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Insurance General Level 1 Licensing Exam

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The Insurance General Level 1 Licensing Exam is a mandatory entry-level exam for individuals seeking to become licensed insurance brokers or agents for general insurance (property and casualty). It tests knowledge of insurance principles, policies (auto, property), and industry ethics, typically requiring a passing score of 70% to apply for a license. Key Aspects of the General Level 1 Exam: Purpose: Qualifies candidates to sell and advise on general insurance products. Content Focus: Covers technical skills (60% - risk management, policy details), ethics and professionalism (20% -... Show more

The Insurance General Level 1 Licensing Exam is a mandatory entry-level exam for individuals seeking to become licensed insurance brokers or agents for general insurance (property and casualty). It tests knowledge of insurance principles, policies (auto, property), and industry ethics, typically requiring a passing score of 70% to apply for a license.

Key Aspects of the General Level 1 Exam:
Purpose: Qualifies candidates to sell and advise on general insurance products.
Content Focus: Covers technical skills (60% - risk management, policy details), ethics and professionalism (20% - confidentiality, compliance), and industry knowledge (20%).
Structure: Often 100 multiple-choice questions with a time limit (e.g., 2 hours).
Requirements: Requires completion of an approved pre-licensing course (e.g., in Alberta/BC) before taking the exam.
Validity: Exam results are generally valid for 12 months for licensing application.

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Insurance General Level 1 Licensing Exam

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1. All of the following, except one, have a bona fide 'insurable interest' in the property insured. Choose the exception.

The contract purchaserAn individual expecting to be a creditor or any property holderThe title holderThe mortgagee

2. The conditions of a policy of 'fire' insurance stipulate that insurance coverage expires at:

12:01am at the location of the property insured12:01pm at the address of the named insured12:01am at the address of the named insured12:01pm at the location of the property insured

3. Which of the following is a situation that is common cause of E & O claims?

All of theseFailure to send amendments to the insuredFailure to place coverage after being instructed to do soRecommending the incorrect limits of insurance

4. In insurance terms, which of the following is NOT a peril. A peril is the word for a cause of a loss.

Burglary or theftA wood burning stove used for heatingLightening, fire, windWindstorm, lightning

5. Property of an insured that has been damaged by an insured peril may be subject to further damage. Taking precautions to reduce further loss is the responsibility of the insured as set out in Statutory Condition #9 titled:

Entry, control and abandonmentWhen Loss PayableSalvageAppraisal

6. An Insured purchases a lot for $22,000 and builds a home on it that costs him $97,500. For insurance purposes, to insure for 100% of value, the policy would be for the sum of:

$97,500$22,000$100,000$119,500

7. Business Interruption Insurance and Boiler and Machinery coverage:

Are separate policies that an insured will often requireAre an endorsement easily added to every commercial policyAre never covered under any policy or combination of policies in the insurance industryAre available via extension of coverage and are included within every commercial policy

8. A 'peril' is best defined as:

The chance of a lossA known event that causes a loss to occurThe occurrence of a lossAn occurrence that causes a loss to occur

9. Our insured owns a hair salon. They sell products for hairstyling, including hairspray, spritz, mouse and gels as well as hairdryers and straightening irons. They have gels and mousse for use inside the salon when styling hair with their owned hairdryers. Which of the following is considered covered under stock coverage?

The product for sale plus product used in the salon is all considered stockOnly the product for sale is considered stockThe product for sale is considered stock but the product used in salon for treatments and styling is considered equipmentIt depends on the insurers wordings

10. What types of risks should need to have Crime Insurance coverage which covers safe burglary and fidelity insurance which is unlawful acts of employees, whether acting along or in collusion with others?

Only churches and social hallsBanks and places which has cash on handAll retail stores including drug stores, dollar storesAll of these

11. Misrepresentation is a very serious charge in the insurance business, and means:

Requiring the Insured to divulge all pertinent facts in the sale of coverageFailure to explain the method used in computing the premium rateLetting the Insured believe he has coverage for hazards which he doesn't actually haveComparing coverage of existing and proposed policies

12. Under S.P.F. No 1, damage to an automobile occurring within 24 hours after a bill of sale transferring ownership of the Insured automobile to another person is:

Covered for loss by theftNot covered for any lossCovered for loss if All Perils is carried on the Insured's policyCovered if damage due to collision

13. Re-insurance is a contract between an insurance & reinsurance companies to cover excess liability exposures. The contract is called:

A treatyA policyCatastrophic insuranceFacultative reinsurance

14. Under Subsection 2, of the Accident Benefits section of the S.P.F. No 1, Death Benefits will be paid in the event that both the head of household and spouse are killed:

Equally to all surviving dependent relativesTo the youngest surviving dependent relativeNone of theseTo the oldest surviving dependent relative

15. The Additional Agreements in Section C of the S.P.F. No1 waives subrogation under Section C against every person, who with the Insured's consent has care, custody, or control of the vehicle:

As long as they are a member of the Insured's familyExcept if involved in a race or speed testWithout restrictionNone of these

16. Under the Deductible Clause applicable to Sections C of S.P.F. #1, some losses are not subject to a deductible. Under any circumstance, under which situation will the insurer not apply a deductible?

Fire, lightning, theftFire, theft of the entire vehicle, windstormFire, lightning, certain types of explosionFire, theft of the entire vehicle, lightning

17. Consequential loss if defined as:

A loss that is a direct result of an occurrenceA loss that affects an insured's familyA loss that is an indirect result of an occurrenceA loss that indirectly affects a third party

18. Bankruptcy or insolvency of a policy holder affects the Insurer's liability as described in one of the following:

Required that any unearned premium be considered fully earned to termination of the policy termAutomatically voids the contractHas no bearing upon the insurance contractRequires that the amount of any prepaid premium be refunded

19. A 'physical hazard' is:

A type of perilA physical feature of a risk which may give rise to a lossThe same as a moral hazardThe possibility of a loss due to the character of the Insured

20. In addition to the five elements to be contained in all contracts, an insurance contract is enforceable only if it contains the following three additional elements:

Insurable interest, utmost good faith, lawful objectInsurable interest, indemnity, genuine intentionInsurable interest, indemnity, utmost good faithInsurable interest, consideration, indemnity

21. Your insured has a Condominium Owners policy. The condominium board has suffered a loss of $150,000 in one of the common areas, which was not completely covered by the Condominium Corporation's master policy. The loss has been assessed at $2,000 per unit owner. Your insured is adequately covered, but only 75% of other owners are covered. How will the Condominium Unit Owner's policy respond?

75% of $2,000 because only 75% of the unit owners are covered$2,000, less the $500 deductible$15,000$112,500

22. Which of the following employees of an insurance agency is NOT required to be licensed?

An office manager who communicates with an Insured about renewalsAn office employee who sells to his friend and relatives only, because of their unique position in his lifeAn office manager who also solicits new insurance principally on the telephoneAn office clerk assisting in claims reports and compiling of claims information

23. Under Section A of an S.P.F. No 1, the Insured agrees to do the following:

All of theseAppoint the Insurer as its irrevocable attorneyAdmit liability for any damage done by the InsuredAppoint an adjuster for the Insured

24. An accident, including continuous or repeated exposure to substantially the same general harmful conditions describes:

Use and operationLiability LossAn occurrenceAn accident

25. Your insured had to work at home through COVID-19. To do this, they were assigned a laptop by their office to perform their work at home. How is the laptop insured when their own home is in a house fire?

The laptop is not insured under their home policy as they have no insurable interestBest insured under their own home policy, temporarily removed anywhere in the worldBest insured under their own home policy under specific limits for business owned propertyOnly covered if there is no deductible under the Commercial Property policy

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All trademarks, logos and brand names are the property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.

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