Humber/Ontario Real Estate Course 1 Exam Practice

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Which of the following statements is true about the RECO insurance program?

  1. Errors and omissions insurance is optional.

  2. Consumer deposits are only protected if a registrant is a member of CREA.

  3. A broker registrant is exempt from the RECO insurance program if he or she is a broker of record.

  4. The RECO insurance program includes consumer deposit protection, errors and omissions protection, and commission protection.

  5. Coverage is limited to specific types of transactions.

  6. Membership in a local real estate board is required for insurance.

The correct answer is: The RECO insurance program includes consumer deposit protection, errors and omissions protection, and commission protection.

The selected answer highlights the comprehensive nature of the RECO insurance program, which is designed to provide important protections for real estate professionals and consumers. This program includes consumer deposit protection, errors and omissions protection, and commission protection, ensuring that both clients and registrants have coverage in various scenarios that might arise during real estate transactions. Consumer deposit protection is crucial to maintain trust in transactions, as it safeguards funds held on behalf of buyers. Errors and omissions protection is vital for registrants, as it covers legal costs and damages arising from mistakes or negligence in the performance of their professional duties. Commission protection adds another layer of security for real estate professionals, ensuring they receive their due earnings under the agreed terms. The breadth of this coverage signifies the program's role in enhancing accountability and safeguarding both consumers and real estate professionals in Ontario's housing market.

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