Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Under which condition might a property insurance claim be denied?

1. If the insured is found at fault

2. If the insured fails to report the damage

3. If the damage is due to lack of maintenance

4. If the damage occurs outside of coverage hours

The correct answer is: If the damage is due to lack of maintenance

The correct answer highlights that damage resulting from a lack of maintenance can lead to a denial of a property insurance claim. This principle is rooted in the expectation that policyholders must take reasonable care of their property. Insurance policies typically include maintenance clauses that require the insured to actively maintain their property to prevent avoidable damage. If damage occurs purely because the property was not properly maintained, insurers can argue that the policy does not cover losses arising from neglect. This approach underscores the shared responsibility between insurers and insureds; while insurers provide compensation for covered losses, insureds are expected to uphold their duties in safeguarding the property.