Registered Insurance Brokers of Ontario (RIBO) Practice Exam

What are the two main sections of a residential policy?

1. Property and casualty

2. Property and liability

3. Health and liability

4. Property and risks

The correct answer is: Property and liability

The correct response identifies the two main sections of a residential policy as property and liability. In a residential insurance policy, the property section typically covers damage to the physical structure of the home and personal belongings inside it due to various perils such as fire, theft, or natural disasters. The liability section, on the other hand, protects the homeowner against legal claims arising from injuries or damage that occur on their property, as well as situations where they might be held liable for incidents involving third parties. Other options do not accurately reflect the comprehensive structure of a residential insurance policy. For example, while property and casualty are associated with insurance, casualty typically refers to a broader category that encompasses various types of coverage, not solely relevant to residential properties. Health and liability is not applicable in this context since health insurance functions separately and does not pertain to property or homeowners' insurance. Similarly, while property and risks may address certain aspects of coverage, the terminology does not capture the essential liabilities that homeowners face. Thus, the identification of property and liability as the fundamental components appropriately delineates the critical areas of coverage within a residential policy.