Canadian Accredited Insurance Broker (CAIB) One Practice Exam

Which of the following does NOT generally affect an insurer's decision to grant coverage?

1. Age of the property

2. Color of the building

3. History of claims

4. Location of the property

The correct answer is: Color of the building

An insurer's decision to grant coverage is influenced by various factors that help assess the risk associated with the property. The age of the property is significant because older structures may have outdated systems and materials that could pose higher risks. The history of claims is another critical factor; a property with frequent claims may be seen as a higher risk, leading insurers to either deny coverage or increase premiums. Furthermore, the location of the property is vital, as certain areas may be more prone to natural disasters, crime, or other risks that insurers need to consider. In contrast, the color of the building does not typically influence an insurer's decision to grant coverage. Color does not have a bearing on the structural integrity, safety, or risk profile of a property. Therefore, it is not a factor that insurers evaluate when deciding whether to provide coverage, making it the correct response.