Free IIC RIBO-Level-1 Exam Dumps Questions & Answers

A client has a homeowner's policy with replacement cost coverage for personal property. A covered fire loss destroys several items, including a 3-year-old television originally purchased for $2,000. The same model today retails for $1,500. The insurer issues a cheque for $1,500 to replace the TV. Which of the following best explains how the principle of indemnification is applied in this situation?

• A.  The insurer is overpaying the claim because the item has depreciated.
• B.  The insurer should reduce the payment based on the TV's actual cash value, even though replacement cost is selected.
• C.  The insurer is correctly applying replacement cost to restore the insured to their pre-loss position with an item of similar like kind & quality.
• D.  The insurer should have paid the original purchase price since that reflects the insured's original investment.

Two business partners at Happy Accounting Limited suffered a loss. It was revealed that the loss was caused by one of the partners Mr.Hap. What options does the insurer have to recover for the loss paid?

• A.  Negligence.
• B.  Subrogation.
• C.  No chance of recovery.
• D.  Waiver of subrogation.

A broker is approached by a high-net-worth client who wants to place their unique collector car insurance with an unlicensed US-based insurer because the rates are significantly lower. What is the broker's primary obligation?

• A.  Place the coverage as requested to ensure the client is satisfied with the savings.
• B.  Refuse the business because brokers are strictly prohibited from dealing with unlicensed insurers.
• C.  Advise the client of the risks, obtain a signed "Unlicensed Insurer" disclosure, and ensure no licensed market is available.
• D.  Tell the client to contact the US insurer directly so the broker can avoid any legal responsibility.

When determining the actual cash value of a building, which factors is NOT taken into consideration?

• A.  The normal life expectancy of the building.
• B.  The ownership of the building.
• C.  The resale value of the building.
• D.  The condition of the building immediately before the damage occurred.

A client who is currently conducting their business as a sole proprietorship is considering incorporating their business. What would be of MOST benefit to the client?

• A.  The client would have more competitive insurance premiums.
• B.  The client would pay less tax.
• C.  The client would not be personally liable for the risks within the business.
• D.  The client will have more insurance options available for their business.