2026 Actual Insurance Institute C11 Dumps, Updated Exam Questions for Guaranteed Pass

C11 free sample questions and answers

Insurance Institute C11 practice quiz with correct answers for search indexing.

1. Question 1

   A company suffers an $80,000 theft loss from its commercial property.

   Insurer A covers the property for $300,000.

   Insurer B covers the same property for $100,000.

   Assuming both policies have identical terms, how is the $80,000 loss shared?

   AInsurer A pays $0; Insurer B pays $60,000
   

   BInsurer A pays $40,000; Insurer B pays $40,000
   

   CInsurer A pays $60,000; Insurer B pays $20,000
   

   DInsurer A pays $80,000; Insurer B pays $0
   

   Correct answer: C

   When two insurers cover the same property, the principle of contribution applies. Each insurer pays a proportion of the loss based on its share of the total insurance in force. Here:

   Total insurance = $300,000 + $100,000 = $400,000

   Insurer A's share = 300,000 / 400,000 = 75%

   Insurer B's share = 100,000 / 400,000 = 25%

   Loss = $80,000

   Insurer A pays 75% 80,000 = $60,000

   Insurer B pays 25% 80,000 = $20,000

   Thus, C is correct.

   
   

2. Question 2

   [Insurance as a Contract: Policy Conditions]

   Deanna owns a house worth $1,000,000 but chooses to insure it for $500,000. What clause might prevent her from being fully reimbursed in the event of a loss?

   AForfeiture
   

   BCoinsurance
   

   CContribution
   

   DSubscription
   

   Correct answer: B

   The coinsurance clause requires the insured to carry insurance equal to a specified percentage (commonly 80%, 90%, or 100%) of the property's value. If the insured carries less than the required amount, they become a coinsurer and share in any partial loss. This prevents underinsurance and encourages insureds to maintain adequate coverage levels.

   Here, Deanna insures a $1,000,000 property for only $500,000---50%. If the policy requires 80% coinsurance, she should be carrying at least $800,000. Because she does not, she will not be fully reimbursed for partial losses; her payment will be reduced proportionally based on the coinsurance formula.

   Option A (forfeiture) applies to breaches of policy conditions. Option C (contribution) applies when multiple insurers cover the same risk. Option D (subscription) applies when several insurers share a single risk by percentage participation.

   Thus, the clause that could reduce Deanna's recovery is B: Coinsurance.

   
   

3. Question 3

   [Insurance as a Contract: The Insurance Policy]

   What is stated in the insuring agreements of a policy?

   APremium
   

   BLienholder
   

   CSignature clause
   

   DDescription of the property covered
   

   Correct answer: D

   The insuring agreement is one of the most essential components of an insurance policy. It describes what is insured, the coverage provided, and the extent of the insurer's promise to indemnify the insured. This section outlines the subject of insurance---property, liability exposure, person, or interest---and specifies what types of losses or perils are insured against. Thus, the accurate choice is D: Description of the property covered.

   Option A is incorrect because premium is stated in the declarations page, not in the insuring agreement. Option B, lienholder information, also appears in the declarations or conditions, not the insuring agreement. Option C, the signature clause, appears at the end of the policy to signify the insurer's formal acceptance of contractual obligations.

   The insuring agreement is the foundation of the policy because it establishes the insurer's undertaking and sets the boundaries of coverage, making option D correct.

   
   

4. Question 4

   [Insurance Documents and Processes]

   What is a cover note?

   APurchase agreement between the agent or broker and the insurer
   

   BAn amendment added to a written document that alters its provisions
   

   CFile notes confirming insurance discussions between the intermediary and the insured
   

   DDocument issued by intermediaries to inform the insured that coverage has been arranged
   

   Correct answer: D

   A cover note is a temporary document issued by a broker or agent to confirm that insurance coverage has been arranged and is in force, pending the issuance of the formal policy. It is typically used when immediate proof of insurance is required before the insurer can produce the finalized policy wording. Cover notes outline essential information such as the insured's name, type of coverage, limits, and effective dates.

   Option A is incorrect because a cover note is not a contract between insurer and broker. Option B describes an endorsement, not a cover note. Option C refers to internal file documentation but does not serve as official proof of insurance.

   Thus, the correct definition is option D: a document issued to the insured confirming that temporary coverage is effective until the formal policy is issued.

   
   

5. Question 5

   [Regulatory Framework]

   What are many of the statutory conditions designed to accomplish?

   AProvide clarity on the intent of the policy
   

   BOutline the steps to take to cancel the policy
   

   CState how PIPEDA applies to the insured and insurer
   

   DShift the onus of proof from the insured to the insurer
   

   Correct answer: A

   Statutory conditions exist in property insurance legislation across Canadian provinces to ensure that insurers and insureds operate with clarity, transparency, and fairness. These conditions outline important duties such as:

   Requirements for notice of loss

   Duties after a loss

   Conditions for voiding coverage

   Fraud provisions

   Replacement and salvage rules

   Their main purpose is to clarify the intent of the policy and give certainty to the terms and obligations of both parties. Because statutory conditions are mandated by law, they ensure uniform standards across all insurers and prevent inconsistent or unclear policy interpretations.

   Option B is only a small subset of what statutory conditions address.

   Option C is incorrect---privacy legislation like PIPEDA is separate from insurance statutory conditions.

   Option D is incorrect; statutory conditions do not alter legal burden-of-proof standards.

   Thus, the best answer is A.