Registered Insurance Brokers of Ontario (RIBO) Practice Exam

If a claim arises due to a fire negligently caused by smoking, which section of the policy would respond?

1. Property Damage Coverage

2. Personal Liability Coverage

3. Medical Payments Coverage

4. Personal Property Coverage

The correct answer is: Personal Liability Coverage

The most appropriate section of the insurance policy that would respond to a claim arising from a fire negligently caused by smoking is Personal Liability Coverage. This section is designed to provide protection to the insured against claims for damages they may cause to third parties due to their negligence, including incidents such as fires. If someone has caused damage to another person's property due to negligent actions, in this case, smoking, Personal Liability Coverage would typically cover the costs associated with that damage. Property Damage Coverage usually pertains to the insured’s own property, while Medical Payments Coverage relates to medical expenses incurred by others due to an injury on the insured’s property, regardless of fault. Personal Property Coverage addresses losses or damages to the insured's own belongings rather than liability to others.