA). Subsection 10(1) asks for no regulator approval; one of the disclosed risks is in fact that 'The Chief Executive Officer has no authority under the *Insurance Act* in respect of the insurer.'

    Subsection 10(1) of Regulation 991 requires three things together before a placement with an unlicensed insurer, namely disclosure of the four listed risks, written consent from the client, and the inability to obtain sufficient insurance at reasonable rates or on the required form from licensed insurers, so a verbal go ahead leaves the second condition unmet.

    O. Reg. 991, s. 10(1)

53. Marc charges companies a fee to advise them on their coverage and cannot bind any insurer. Under the Registered Insurance Brokers Act, what is he?

    • A Exempt from registration without binding authority. The definition expressly covers a person acting 'whether or not the person has agreements with insurers allowing the person to bind coverage and countersign insurance documents on behalf of insurers'.
    • B A fee-paid consultant, exempt from registration. The definition opens with 'any person who for any compensation, commission or other thing of value', so a fee paid by the client is compensation and keeps him inside it.
    • C A broker only once he places a contract. Placing a contract is only one of the listed activities; clause (c) captures consulting and advisory services on their own.
    • D An insurance broker. Correct

    The definition of insurance broker in section 1 of the Registered Insurance Brokers Act covers a person who deals directly with the public for compensation and provides consulting or advisory services about insurance, so binding authority is not what brings Marc inside the definition.

    RIB Act, s. 1

54. Hana is stopped in slow traffic when the car behind her in the same lane runs into her rear. The road was icy that morning. How is fault shared?

    • A Hana and the other driver are each 50 per cent at fault. Road conditions are expressly excluded from the fault determination, so ice cannot shift a share onto the stopped driver.
    • B Fault is decided under the ordinary rules of law. The ordinary rules of law apply only where no rule describes the incident, and this rear-end pattern is described directly.
    • C Hana is not at fault and the other driver is 100 per cent at fault. Correct
    • D Hana is 25 per cent at fault for stopping in a live traffic lane. The rule assigns no fault to the struck automobile where it is stopped or in forward motion in the same lane.

    The Fault Determination Rules deal directly with a rear-end collision between two automobiles travelling in the same direction and lane, and road conditions are not considered, so the stopped driver is not at fault and the following driver carries 100 per cent.

    R.R.O. 1990, Reg. 668, s. 6 (2)

55. What is the minimum liability limit every Ontario automobile policy must carry for any one accident?

    • A $100,000 One hundred thousand dollars is below the statutory floor and would not satisfy the section.
    • B $200,000 Correct
    • C $500,000 Five hundred thousand dollars is a common limit sold in the market but it is above the statutory minimum.
    • D $1,000,000 One million dollars is a frequently recommended limit, not the minimum the Act requires.

    Subsection 251 (1) of the Insurance Act sets the statutory floor at $200,000 for any one accident exclusive of interest and costs, so higher limits are a matter of what the client buys rather than what the law demands.

    Insurance Act, s. 251 (1)

56. Within what period must an insured start an action against the insurer to recover a claim under a home policy?

    • A Within one year after the loss or damage occurs. Correct
    • B Within two years after the insurer denies the claim. Wrong on both counts: the condition sets one year, and it runs "next after the loss or damage occurs", not from a denial.
    • C Within one year after the insurer denies the claim. The length is right but the starting point is wrong; the condition counts from the loss or damage, not from the insurer's denial.
    • D Within two years after the loss or damage occurs. Two years is the general limitation period, but statutory condition 14 sets one year for a claim under this contract and bars a later action absolutely.

    Statutory condition 14 bars the action absolutely unless it is commenced within one year next after the loss or damage occurs, so the clock runs from the loss itself and not from any later step in the claim.

    Insurance Act, s. 148, Statutory Condition 14 (Action)

57. Your insured's home is damaged by a fire a contractor started with a blowtorch, and the insurer pays the claim. What may the insurer do next?

    • A Recover from the contractor, suing in your insured's name if it needs to. Correct
    • B Wait for your insured to sue, then claim a share of what is recovered. The subsection lets the insurer "bring action in the name of the insured", so it does not have to stand behind an action started by the client.
    • C Nothing, once your insured has been paid under the policy. Payment is the very event that triggers subrogation under the subsection, which attaches "upon making a payment or assuming liability therefor".
    • D Pursue the contractor only if your insured signs an assignment first. The right arises by statute on payment or on assuming liability for payment, so no signed assignment is required.

    Section 152 (1) subrogates the insurer to all rights of recovery of the insured against any person upon making a payment or assuming liability for one, and expressly lets the insurer sue in the name of the insured, so no separate step by the client is needed.

    Insurance Act, s. 152 (1)

58. Who is exposed when an unregistered assistant at a brokerage quotes and binds auto risks, and the principal broker knows but does not stop it?

    • A Only the assistant. The by-law puts an express duty on the principal broker about unregistered staff, so the exposure is not the assistant's alone.
    • B Only the firm. The prohibition on acting as an insurance broker without registration attaches to the person who acts, so the firm is not the only party at risk.
    • C Both the assistant and the principal broker. Correct
    • D Neither, while the assistant is supervised. Supervision does not license unregistered broking; the by-law requires that unregistered staff not act as insurance brokers at all, whatever the Plan of Supervision says.

    Section 6.1(d)(vii) makes it a principal broker's duty to ensure that no director, partner or employee of the active firm who is not registered acts as an insurance broker, and section 2(1) of the Registered Insurance Brokers Act separately bars an unregistered person from acting as one.

    By-Law No. 3, s. 6.1(d)(vii)

59. What must a brokerage do before it can hold a certificate of registration as an insurance broker?

    • A Designate an individual broker as the firm's principal broker. Correct
    • B Appoint a director who holds a risk management designation. The subsection requires an individual who is an insurance broker, and names no outside designation or diploma.
    • C Name one employee to hold the certificate on the firm's behalf. The firm itself holds the certificate; the individual designated is the principal broker, not a substitute certificate holder.
    • D Retain an outside consultant to review its client files each year. No external review is required by section 7.2; the requirement is the designation of a principal broker.

    Section 7.2(1) requires a firm that holds or wishes to hold a certificate of registration to designate an individual who is an insurance broker as its principal broker, so a firm cannot be registered without one in place.

    O. Reg. 991, s. 7.2(1)

60. Your client paid $420,000 for her house. Rebuilding it would cost $610,000, and the municipal assessment is $480,000. For what amount should you advise her to insure the building?

    • A $420,000, the price she paid for the property. The purchase price includes the land and reflects the market, so it does not measure what rebuilding the structure would cost.
    • B $480,000, the municipal assessment of the property. The municipal assessment is a tax figure and can sit well away from the cost of construction.
    • C $610,000, the cost to rebuild the house. Correct
    • D $503,000, the average of the three figures. Averaging unlike numbers produces a figure that matches none of them, and underinsurance is what leads to a co-insurance reduction.

    The building amount has to match the cost of putting the same house back up from scratch, so it can sit well away from what the market pays for the property and from the figure a tax roll carries.

61. What does Liability Coverage under the Ontario Automobile Policy (OAP 1) pay for?

    • A Losses others suffer that the law holds the insured responsible for. Correct
    • B Damage to the insured's own car in a collision with another vehicle. Damage to the insured's own car from a collision is an optional Loss or Damage coverage under Section 7, not something Liability pays.
    • C The insured's own medical and rehabilitation costs after an accident. The insured's own medical and rehabilitation costs are paid under Accident Benefits in Section 4, which pays whoever caused the accident.
    • D Damage to the insured's car caused by an uninsured driver. Damage to the insured's car by an identified uninsured motorist falls under Uninsured Automobile Coverage in Section 5.

    Section 3.1 of the Ontario Automobile Policy (OAP 1) provides that Liability Coverage pays the amounts the law holds the insured or other insured persons responsible for when others are injured or suffer losses, so it protects the insured against claims by other people rather than paying the insured's own losses.

    OAP 1, Section 3.1

62. A five-year-old television cost $2,400 new and is destroyed in a covered loss. Contents settle at actual cash value, depreciation is assessed at 60 per cent and the deductible is $500. How much would the insurer pay?

    • A $960. The deductible applies to the claim, so stopping at the actual cash value figure overstates the payment.
    • B $460. Correct
    • C $1,440. That is the amount taken off rather than the amount paid.
    • D $1,900. Taking the deductible off the cost when new skips the depreciation step altogether.

    Actual cash value is the cost when new less depreciation, so 60 per cent off $2,400 leaves $960, and the deductible then comes off that figure because the insured always bears it.

63. Which statement BEST describes Accident Benefits coverage on an Ontario automobile policy?

    • A It pays the insured's medical, rehabilitation and attendant care, whoever caused the accident. Correct
    • B It pays the insured's medical costs only when another driver caused the accident. Accident Benefits pay regardless of who caused the accident, so they do not depend on another driver being at fault.
    • C It pays the insured's medical costs only after a court decides who was at fault. No court finding of fault is needed, because the coverage applies whoever caused the accident.
    • D It pays for damage to the insured's car, whoever caused the accident. Accident Benefits pay for the injured person's care; damage to the car is dealt with under other coverages such as direct compensation property damage or the optional Loss or Damage coverages.

    The Ontario Automobile Policy (OAP 1) states that Accident Benefits provide medical, rehabilitation and attendant care benefits to an injured insured regardless of who caused the accident, so fault never decides whether they are paid. Under the Statutory Accident Benefits Schedule (SABS) as reformed on July 1, 2026, these three stay standard, while benefits such as income replacement are optional for policies issued or renewed on or after that date.

    OAP 1, Insurance Required by Law

64. Which items does a condominium corporation's policy leave to the unit owner's own policy?

    • A The common property, including hallways, stairs and the roof. Common property such as hallways, stairs and the roof is squarely on the corporation's side of the line.
    • B The buildings shown on the condominium plan. The buildings on the condominium plan are the corporation's to insure.
    • C The owner's contents, unit improvements, and their liability. Correct
    • D The corporation's own furniture and equipment. Condominium assets such as the corporation's furniture and equipment are insured by the corporation.

    The two policy structure is what makes a unit owner policy necessary rather than optional, because the corporation's policy stops short of the owner's contents, the improvements made to the unit and the owner's personal liability.

65. Your client rents her apartment and asks why she needs tenant insurance when she owns no building. What two things is it bought for?

    • A Her possessions and the landlord's building itself. The landlord insures the building; the tenant's liability coverage answers where the tenant is legally responsible for damaging it.
    • B Her possessions and her personal liability. Correct
    • C Her possessions and the rent she still owes while the unit is repaired. Additional living expense coverage helps with the cost of living elsewhere, which is a coverage inside the policy rather than one of its two halves.
    • D Her personal liability and the landlord's own loss of rent. The landlord's loss of rent is the landlord's own insurance, not something a tenant policy is bought for.

    Tenant insurance covers possessions in the apartment and while the tenant is away, and it carries personal liability because a tenant can be answerable for damage to the building and for harm to people who live in or visit it.

66. Which statement is TRUE about home coverage on a seasonal cottage?

    • A Part-time occupancy can limit it to named perils. Correct
    • B It always follows the owner's main form. The form offered depends on the risk being underwritten, and a seasonal property is a different risk from a principal residence.
    • C It cannot be written unless the cottage is occupied all year round. Seasonal and secondary properties are routinely insured, usually on a narrower basis rather than not at all.
    • D It puts the contents on named perils and the building on all risks. The usual restriction runs across the whole policy on a seasonal risk, not just the contents half.

    Part-time occupancy is the underwriting reason: a property nobody is watching for weeks at a time carries a different risk, so seasonal and secondary properties are commonly written on a named perils basis with fire, explosion and smoke among the listed perils.

67. An employed broker puts a client's premium cheque into a personal account in his own name over a long weekend and pays the brokerage on Tuesday. What is that under the trust rules?

    • A It is allowed, with the money at the brokerage on the next banking day. Section 16(4) governs when trust money must reach a trust account, but section 16(8) bars this member from controlling the funds at all, so getting the money in promptly does not cure the breach.
    • B It is allowed, with no money lost. Absence of loss and the designation of the account are not defences; the prohibition is on control of trust funds and on holding the account in the member's own name.
    • C It is a breach only if the trust account was overdrawn. The state of the firm's account is irrelevant to a prohibition addressed to the individual member, and section 16(6) measures the firm's trust position for a different purpose.
    • D It is a breach. Correct

    Section 16(8) provides that no member who is not a sole proprietor, partnership or corporation shall control trust funds or maintain a trust account in the member's own name, so the trust obligation sits with the firm and an employed broker cannot take it on personally however careful the intention.

    O. Reg. 991, s. 16(8)

68. Which BEST describes actual cash value on a home policy?

    • A Replacement cost less depreciation, weighing condition and life expectancy. Correct
    • B A fixed percentage of depreciation for each full year of the item's age. A flat yearly percentage ignores the condition and resale value the wording tells the adjuster to consider.
    • C The price the insured originally paid for it, less any rebate or discount. The original price is a historic figure and the clause starts from the cost of replacement instead.
    • D What the item would fetch second hand, with nothing else taken into account. Resale value is one of three inputs rather than the whole measure.

    Actual cash value is not simple age based depreciation: the wording directs the adjuster to weigh three inputs, which is why two items of the same age can settle at different figures.

69. By what date each year must an individual licensee complete the required continuing education?

    • A August 31. August 31 is the date for filing the renewal application and paying the annual fee, not the continuing education deadline, which is September 30.
    • B September 30. Correct
    • C October 31. October 31 is a month after the deadline, which the by-law sets at September 30.
    • D December 31. December 31 is not the deadline; the by-law sets September 30 and each 12-month period after that.

    By-Law No. 3 requires an individual licensee who is not a principal, deputy principal or supervising broker to complete the continuing education on or before September 30 and within each 12-month period after that. A licensee who misses it, and is not exempted, has the registration suspended.

    By-Law No. 3, s. 7.1(a)

70. What should a broker do when a client asks for $200 out of the brokerage's commission to keep her renewal?

    • A Refuse the request. Correct
    • B Pay it out of the brokerage's own commission. Where the money comes from does not matter: handing back part of the premium, directly or indirectly, is a rebate whether the brokerage or anyone else pays it.
    • C Pay it once the client puts the request in writing. A written request does not change what the payment is; paragraph 4 has no exception for a client who asks for the rebate.
    • D Give her a $200 gift card instead. Paragraph 4 reaches anything of value given in place of a premium refund, so a gift card is the same rebate in another form.

    Paragraph 4 of section 15(1) of Regulation 991 makes it misconduct to give a person insured a rebate of the whole or part of the premium, or any other thing of value meant as a rebate, so the broker refuses however the $200 would be paid.

    R.R.O. 1990, Reg. 991, s. 15(1), para. 4

71. Under which Government of Canada advisory levels will many travel policies not cover a trip?

    • A Avoid all non-essential travel, or avoid all travel. Correct
    • B Take normal security precautions, or exercise a high degree of caution. Neither of these lower levels is named in the warning, which identifies only the advisories to 'avoid all non-essential travel' or 'avoid all travel'.
    • C Any advisory at any level, which ends the policy automatically. No advisory voids a policy by itself: the Government of Canada 'does not issue its Travel Advice and Advisories for the purpose of travel insurance coverage or refunds', so the effect depends on the wording of the policy.
    • D Avoid all travel only, and no lower level. The warning names both advisory levels, so treating 'avoid all non-essential travel' as harmless is wrong.

    The federal guidance states that many travel insurance policies will not cover a traveller who goes to a region under a Government of Canada advisory to avoid all non-essential travel or to avoid all travel, so either of those two levels can leave a client uninsured, and whether cover is actually lost turns on the policy wording.

72. Your client's travel policy covers his heart condition subject to a 90-day stability clause. Six weeks before he flies, his cardiologist adds a new medication and raises the dose of another. Which statement is TRUE about his cover for the heart condition?

    • A It can be lost over the medication changes. Correct
    • B It is unaffected; the clause looks only at new diagnoses. The clause requires 'no new medical conditions, symptoms or medications during the stability period', so medications are named alongside conditions and a new prescription counts on its own.
    • C It holds; he was not admitted to hospital. The test is stated as 'no changes to your medical condition' plus no new conditions, symptoms or medications; hospital admission is not the measure, so avoiding hospital does not satisfy it.
    • D It is unaffected; the clause runs only from departure. The period is expressly the stability period 'before your trip', so the window closes at departure rather than opening there.

    A stability clause requires no change to the medical condition and no new conditions, symptoms or medications during the stability period before the trip, so a new prescription and a dose change six weeks out fall inside that 90 day window and can put the heart condition outside the pre-existing condition cover.

73. Which insurance may a travel agent who is not a registered insurance broker sell with bookings?

    • A Travel accident and sickness, baggage or trip cancellation insurance. Correct
    • B Any insurance for a client who books travel with them. The exemption is limited by its own words to a registrant 'acting in respect of travel accident and sickness, baggage or trip cancellation insurance', so it does not reach every class of insurance sold alongside a booking.
    • C Travel health insurance only. Travel health is only part of the named list; baggage and trip cancellation appear in the same clause, so restricting the exemption to health cover understates it.
    • D Travel accident and sickness insurance plus auto insurance on a rental car. Automobile insurance is not named in the clause, so placing it would fall back under the general prohibition that 'No person shall act as an insurance broker unless the person is a registered insurance broker under this Act.'

    Section 2 of the Registered Insurance Brokers Act lifts the broker registration requirement for a Travel Industry Act registrant only in respect of travel accident and sickness, baggage and trip cancellation insurance, so anyone placing a class outside that short list is acting as an insurance broker and must be registered.

    RIB Act, s. 2(2)(e)

74. Your insured, a contractor, runs six automobiles under one company: five cargo vans for job sites and one car the owner drives personally. Which statement is TRUE about the six automobiles?

    • A They fall short of a fleet, which needs at least ten automobiles. Ten is too high a bar, because the definition reads 'a group of not fewer than five automobiles'.
    • B They qualify as a fleet. Correct
    • C They fall short of a fleet while one of them is a personal car. The regulation asks only that at least five of the automobiles in the group be commercial vehicles, public vehicles or vehicles used for business purposes, so a personal car in the group does not spoil it.
    • D Any one commercial vehicle among them makes the group a fleet. One commercial vehicle is not enough, since the group must hold at least five automobiles and at least five of them must meet the vehicle-use test.

    Regulation 664 sets the floor at five automobiles with at least five of them commercial vehicles, public vehicles or vehicles used for business purposes, so the five cargo vans carry the group over the line even though the sixth automobile is personal.

    R.R.O. 1990, Reg. 664, s. 1

75. Two property policies placed by different brokers cover the same bakery stock. Fire destroys $60,000 of it. What does each insurer pay?

    • A The whole loss, where the insured picks that insurer. The insured is not put to an election, because the statute makes each insurer 'liable to the insured for its rateable proportion of the loss'.
    • B $60,000 Rateable contribution prevents double recovery, since the insured is indemnified for the loss and not once per contract.
    • C Its rateable proportion of the loss. Correct
    • D Nothing from the later insurer; its policy is void. Neither contract is void for the existence of the other, and the statute deems a contract in force even where it says it will not attach until another policy pays.

    Subsection 150 (1) of the Insurance Act splits a loss between contracts covering the same interest by rateable proportion unless the insurers have expressly agreed otherwise in writing, so both insurers contribute and the bakery is indemnified once.

    Insurance Act, s. 150(1)

76. An uninsured pickup backs into a parked car in Ontario, and its driver gives his name and admits full fault. Repairs cost $1,000. The car's OAP 1 policy carries Uninsured Automobile and direct compensation coverage, but no Collision or Upset. What would the insurer pay?

    • A $0 Collision or Upset is not needed, because Uninsured Automobile coverage pays property damage caused by an identified uninsured driver.
    • B $300 The $300 is the deductible the insured bears on the loss, not the amount the insurer pays.
    • C $700 Correct
    • D $1,000 Direct compensation needs another automobile insured under a liability policy, and the Uninsured Automobile payment is reduced by its $300 deductible.

    Direct compensation property damage applies only where at least one other automobile involved is insured under a motor vehicle liability policy, so it cannot respond to an uninsured pickup. Uninsured Automobile coverage in the Ontario Automobile Policy (OAP 1), Section 5.2.3, pays damage an identified uninsured driver caused, subject to the $300 deductible that R.R.O. 1990, Reg. 676, Schedule, s. 2(1)(f) sets, so the insurer pays $1,000 less $300, or $700.

    R.R.O. 1990, Reg. 676, Schedule, s. 2(1)(f); OAP 1, Section 5.2.3

77. Which of these businesses does NOT need a garage automobile policy (OAP 4)?

    • A A parking lot operator. Parking automobiles is one of the garage trades the policy names, so a parking operator needs the garage policy.
    • B A used car dealer. Selling automobiles is one of the garage trades the policy names, and a dealer holds customers' vehicles on its lot.
    • C A taxi dispatch service. Correct
    • D An auto repair shop. Repairing and servicing automobiles are garage trades the policy names, so a repair shop needs the garage policy.

    The garage policy (OAP 4) insures a business that has customers' automobiles in its care, custody or control, and the policy itself names the automobile trades as selling, repairing, maintaining, storing, servicing or parking automobiles, for example in subsection 7.16. A taxi dispatch service only sends out cabs and never takes charge of a customer's automobile, so it needs an owner's policy on its own fleet, not a garage policy.

    OAP 4, subsection 7.16

78. What is the difference between a commercial property broad form and a named perils form?

    • A A broad form covers only listed perils; a named perils form covers every risk not excluded. This reverses the two forms: the broad form is the one written on an all risks basis, and the named perils form is the one limited to a list.
    • B Both forms cover every risk not excluded; a named perils form simply carries more exclusions. A named perils form does not start from every risk; it covers only the perils it names, so the difference is not a count of exclusions.
    • C A broad form covers every risk with no exclusions; a named perils form covers only listed perils. The broad form still carries exclusions; it covers every risk except what those exclusions take away, which is why all risks does not mean everything.
    • D A broad form covers every risk not excluded; a named perils form covers only listed perils. Correct

    A broad form starts from every risk of physical loss to the property and takes cover away only through its exclusions, so a loss is paid unless an exclusion reaches it. A named perils form pays only when the loss comes from one of the perils on its list.

    Commercial Property Broad Form C518, clause 5 (Insured Perils) Reference document, not law.

79. A damaged compressor is settled at actual cash value under an equipment breakdown endorsement. Replacing it with equipment of like kind and function would cost $85,000, and the adjuster assesses depreciation at 35%. What is the actual cash value?

    • A $29,750 $29,750 is the depreciation itself, being 35% of $85,000, which is the amount held back rather than the amount paid.
    • B $55,250 Correct
    • C $63,750 $63,750 applies 25% depreciation instead of the 35% the adjuster assessed.
    • D $85,000 $85,000 is the replacement cost, and the definition sets actual cash value at that cost 'less depreciation however caused'.

    The endorsement defines actual cash value as what it costs to replace the damaged equipment with equipment of like kind and function, reduced by depreciation, so the settlement is $85,000 less the 35% depreciation the adjuster assessed, which leaves $55,250.

    Equipment Breakdown Endorsement C301, Definitions, clause 14 (Actual Cash Value) Reference document, not law.

80. What does the insurer pay when a workshop insured with a replacement cost endorsement burns down and the owner decides not to rebuild?

    • A The full replacement cost of the workshop. The extra over actual cash value is paid only once the work is done, and never more than was spent.
    • B The actual cash value of the workshop. Correct
    • C Nothing at all. The insured still recovers on the basis that applies without the endorsement, so declining to rebuild costs the uplift, not the whole claim.
    • D The replacement cost, held in reserve for a later rebuild. No reserve is held; until the work is done, liability is simply what it would be without the endorsement.

    Until the insured has repaired, replaced or rebuilt, the endorsement leaves the insurer's liability where it would stand with no replacement cost cover, which on the commercial property form is actual cash value. Even after the work is done, the payment cannot pass what the insured actually spent.

    Replacement Cost Endorsement X560, item 9 Reference document, not law.

81. What makes a taking of property a robbery under a crime cover?

    • A It is taken from a locked container on the premises. A taking from a locked safe or container falls under the rider's separate safe burglary and forced entry wording, not the robbery definition.
    • B It is taken by violence or threat of violence against a custodian. Correct
    • C It is taken while the premises are open to the public. Trading hours are not the test; the definition asks how the property was taken.
    • D It is taken by someone with no right to be on the premises. Having no right to be there does not by itself make a taking robbery; the definition turns on violence or its threat against the messenger or custodian.

    The rider defines robbery by how the property was taken: by violence against a messenger or custodian, by putting that person in fear of violence, or by another open criminal act done in their presence and to their knowledge. Where the property was kept does not decide it.

    Comprehensive Dishonesty Disappearance & Destruction Rider C800, Section 3 (Definitions, Robbery) Reference document, not law.

82. Which cover protects your client against theft by one of its own employees?

    • A Employee dishonesty coverage. Correct
    • B Burglary insurance. Burglary cover answers a taking by someone who forces a way into or out of the premises, leaving visible marks, not a quiet theft by staff already inside.
    • C Robbery insurance. Robbery is a taking by violence or threat from a messenger or custodian, not a quiet theft by staff.
    • D Commercial general liability insurance. A liability policy answers claims by others against the insured, not the insured's own lost property.

    Employee dishonesty coverage, Insuring Agreement I of the comprehensive dishonesty, disappearance and destruction rider, pays for money, securities or other property lost directly through a fraudulent or dishonest act of an employee, alone or with others, so theft by staff falls to it and not to burglary or robbery cover.

    Comprehensive Dishonesty Disappearance & Destruction Rider C800, Insuring Agreement I Reference document, not law.

83. Your insured is rear-ended at a red light and found not at fault, and both cars carry Ontario policies. He wants to sue the other driver for $6,000 of repairs and his ruined trunk contents. Where does he recover the loss?

    • A He may sue the other driver, and his own insurer then subrogates. The same subsection also removes the insurer's right of indemnification or subrogation for what it pays, except as the regulations permit.
    • B The other driver's insurer pays the whole loss. The other driver's insurer does not pay these losses, because the section directs the insured to their own insurer.
    • C He recovers from his own insurer and cannot sue anyone else for that damage. Correct
    • D He may choose between suing the other driver and claiming from his own insurer. There is no choice on offer: the right of action against the other participants for those losses is taken away.

    Section 263 routes damage to an insured automobile, its contents and loss of use to the insured's own insurer, and then removes the right of action against anyone else involved in the incident for those losses, so the not-at-fault driver collects from their own company rather than from the other driver.

    Insurance Act, s. 263 (5)

84. What triggers a claim under a gross earnings business interruption form?

    • A A drop in turnover against the same period last year. A trading downturn on its own is not insured damage, and the form is written around physical destruction or damage.
    • B Any stoppage of trade longer than a stated waiting period. The trigger is physical damage by an insured peril at the described premises, not the passage of time.
    • C An interruption caused by insured damage at the described premises. Correct
    • D A key supplier's failure to deliver materials. A supplier's failure to deliver is not damage by an insured peril to property on the described premises, so it sets nothing off.

    The gross earnings form pays loss that flows directly from an interruption of the business made necessary by physical damage from an insured peril to buildings, machinery, equipment or stock at the premises described. With no insured physical damage there is nothing for it to answer, so a fall in trade alone is not a claim.

    Business Interruption Insurance Gross Earnings Endorsement Form C715, clause 1 (Indemnity Agreement) Reference document, not law.