FREE RIBO Insurance Products and Coverage Questions and Answers
Which of the following is not a generally accepted practice for dealing with risk?
Explanation:
In risk management, ignoring the risk is not a generally accepted practice. Risk management involves identifying, assessing, and mitigating risks to protect against potential losses. Ignoring risks leaves individuals or organizations vulnerable to adverse events that could result in financial or other types of losses. Instead, risk should be acknowledged and addressed through strategies such as risk control, risk transfer, or risk avoidance to minimize its potential impact.
Statutory conditions apply to:
Explanation:
Statutory conditions apply to Fire Insurance. This means that there are specific legal requirements and regulations that must be followed when providing coverage for Fire Insurance.
The Insurance Act states that the Removal of Property extension on a fire policy provides coverage for property temporarily removed from the insured premises to prevent loss, damage, destruction, or further loss from an insured peril for a maximum period of:
Explanation:
The Removal of Property extension on a fire policy typically provides coverage for property temporarily removed from the insured premises to prevent loss, damage, destruction, or further loss from an insured peril for a maximum period of seven (7) days. This coverage is designed to protect property during short-term relocation or storage situations.
Indemnity ________:
Explanation:
Indemnity in insurance ensures that an insured neither gains nor loses from an insured loss. It aims to restore the insured to the same financial position they were in before the loss occurred. This principle prevents individuals from profiting from insurance claims and promotes fairness and equity in the settlement process.
What is the amount called that is refunded to the client if an insured cancels their policy?
Explanation:
When an insured cancels their policy, they may be entitled to a refund of the premium they paid. The short rate is the amount refunded to the client, which is less than the pro-rata refund. The short rate takes into account the administrative costs and expenses incurred by the insurance company. It is calculated based on a predetermined formula and is often applied when the policy is canceled before its expiration date.
Who would not be considered to have insurable interest?
Explanation:
Insurable interest refers to having a financial stake or potential loss if the insured property is damaged or lost. In this scenario, a person expecting to inherit property after their father's death does not currently have a financial interest in the property. Insurable interest typically requires a direct financial connection to the property, such as ownership, a financial stake, or legal liability. While the other options demonstrate clear insurable interest, the expectation of inheriting property does not meet this criterion until the inheritance occurs.
A basic fire policy will automatically cover all of the following except one. What is the exception?
Explanation:
Typically, when a building is sold or transferred to a new owner, the insurance coverage does not automatically extend to the purchaser unless specific arrangements have been made. The new owner needs to procure their own insurance policy to cover the property after the transfer of ownership. Until the new owner obtains their own insurance, they are not covered under the original insured's policy. It's essential for the new owner to arrange for insurance coverage promptly to protect their interest in the property.
Salvage is ________:
Explanation:
Salvage refers to property that remains after a loss but still retains some value. Insurers may choose to salvage items to recover a portion of their losses by selling salvageable items or materials. Salvageable property can include items that are damaged but can be repaired, or materials that can be recycled or repurposed.
The Insurance Act states that one of the following situations is not excluded under a fire policy:
Explanation:
The Insurance Act states that damage caused by a fire that spread from a neighboring property to the insured property is not excluded under a fire policy. This coverage ensures that damage resulting from external sources, such as neighboring fires, is covered under the policy, providing financial protection to the insured against such risks.
What covers employee infidelity?
Explanation:
A 3D policy covers employee infidelity. This type of policy provides coverage for losses caused by dishonest acts committed by employees, such as theft, fraud, or embezzlement. It is designed to protect the employer from financial losses resulting from the actions of their employees.
Insurance contracts require three additional elements to make an insurance contract enforceable at law. Which of the following is NOT one of these additional elements?
Explanation:
An unconditional agreement is not one of the additional elements required to make an insurance contract enforceable at law. In insurance contracts, an unconditional agreement is typically assumed, as it is a fundamental aspect of contract law that parties must freely and willingly consent to the terms of the contract. The three additional elements typically required in insurance contracts are insurable interest, utmost good faith, and indemnity. These elements ensure the validity and fairness of insurance contracts, safeguarding the interests of both the insurer and the insured.