Humber/Ontario Real Estate Course 2 Exam Practice

Which concern would most likely affect an insurance company's decision to provide fire coverage for an older home?

1. The electrical main disconnect is separate from the distribution panel

2. The home has 10-circuit distribution panel

3. The home has 100-amp service

4. The home has knob-and-tube wiring

5. The home lacks a complete insulation system

6. The home has a wooden roof structure

The correct answer is: The home has 100-amp service

An insurance company's decision to provide fire coverage for an older home is likely to be affected by the home's electrical service. In this case, the choice C stating that the home has 100-amp service is the correct answer. Older homes with outdated electrical systems or insufficient amperage may pose a higher risk of fire hazards, potentially leading an insurance company to either deny coverage or charge higher premiums. The other options are not as relevant to the insurance company's decision regarding fire coverage for an older home: - Option A about the electrical main disconnect being separate from the distribution panel is more of a safety concern rather than directly impacting the fire coverage decision. - Option B mentioning a 10-circuit distribution panel is specific to the electrical setup and does not directly pertain to fire coverage. - Option D stating the home has knob-and-tube wiring is another electrical issue that could be a concern but is not as central to fire coverage decisions as overall amperage. - Option E highlighting a lack of a complete insulation system is more about energy efficiency and may not be the primary factor for an insurance company's decision on fire coverage. - Option F mentioning a wooden roof structure is again more of a structural issue rather than directly linked to fire coverage considerations.