Ch1 | 10 Q |General Insurance

RIBO is an acronym for:

• Real Insurance Brokers of Ontario.

• Registered Insurance Brokers of Ottawa.

• Registered Insurance Brokers of Ontario.

RIBO regulates the:

• Licensing and professional competence of underwriters.

• Licensing and professional competence of insurance brokers across Canada.

• Licensing and professional competence of insurance brokers in Ontario.

Which of the following is not an example of speculative risk?

• Gambling.

• A home that has been damaged by a windstorm.

• Starting a new business.

• A faulty furnace.

A building is old and in poor condition. The older electrical wiring caused a small fire last year. This is an example of:

• Speculative risk.

• Moral hazard.

• Pure risk.

• Physical hazard.

Which of the following statements is not correct?

• With pure risk, there is a chance of loss but no chance of profit or financial gain.

• With speculative risk, there is the possibility of either financial loss or financial gain.

• With pure risk, there is a chance of either financial loss and/or financial gain.

• Insurance is based on pure risk.

Which of the following is an example of personal risk?

• The cost of repairing or replacing damaged property.

• The loss of one’s health or life.

• The loss of business income resulting from a fire at the business.

• Being held financially responsible for one’s negligent actions.

Which of the following is correct?

• A peril is an event which may cause a loss to occur.

• A hazard can cause a loss to be less severe.

• A business that makes heavy machinery is an example of a physical hazard.

• Moral hazards are easier to detect and correct than physical hazards.

A physical hazard is:

• A type of peril.

• The same as a moral hazard.

• A physical characteristic of a risk which may give rise to a loss.

• The possibility of a loss due to the nature of the insured.

The item that is insured or covered by an insurance policy is called:

• The object of insurance

• The policy

• The peril

• The hazard

In general, when an insurance company indemnifies an insured, it tries to:

• Put the insured back into the same financial position they were in when they purchased the policy

• Put the insured back into the same financial position they were in when the loss is finally settled with the insurance company

• Better the financial position of the insured

• Put the insured back into the same financial position they were in at the time the loss occurred