Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Regarding an all risk homeowners policy, which statement is incorrect?

1. Perils covered are listed

2. It covers all risks unless excluded

3. Coverage applies unless explicitly stated otherwise

4. Property loss is documented by the insurer

The correct answer is: Perils covered are listed

The assertion that an all risk homeowners policy lists the perils covered is not accurate. In an all risk (or open perils) policy, coverage is provided for all risks of physical loss or damage to property unless specifically excluded in the policy itself. This means that instead of listing what is covered, it emphasizes what is not covered through specific exclusions, hence giving a broader and often more comprehensive level of protection to the policyholder. The other statements accurately reflect the nature of an all risk homeowners policy. Such policies typically cover a wide range of risks unless they are explicitly excluded, reinforcing the principle that coverage is generally more inclusive. Additionally, coverage applies unless there is a specific exception stated in the policy. It's also common for insurers to require documentation of property loss to process claims effectively, ensuring that claims are substantiated by appropriate evidence.