Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Regarding changes to building repair laws, coverage for increased costs can be obtained how?

1. By default in standard policies

2. By endorsement on the property policy

3. By purchasing additional rider coverage

4. By paying a premium tax

The correct answer is: By endorsement on the property policy

The correct option highlights the way coverage for increased costs associated with building repairs can be obtained through an endorsement on the property policy. An endorsement is a modification to the standard policy that provides additional terms or coverage. These endorsements can be tailored to include specific coverage needed for unique situations or enhancements, such as increased costs due to building laws or regulations that may arise after a loss. This option reflects the flexibility of insurance to adapt to the changing legal landscape and ensure that clients remain adequately covered for any additional expenses they may incur due to necessary upgrades or adjustments mandated by new laws or regulations. In contrast, standard policies may not inherently provide this kind of specialized coverage without an endorsement. Additional rider coverage generally refers to a broader additional coverage that might not specifically target legislative changes, and paying a premium tax does not relate to obtaining coverage but rather to the administrative aspect of insurance purchasing in certain jurisdictions.