Chapter 6: Personal Property Insurance Flashcards
(43 cards)
When only 1 person is named as the insured on the policy and a claim is made by their “spouse” or common law partner, the insurer will agree to pay the claim when certain evidence is provided to it. Identify 3 ways in which such persons might qualify for coverage…
- prove person is married to the named insured
- person living with named insured in a relationship for a period of 3 years
- natural/adoptive parent of a child living with named insured for 1 year
Identify 4 persons included in the definition of “you” or “your” and who would be “insureds” under the policy
- person named on the policy
- spouse/partner of the named insured
- relatives that live with insured
- any person under 21 in the care of the named insured (excludes boarders and roomers = tenants)
- students attending school (must be supported by named insured if temporarily away)
Definition of “dwelling”
private residence
Definition of “premises”
land within lot lines
4 coverages provided by Section 1: Property Coverages
- dwelling building
- detached private structures
- personal property
- additional living expense
Section 2: Liability Coverage
- personal liability
- voluntary medical payments
- voluntary payment for damage to property
- voluntary compensation for residence employees
Extensions of Coverage
- debris removal - additional 5% of coverage A
- property removal - extends removal clause to 30 days
- moving to another home in Canada - covers new place & property while in transit for up to 30 days
- fire department expense - up to $1000 if need to call fire department
- change of temperature - covers indirect damage to personal property inside dwelling if dwelling was damaged by insured peril
- freezer food - provide up to $2000 when food is damaged due to “power failure” or “mechanical breakdown”
- lock replacement - up to $500 only keys are stolen and reported to police
- tear out - cost to repair walls, ceilings, etc which must be torn apart before water damage from pipes can be repaired
- arson conviction reward - up to $1000 with no deductible
- credit/debit cards, forgery or counterfeit money - $1000 max
- inflation protection - covers increased cost of replacing due to inflation
Identify the items insured under Coverage A - Dwelling Building
- dwelling and attached structures: main house + garages, carport, porches attached, etc
- permanently attached outdoor equipment: children’s swings, tree house, sprinklers
- outdoor swimming pool and attached equipment: in or above ground (ie. hot tubs)
- materials and supplies: used in construction or repairs (not for new home building)
- building fixtures temporarily removed: while at repair/seasonal storage (up to 10% of dwelling limit)
- outdoor trees, shrubs and plants: 5% of dwelling limit up to $500 per plant. Limited to fire, lightning, explosion, impact, riot, vandalism (excludes: windstorm or hail damage)
Coverage B - Detached Private Structures includes…
any structure or building separated by open space
State the 3 Insuring Agreements included within Coverage C - Personal Property
- on premises coverage: only covers “usual” property (stuff normally found in homes), excludes property belongings to roomers & boarders, covers property of others in the care of the insured (storing a friend’s stuff)
- off premises coverage: anywhere in the world temporarily away from premises
- property of students: covers if a full time student living away from home
Identify 3 types of personal property items excluded under Coverage C - Personal Property
- motorized vehicles or their equipment (ie. golf cart, ATV): except “domestic” vehicles (ie. lawnmowers, wheelchairs)
- campers, trailers or their equipment
- aircraft or their equipment
Identify 2 types of losses for which “Special Limits of Insurance” are provided
- property damaged by any insured peril:
2. property stolen or lost
Special Limits of Insurance for property damaged by any insured peril
- business property ($2000 max)
- securities ($2000 max)
- student’s property when temporarily away from home ($2500 max)
- money ($200 max)
- garden tractors and accessories ($5000 max)
- watercraft and accessories ($1000 max)
- computer software ($2500 max)
- spare car parts ($1000 max)s
Special Limits of Insurance for property stolen or lost
- jewelry, watches, gems, furs ($2000 max)
- coin/coin collection ($200 max)
- manuscripts and stamps ($1000 max)
- card collections ($1000 max)
- bicycles and equipment ($500 max)
Identify 2 coverages provided under Coverage D - Additional Living Expense
- additional living expense: covers extra expense to maintain normal standards of living due to necessary relocation after home damaged by insured peril (ie. lodging, moving, meals, kennel)
- fair rental value: pays lost rental income
- pays up when denied access by civil order due to dangerous condition caused by insured peril from outside the premises
State the basis of claim payment under Coverage D - Additional Living Expense
payment is limited to those costs “over and above” what it would normally have cost the insureds to live had the loss not occurred
3 types of Homeowners Insurance
- Basic
- Broad
- Comprehensive
Homeowners Basic Form covers…
- Fire or lightning
- Explosion
- Smoke
- Falling object
- Impact by aircraft or land vehicle
- Riot
- Vandalism or malicious acts
- Water damage
- Windstorm or hail
- Glass breakage
- Transportation
- Theft
- Electricity
Homeowners Broad Form covers…
property for Named Perils (like Basic) and buildings for all risk
Homeowners Comprehensive Form covers…
broad form + property for ALL risks
Advantages of comprehensive form
insures all losses unless specifically excluded. IE:
- smoke damage to dwelling from fireplace
- damage to dwelling from impact by vehicle driven by “insured”
- damage to carpet from spilled paint
- loss of jewelry falling down drain
Exclusions of comprehensive form
- sporting equipment due to use
- wear and tear / mechanical breakdown
- settling of building
- damage to property while being worked on if results of work
- caused by birds or vermin (building glass is insured, ie. bird strikes)
- snowslides, landslides, earthquake or general earth movement (resulting fire/explosion is covered)
- water damage
Exclusions of basic form
- buildings for business use without permission from insured
- property on display at exhibition
- property illegally acquired
- dwelling vacant more than 30 days
- property damaged by intentional act by insured or his agent
- damaged by application of heat (ie. clothes damaged in a dryer)
- release of fuel oil (ie. spill from an oil furnace)
Underwriting homeowners forms - how limits of insurance determined for Section 1 - Property Coverages
coverages are based on replacement cost value
Coverage A- Dwelling Building: replacement value
Coverage B- Detached Private Structure: +10% of Coverage A
Coverage C- Personal Property: +70-90% of Coverage A
Coverage D- Additional Living Expenses: +20% of Coverage A
Coverage E- Personal Liability: $1Mill
Coverage F- Voluntary Medical Payments: $1000 per person (no deductible)
Coverage G- Voluntary Property Damage Payments: $500 per occurrence (no deductible)
Coverage H- Voluntary Compensation for Residential Employees: as per schedule
Single Limit Policies: all of the above limits combined into 1
