Humber/Ontario Real Estate Course 2 Exam Practice

Regarding insurance coverage, what should a buyer of an older, remote cottage do?

1. Will not be able to secure insurance coverage given the age of the cottage and its remote location.

2. Just needs to check with the seller to confirm that insurance coverage is available and at a reasonable cost.

3. Is prudent to insert a condition in the offer relating to obtaining insurance.

4. Need not be concerned, as insurance coverage is readily available for such properties.

5. Should contact multiple insurance providers for quotes.

6. Verify insurance details in the local registry office first.

The correct answer is: Is prudent to insert a condition in the offer relating to obtaining insurance.

For a buyer of an older, remote cottage, it is prudent to insert a condition in the offer relating to obtaining insurance. Older and remote properties can sometimes pose higher risks for insurers due to factors such as the condition of the property, distance from emergency services, and potential accessibility issues. By including a condition in the offer related to obtaining insurance, the buyer can ensure that they can secure suitable coverage at a reasonable cost before finalizing the purchase. This proactive approach allows the buyer to address any potential insurance challenges and protect their interests in the transaction. Option A is incorrect because while it may be more challenging to secure insurance for an older, remote cottage, it is not impossible. Option B is not as comprehensive as inserting a condition in the offer to protect the buyer's interests. Option D is incorrect as insurance coverage may not always be readily available for properties with specific risk factors. Option E is a good practice, but inserting a condition in the offer is a more formal and protective step for the buyer. Option F, verifying insurance details in the local registry office, may not always be sufficient or conclusive for ensuring adequate coverage for the buyer.