Humber/Ontario Real Estate Course 2 Exam Practice

What should be verified if a first-time homebuyer applies for insurance but the property has outdated infrastructure?

1. Past insurance claims on different properties

2. Validity of condition waiver

3. Necessity for infrastructure upgrades to issue policy

4. Home’s market value reassessment

5. Insurance of surrounding properties

6. Buyers insurance history with other assets

The correct answer is: Necessity for infrastructure upgrades to issue policy

When a first-time homebuyer applies for insurance but the property has outdated infrastructure, it is crucial to verify the necessity for infrastructure upgrades to issue the policy. This is because outdated infrastructure poses potential risks and liabilities that insurance companies need to assess before providing coverage for the property. The insurance company may require certain upgrades or repairs to be completed before they can issue the policy to ensure that the property meets their specific standards and to mitigate any potential risks. Therefore, verifying the necessity for infrastructure upgrades is essential in this situation. The other options are not directly related to the issue of outdated infrastructure and insurance coverage for the property. Past insurance claims on different properties, validity of condition waiver, home's market value reassessment, insurance of surrounding properties, and buyer's insurance history with other assets do not address the specific concern of outdated infrastructure and its impact on obtaining insurance coverage for the property.