Registered Insurance Brokers of Ontario (RIBO) Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 475

A cigarette sets the automobile seat on fire and causes $450 damage. The policy shows a $300 deductible under Specified Perils. The insurer would pay:

$0

$150

In this scenario, the total damage caused by the fire is $450, while the deductible on the insurance policy is $300. The deductible represents the amount that the policyholder must pay out of pocket before the insurance company covers any remaining losses.

To determine the amount the insurer will pay, the deductible is subtracted from the total damage. Specifically, when the $300 deductible is applied to the $450 damage, the calculation is as follows:

$450 (total damage) - $300 (deductible) = $150

Therefore, the insurer would cover the remaining $150 after the deductible has been taken into account. This is why the correct answer is that the insurer would pay $150.

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$300

$450

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