Registered Insurance Brokers of Ontario (RIBO) Practice Exam

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Prepare for the Registered Insurance Brokers of Ontario Test. Study with comprehensive flashcards and multiple choice questions, each question provides hints and detailed explanations. Ace your exam with confidence!

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If the same building sustains $104,000 in damage, how much will the claimant receive?

$60,000
$104,000
$45,000
$80,000

The correct answer is: $60,000

The correct answer is that the claimant will receive $60,000. This conclusion is typically based on the principle of underinsurance or a specific policy limit set within the insurance coverage terms. In many scenarios related to insurance, the maximum payout is determined not just by the amount of damage incurred, but also by the limits specified in the insurance policy. In this case, if the policy limit is $60,000, even though the damages are assessed at $104,000, the insurer would only pay out the maximum limit, which is $60,000. This emphasizes the importance of policy limits and ensuring that property is adequately insured to avoid significant financial losses. This situation illustrates why understanding the limits of insurance policies is critical for both claimants and those purchasing insurance, as it directly impacts the amount recoverable in the event of a loss. Other amounts listed in the choices do not reflect the appropriate claim payout as determined by an insurance ceiling or the coverage details stipulated in the policy.