Registered Insurance Brokers of Ontario (RIBO) Practice Exam

What is the primary purpose of an insurance broker?

1. Provide personal financial advice

2. Help clients select coverage plans

3. Negotiate with underwriters

4. Act as a claims adjuster

The correct answer is: Help clients select coverage plans

The primary purpose of an insurance broker is to help clients select coverage plans. Brokers serve as intermediaries between clients and insurance companies, assessing the needs of clients and recommending appropriate insurance products that fit those needs. This involves understanding the specific risks an individual or business might face and tailoring insurance coverage accordingly. While brokers often engage in negotiation with underwriters and may have a deep understanding of the markets, their fundamental role centers around guiding clients in choosing the right coverage. This process includes comparing different policy options, explaining terms, and ensuring clients are informed about their choices. Providing personal financial advice and acting as claims adjusters are roles that can exist within the insurance industry, but they are not the primary focus of a broker’s responsibilities. A broker's expertise is more aligned with facilitating the purchase of insurance rather than giving comprehensive financial advice or handling claims directly.