Registered Insurance Brokers of Ontario (RIBO) Practice Exam

What can an insured do if they believe their insurance coverage is insufficient for high-value items?

1. Request a higher deductible

2. Seek a reinsurance arrangement

3. Inquire about a valued contract

4. Purchase a policy endorsement

The correct answer is: Inquire about a valued contract

Selecting to inquire about a valued contract is the appropriate action for an insured concerned about insufficient coverage for high-value items. A valued contract specifically guarantees the amount the insurer will pay in the event of a total loss of the insured item. This means that the insured can ensure that their high-value possessions are covered for their full value, rather than being subject to depreciation or market value at the time of loss, which might not reflect their true worth. In contrast, while increasing a deductible could potentially lower premium costs, it does not enhance the coverage available for high-value items and may not provide adequate compensation in the event of a significant loss. Seeking a reinsurance arrangement is typically a consideration for insurers rather than individual insureds; it's a mechanism used by insurance companies to manage risk and is not applicable to personal policyholders. Purchasing a policy endorsement may modify certain terms or add specific coverage, but it may not directly address the fundamental concern of insuring high-value items to their full worth, especially if a valued contract option is available. Thus, inquiring about a valued contract most directly aligns with the need to ensure that high-value possessions are sufficiently and appropriately covered.