Humber/Ontario Real Estate Course 4 Exam Practice

Why might the inclusion of a conditional clause to verify insurability be considered?

1. It is added for the benefit and protection of the seller.

2. Is always included because it is part of the pre-printed agreement.

3. Is an option to be considered based on the age, condition, and location of the property.

4. Would not require an extended timeframe to allow for an inspection of the property.

5. Always required for any purchase.

6. Is necessary for legal protection.

The correct answer is: Is an option to be considered based on the age, condition, and location of the property.

The inclusion of a conditional clause to verify insurability is often assessed based on various factors such as the age, condition, and location of the property. These elements can significantly impact the property's insurability and the potential risks associated with it. For instance, an older home may have outdated wiring or plumbing, making it more difficult to insure or leading to higher insurance premiums. Similarly, if a property is located in a high-risk area, such as a flood zone or a region prone to natural disasters, its insurability can be affected. Property condition is also crucial; if a home has structural issues or requires extensive repairs, it may not qualify for standard insurance policies. Therefore, including a condition related to verifying insurability allows buyers and sellers to navigate these complexities effectively and make informed decisions before proceeding with the transaction. This approach helps provide both parties with the necessary assurance that the property can be insured, protecting them from potential future liabilities.