RIBO Level 1 Entry-Level Broker Exam (RIBO-Level-1) Free Practice Test

Question 1

From an insurance standpoint, which situation will the premises be considered "vacant"?

A. When they are closed up for the night.

B. When the occupants moved out and no new occupant has moved in.

C. When the occupants are away on vacation.

D. When the occupants are living elsewhere temporarily while major building repairs are being made.

Correct Answer: B

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Question 2

Proper documentation of client files is critical for protecting a Broker and their brokerage from Errors & Omissions (E & O) Claims. In which situation would proper documentation NOT reduce the risk of liability for the Broker?

A. The client disputes the accuracy of their business operations recorded in the policy documents.

B. The Broker advises the client on coverage options, but the client declines the recommendations.

C. The Broker fails to send the binding order within the required timeframe.

D. The client claims they were unaware of policy exclusions despite signing the application.

Correct Answer: C

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Question 3

Which statement correctly identifies the RIBO annual Continuing Education (CE. hours requirement and the mandatory course categories a Level 1 Broker MUST complete?

A. Brokers must complete 8 hours of CE annually, including 2 hours of Ethics and 1 hour of Management.

B. Brokers must complete 6 hours of CE annually, including 1 hour of Ethics and 1 hour of Management.

C. Brokers must complete 6 hours of CE annually, including 1 hour of Ethics and 1 hour of Technical training.

D. Brokers must complete 8 hours of CE annually, including 1 hour of Ethics and 3 hours of Technical.

Correct Answer: D

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Question 4

A building worth $500,000 is insured for $300,000 with a 90% co-insurance clause. A fire causes $200,000 damage. How much does the insurer pay?

A. $122,222.22

B. $133,333.33

C. $100,000

D. $200,000

Correct Answer: B

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Question 5

Section II - Liability Coverage of the Homeowners Comprehensive policy provides coverage for Voluntary Payment for Damage to Property in which situation?

A. Damage to a ride-on lawn mower rented from a local rent-all establishment.

B. Property of others damaged intentionally by the insured's 10 year old son.

C. Theft from insured's premises of a shotgun on loan from a local sporting goods store.

D. Damage caused by a guest, who backed an automobile into a portable barbecue which the insured had borrowed from a neighbour.

Correct Answer: B

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Question 6

Your insured belongs to a car pool and uses their automobile to transport the other three members to work every fourth week. One of the other members drives each of the other three weeks. As their insurance broker, what would you do to make sure your client is covered against claims from passengers for injuries?

A. Add "Passenger Hazard" change form to the O.A.P. 1 Owner's Policy.

B. The standard O.A.P. 1 Owner's Policy automatically covers the situation. No change is necessary.

C. Advise the insurer to reclassify the vehicle as business use and re-rate the policy.

D. Add the change form "Permission to Carry Paying Passengers" to the O.A.P. 1 Owner's Policy.

Correct Answer: B

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Question 7

Sally and Tammy rent a vehicle for a trip to New York. Sally is listed as a driver on a private passenger vehicle policy in Ontario and has the Ontario Policy Change Form (OPCF) 27 coverage on her policy, but Tammy made the reservation and Sally is listed as the driver. Tammy is not listed on anyone's policy. Who will be covered to drive the rental vehicle?

A. Only Sally.

B. Both Sally and Tammy.

C. Neither Sally nor Tammy.

D. Only Tammy.

Correct Answer: A

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Question 8

A client is currently insured with a competing brokerage. They approach you to move their business because they are unhappy with their current broker's lack of communication. Before accepting the business and issuing a new policy, what is the most appropriate professional step to take in managing this transition?

A. Offer the client a "Switching Bonus" to cover any short-rate cancellation fees from the other brokerage.

B. Request a signed "Letter of Authority" or "Broker of Record Letter" from the client and advise them on the proper steps to provide a "Lapse of Insurance" notice to the previous broker.

C. Immediately sign the client and tell them to cancel their old policy via a phone call to the other broker.

D. Contact the other broker directly to explain that you are taking their client and demand the client's file.

Correct Answer: B

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Question 9

Which of the following would be considered a "material change in risk"?

A. A client replaces worn carpeting in their home.

B. A client re-paints the interior of their home.

C. A client installs a woodstove at their cottage.

D. A client installs a ceiling fan in their bedroom.

Correct Answer: C

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Question 10

Your insured's young son has just purchased an automobile and wants you to insure it in his father's name and show himself as an occasional driver. Which of the following steps should you take?

A. Place the policy with another insurer and rate the father as the principal driver.

B. Advise the son to register the vehicle in his mother's name and rate it on her driving record.

C. Issue the policy as requested.

D. Decline to issue the policy as the son is obviously the principal driver and registered owner.

Correct Answer: D

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IIC RIBO Level 1 Entry-Level Broker (RIBO-Level-1) Free Practice Test