Chapter 5

Question 1

What is noted in the opening statement of the policy form ?

Answer 1

The IBCs homeowners forms begin with two statements, required by law, advising the insured that the policy contains a clause that may limit the amount payable under the policy. One of the statements applies in all provinces and territories except in Quebec and the other in Ontario only.

The opening statements go in to note that various provisions limit the policy’s coverage and that the insured should read the policy carefully. Such limitations of liability include deductibles, coinsurance, and special limits of insurance.

The opening statements conclude with a reminder to the insured that insurance cannot be a source of profit but only a source of indemnity for actual losses incurred or for which the insured is liable

Question 2

List what is covered in each of the two ( first and second) explanatory statements if the “ guide to your policy “

Answer 2

First explanatory statement: property coverages
- the first explanatory statement describes the insurance under section 1 as consisting of property coverages, including coverage of the insureds dwelling detached private structures personal property and in certian circumstances additional living expenses

Second explanatory statements: liability coverage
- the second explanatory statement describes the insurance under section 2 as consisting of liability coverage, including coverage for the insureds legal liability for unintentional bodily injury to others or damage to their property arising out of the insureds personal actions. Section 2 includes voluntary medical payments, voluntary payments for damage to property and voluntary compensation for “ residence employees” if they are injured while working for the insured

Question 3

Business

Answer 3

Habitational policies are not meant to cover business activities that form the primary source of income for the insured. Some insurers may cover small non complex business activity in a habitational policy for no additional premium but such activity must be specified on the coverage summary page.

Question 4

Cash cards

Answer 4

Cash cards also known as gift cards store a cash value by electronic means for use as a mode of payment without a personal identification number and without access to a bank or other account

Question 5

Civil authority

Answer 5

A civil authority includes any person acting under the authority of federal, provincial, or municipal legislation to protect persons and property in the event of an emergency. The term becomes relevant under the prohibited access coverage of coverage D

Question 6

Collection

Answer 6

A collection is an accumulation of similar objects gathered for novelty personal interest rarity or value along other possibilities.

Question 7

Data

Answer 7

Data means representations of information or concepts in any form. Data can be found in something as simple as an email message or as complicated as a scientific research paper. Data can be stored in various ways such as a computer’s hard drive, flash drives, or CDs ect. Prudent insurers regularly back up data to reduce the risk of losing it.

Question 8

Data problem

Answer 8

Erasure, destruction, corruption, misappropriation, misinterpretation, of data

Error in creating amending entering deleting or using data or

Inability to receive transmit or use data

Question 9

What is a dwelling and what does it encompass ?

Answer 9

Coverage under dwelling building applies to the dwelling itself and other property on the premises. This includes structures attached to the house, such as carports solariums conservatories patio covers and decks out door swimming pools and their attached equipment and permanently installed outdoor equipment on the premises

Question 10

How temporarily removed fixtures and fittings covered what is the limit ?

Answer 10

At the insureds option up to 10 percent of the amount of insurance on coverage A - dwelling building may be applied to bidding fixtures and fittings temporarily removed from the premises for repair or seasonal storage

Question 11

How are trees and shrubs covered what is the limit ?

Answer 11

The insured can apply up to 5 percent of the amount of insurance on the insured dwelling to trees, plants, shrubs on the premises but outside the dwelling building. A sublimit is applied for any one tree plant or shrub including debris removal expenses.

Question 12

Why aren’t commercially grown vegetation covered ?

Answer 12

There is no coverage for lawns or items grown for commercial purposes because they are especially vulnerable to weather related damage

Question 13

What is the definition of detached private structure? What is allowed and what isn’t ?

Answer 13

Detached private structures must be separated from the dwelling building by a clear space or be connected to the building only by a fence utility line, or other similar connection. The structures must be private and not used for business purposes.

Question 14

What is personal property according to coverage c? What are the three types? What isn’t it?

Answer 14

The definitions clause does not define personal property. The term includes a movable or temporary property - furniture, clothing, even socks or bonds. it is the opposite of real property, which means fixed property such as land or buildings

In the policy wording, coverage see is broken down into three parts

1. Contents of dwelling and personal property owned, worn, or used on the premises
2. Property away from the premises
3. Property of a student

Question 15

name an exception to property for which the insured does not have an interval interest but is covered? Why is the coverage covered?

Answer 15

the principle of insurable interest requires the uncharred to have financial interest in insured property. The IBC homeowners forms and many other habitual forms will allow the insured to include uninsured personal property of others while on the part of the premises occupied by the insured. This is a limited gesture of Goodwill by the insurer to the insured. Visitors are not named insurance, so they cannot sue the insurer for lost they may suffer at the insurance premises.but without coverage of their own, they might sue the insured for their property damage

Question 16

Why would property of borders related to the insured be covered but not property of borders not related to the injured?

Answer 16

in practice, the insurer is likely to settle the claim directly with the owners of the damage property. Property of rumors or borders related to the insured person is included in the option; property of unrelated rumors or borders is not.

Question 17

Define temporarily away from premises. How long is temporary? What is intended and what is not?

Answer 17

the second part of coverage the covers the insurance personal property temporarily away from the premises anywhere in the world. The coverage applies to personal property temporarily removed, Weather for a few days or a few months.

Question 18

What happens if a person Burrows property from someone else and it’s lost or stolen while in the insureds care?

Answer 18

Coverage c also extends to property in the insurance possession owned by someone else, such as camera or tablet lent to the insured for a trip. Indemnity for non-owned property is not automatic - it must be specifically requested by the insured. The coverage also permits the insured to recover the cost of replacing or repairing personal property belonging to a residence employee traveling within the scope of his or her duties for the insured. property that is generally in transit or is off-premises for a limited period and then return to the principal residence.

Question 19

Note the time limit for perils other than theft. How can the insured extend the time limit?

Answer 19

coverage for personal property stored in a warehouse is not restricted to lost by theft, but is limited to 30 days for any pair of other than theft. The form does allow the insured to request an extension of that 30-day period. the insurer will then assess the additional risk involved. If it grants permission to extend coverage, it may charge additional premium.

Question 20

How is property of a student covered?

Answer 20

the definition of insured imposed no special restriction on coverage for a student who lives at home. Thus, part three of coverage C responds mainly to exposure away from principal residence. Explicitly insuring the property of an insured student temporarily living away from home avoids dispute over property loss other than the principal residence. Coverage will continue throughout the policy period.

Question 21

Explain three types of property that are excluded under coverage c explain why are they excluded

Answer 21

Three types of property are excluded under coverage c
1. Motorized vehicles or their equipment (except for watercraft, electric golf caddies, lawn mowers, other gardening equipment, snow blowers, wheelchairs, or medical scooters with more than two wheels and specifically designed to carry a person who has a physical disability, electric bicycles and electric scooters with a maximum speed of 32 km an hour or less on level ground, and electric vehicles intended for children with a maximum speed of 10 km an hour or less on level ground)

motorized vehicles or their equipment are more appropriately insured under an automobile policy

2. Camper units, truck caps, trailers, or their equipment

truck caps maybe appropriately insured as attached equipment on an automobile policy. But camper units, trailers, and other recreational vehicles are suited for vacation trailer policies

3. Aircraft or their equipment

aviation insurance is a very specialized class of insurance not offered at all in personal property policy

Question 22

What is the purpose of special limits of insurance?

Answer 22

the special limits of insurance are technically a part of personal property coverage. They are used to limit the insurers exposure to certain types of personal property that would otherwise be covered under the blanket limit for personal property.

Question 23

What three coverages are combined on coverage d?

Answer 23

Coverage d combines three coverages
1 additional living expense
2. Fair rental value.
3. Prohibited access

Question 24

What is covered under additional living expenses? How can the costs of this insurance be subsidized?

Answer 24

a lost cause by an insured peril May render the uncharted dwelling unfit for occupancy or force the insured to move out while repairs are being made. Under the additional living expense coverage, the insurer pays for any necessary increase in living expenses, including moving out expenses incurred by the insured, so that the insurance household can maintain its normal standard of living.

Question 25

What does the insured need to prove to claim Fair rental value? How can they do it? Is the insurance still covered if they do not elect to repair the damage? If so, for how long?

Answer 25

If the insurance peril renders the building unfit for occupancy, not only will the insured be displaced, but the insured may also lose the rental income paid by a tenant. even if the part of the dwelling normally held for rent is empty when the laws occurs if the insured can show that but for the loss it would have been rented the insured may be entitled to claim Fair rental value. as with other elements of a claim the insured must prove the loss. For a claim for fair rental value, proof may include rental agreements, advertising, or other similar evidence. if the insurance not to repair the damage at all, the insured may still be entitled to indemnity, but only for the time that would have been required to complete the repairs have the insured proceeded with due diligence.

Question 26

What is unique about claiming under prohibited access versus additional living expenses and fair rental value?

Answer 26

The coverage for prohibited access indemnifies for indirect loss. but unlike the coverage for additional living expense in Fair rental value, it does not require that loss or damage have occurred to the insureds dwelling

Question 27

When does prohibited access apply?

Answer 27

coverage under prohibited access applies when a civil authority, such as police or other authorized emergency personnel, government representatives, or military representatives, orders the insured dwellings occupants to move out for one of two reasons

1. a neighboring premises has sustained damage that poses danger to the insurance premises
2. a mass evacuation is required as a direct result of a sudden and accidental event within Canada or the United States

Question 28

True or false, prohibited access coverage requires that the insured peril cause the mass evacuation?

Answer 28

False, a mass evacuation is not an insured peril but a civic emergency

Question 29

List six excluded causes of evacuation

Answer 29

1. Flood
2. Earthquake
3. War risks
4. Terrorism
5. Nuclear incident
6. Radioactive contamination

Question 30

Domestic water container encompasses many objects used in a dwelling list 8

Answer 30

Hot water heating tanks and their piping and radiators
Hot water storage tanks and associated piping
Water reservoirs and dispensers whether contained in an appliance or not
Bathtubs, sinks, or toilets
Aquariums and water beds
Outdoor private swimming pools or wading pools
Ornamental pools or fish ponds and
Hottubs

Question 31

Ground water vs surface water

Answer 31

Ground water is water found in the cracks and spaces in soil, sand, and rock beneath the ground surface. It may constitute the water table or water from heavy or prolonged rain or melting snow, hail, or ice that is percolating to the water table

Surface waters - water in the surface of the ground that is not usually there. It could be due to heavy down pour if rain or rapid melting of snow or ice that cannot dissipate quickly enough. However it may also include the escape of water from any source which travels over the surface of the ground

Question 32

What forms terrorism and why? What is not encompasses in the terrorism definition ?

Answer 32

terrorism is another term to find in the policy - this time, all three of the homeowners forms so as to exclude the parallel represents. It means an ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or threat of violence or force, committed by or on behalf of any group groups organizations or governments for the purpose of influencing any government and or instilling fear in the public or a section of the public. The definition does not embrace legal protests, demonstrations, or self-expression. As well, it does not apply to individuals not acting on behalf of a group or to malicious Acts or vandalism that may occur during a lawful demonstration.

Question 33

What is the difference between vacancy and unoccupancy? What does each imply for insurance?

Answer 33

vacant refers to the circumstance where, regardless of the presence of furnishings, all occupants have moved out with no intention of returning and no new occupant has taken up residence, or in the case of newly constructed house no occupant has yet taken up residence

unoccupancy, which applies to a building with no people in it but to which people intend to return. Unoccupancy Is not unusual indwellings. Homes are an occupied whether all occupants are temporarily absent at work out chopping and entertainment events or on vacation.

Question 34

Who are we, us, our versus you, your in an insurance policy?

Answer 34

We, us, our is the company providing insurance that is to the insurer

You, your is referred to the insured