Registered Insurance Brokers of Ontario (RIBO) Practice Exam

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Prepare for the Registered Insurance Brokers of Ontario Exam with comprehensive quizzes, flashcards, and expert tips. Build your confidence and knowledge to succeed in your licensing journey!

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A cigarette sets the automobile seat on fire and causes $450 damage. The policy shows a $300 deductible under Specified Perils. The insurer would pay:

$0
$150
$300
$450

The correct answer is: $150

In this scenario, the damage caused by the cigarette fire is $450, and there is a deductible of $300 specified in the insurance policy under the Specified Perils coverage. The deductible represents the amount that the insured must pay out of pocket before the insurance coverage applies. To determine the amount the insurer will pay, you need to subtract the deductible from the total damage cost. Since the total damage is $450, and the deductible is $300, the calculation would be: Total Damage - Deductible = Amount Insurer Pays $450 - $300 = $150 Therefore, the insurer would pay $150. This aligns with the way deductibles function in an insurance policy, whereby the insured retains responsibility for the deductible amount, and only the remaining balance is covered by the insurer.