Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Can an insured cancel their homeowner's policy at any time?

1. Yes, with immediate effect

2. No, only at the policy end

3. Yes, but fees may apply

4. No, unless a claim is not pending

The correct answer is: Yes, with immediate effect

The correct interpretation is that an insured has the ability to cancel their homeowner's policy at any time, with immediate effect. This flexibility is a feature of most homeowner's insurance policies, allowing policyholders to adjust their insurance coverage based on changing circumstances such as selling a home or finding a better policy elsewhere. While there might not be penalties in practice, fees for policy cancellation could occasionally apply. This means that policyholders may receive a pro-rated refund for the unused portion of the premium; however, it's essential to consult the specific terms of the policy. Moreover, certain conditions or state regulations may dictate specific processes or notice requirements when it comes to cancellation. This complexity doesn't negate the fundamental right of cancellation. The other options suggest limitations that don't align with standard practices in homeowner's insurance policies. Therefore, the insured indeed has the right to cancel their policy whenever they choose, with immediate effect.