Registered Insurance Brokers of Ontario (RIBO) Practice Exam

What type of coverage can be added to a property policy for an additional premium?

1. Flood damage coverage

2. Theft protection coverage

3. Earthquake damage coverage

4. Liability coverage

The correct answer is: Earthquake damage coverage

The correct answer, earthquake damage coverage, can be added to a property policy as an additional premium. Property insurance typically covers standard risks such as fire and theft. However, certain risks like earthquakes are often considered higher-risk events and are not included in standard property coverage. As a result, policyholders have the option to add earthquake coverage, which requires an additional premium, tailored to the specific risks associated with earthquakes based on location and building type. Flood damage and theft protection coverage may also be available as endorsements or riders, but they are often subject to different regional regulations and considerations. Liability coverage, while crucial for overall protection, generally stands alone as a separate type of insurance that covers legal responsibilities for injury or damage to third parties and is not typically added directly to property policies in the form of an endorsement.