Canadian Accredited Insurance Broker (CAIB) One Practice Exam

What must changes to an insurance policy be made in?

1. Verbal agreement

2. Written form

3. Electronic communication

4. Public announcement

The correct answer is: Written form

Changes to an insurance policy must be made in written form to ensure clarity, compliance, and legal validity. Having changes documented in writing provides a clear record of the amendments made, which can help prevent misunderstandings or disputes between the insurer and the insured. Written communication serves as a formal acknowledgment of the changes, making it easier to reference in the future if any issues arise. This practice is in line with industry standards and regulations that require important modifications to be clearly documented to protect both parties involved in the insurance contract. While verbal agreements can sometimes be used in informal discussions, they lack the permanence and clarity that written forms provide. Electronic communication may be secure and efficient but may still require formal written confirmation depending on the agreement's complexity and the jurisdiction's requirements. Public announcements are not appropriate for changes to individual insurance policies, as they pertain to the specific contractual arrangement between the parties.