Registered Insurance Brokers of Ontario (RIBO) Practice Exam

When is a vacancy permit required for a residential insurance policy?

1. The premises are unoccupied and no contents remain

2. The premises are occupied but contents are minimal

3. Only when the homeowner requests one

4. The premises are being renovated

The correct answer is: The premises are unoccupied and no contents remain

A vacancy permit is typically required for a residential insurance policy when the premises are unoccupied and there are no contents remaining. This situation is significant because an unoccupied property can pose increased risks for the insurer. Factors such as vandalism, theft, and deterioration due to lack of maintenance can lead to claims. When a home is completely unoccupied without any contents, insurers need to be informed in order to assess risk appropriately and adjust coverage terms if necessary. In contrast, if the premises are occupied but the contents are minimal, or if the homeowner simply requests a permit, it may not trigger the same need for a vacancy permit. Similarly, properties under renovation may still have some level of occupancy or contents, potentially altering the risk profile and thus the insurance coverage needed. Thus, a vacancy permit is specifically tied to the total lack of occupancy and contents, making the first option the correct context for when such a permit is required.