Chapters 1-3 Flashcards

Question

What are the two Basic Fire Policy Extensions?

Answer 1

1) Removal or insured property- any property the insured removes from the original location to mitigate further loss is covered (but is still subject to policy limits). This applied for 7 days from the date that property removal begins and ends at the end of the policy term, whichever is first. 2) Removal of Debris- The removal of debris is covered up to and including the policy limit, and does not go beyond that.

Answer 2

1) Electrical devices 2) Application of heat 3) War risk 4) Nuclear incident 5) Excluded property 6) Alterations and additions 7) Vacancy, Unoccupancy, Disuse 8) Volatile Substances 9) By-Laws

Answer 3

An endorsement that increases the coverage afforded by the primary policy. Perils such as windstorm, hail, smoke, and riot are extended coverages on a fire policy. R. Lewis- an acronym for extended coverage's: 1) Riot 2) Leakage from fire protective equipment 3) Explosion 4) Windstorm/Hail 5) Impact by air, space, or land vehicle 6) Smoke

Answer 4

An insurance policy that typically combines fire and casualty (or fire, casualty, and inland marine coverage's) in a single contract, such as a modern day home owners policy.

Answer 5

They are listed on the "declarations" page or the "coverage summary" page

Answer 6

A Mortgage conveys an interest in the property as a security for a debt. The mortgagor ( borrower) retains the possession and use of the property, while the lender (mortgagee) acquires an interest in the property and the right to sell if the borrower defaults on the debt. The lender must be repaid even if the property is damaged/destroyed

Answer 7

A clause in an insurance policy that stipulates the rights and obligations of the insurer and the mortgagee. • The main characteristics of this clause are that the mortgagee is granted protection in the event a loss is denied due to the actions of the insured, and in return, the mortgagee accepts responsibility to advise the insurer of any misrepresentation or change in risk of which the mortgagee is aware

Answer 8

Property described in the policy for which the insured will be indemnified should there be an insured loss

Answer 9

Protects first parties—the named insured and others with an insurable interest in or mortgage on the property or who entrust their property to the insured—against loss or damage to the insured property.

Answer 10

Liability insurance that is purchased by the insured (First Party) from an insurer (Second Party) to compensate or indemnify another (Third Party) for damage or loss for which the insured is lawfully liable.

Answer 11

Personal Lines: Insurance for individuals and families, such as private passenger auto insurance and homeowners policies. Commercial lines: Insurance for businesses, such as a commercial property or liability insurance.

Answer 12

A legal decision that serves as a basis to resolve subsequent disputes in similar cases

Answer 13

The body of previously decided cases that courts review for guidance on cases currently in dispute.

Answer 14

A law set down in a government act and passed by legislature.

Answer 15

A legal term that provides that any ambiguity in a contract must be interpreted against the person who drew the contract because they were the individuals to create the terms to which the other is bound, and so should have been as clear as possible. This term is Latin for "against the offer-er"

Answer 16

A decision made by the court, on grounds of equity, to excuse the insured in whole or in part from perfect compliance with a particular policy condition. (Marche V Halifax(2005))

Answer 17

1) Misrepresentation 2) Property of Others 3) Change of Interest 4) Material Change 5) Termination 6) Requirements after loss 7) Fraud 8) Who may Give Notice and Proof 9) Salvage 10) Entry, Control, Abandonment 11) Appraisal 12) When Loss Payable 13) Replacement 14) Action 15) Notice

Answer 18

A fact that would affect a contract of insurance enough to influence an insurers decision regarding whether to accept or reject the risk or the premium to be set.

Answer 19

A Latin term meaning " to go back to the beginning". When a policy is rejected or made " void ab initio", premium is refunded entirely as if the contract had never existed to begin with. The burden of proof in this case rests with the insurer if this is done as a result of misrepresentation.

Answer 20

The relationship that exists between two parties or more by virtue of their having entered into a contract

Answer 21

1) When an authorized assignment under the 'Bankruptcy and Insolvency Act' occurs 2) A change of title occurs by: succession, the operation of the law, or the death of the named insured. This happens automatically in both instances

Answer 22

the cancellation by the insured of a policy before its natural expiration in which the insurer returns the premium less any proportionate loss of earnings on the part of the insurer

Answer 23

The insurer is required by statutory conditions to provide notice in writing. The length of notice depends on how the notice is given: 1) The insurer may give notice via personal delivery or registered mail. When personally delivered there is a 5 day minimum with which to give notice, and 15 days notice is required when sending the notice via registered mail. The 15 day period begins following the receipt of the letter at the post office to which it is addressed. In either case, a PRO-RATA (penalty-free) refund is required.

Answer 24

The Protection of undamaged property against damage or further damage in order to keep losses to a minimum. The insurer incurs the reasonable costs associated with doing so.

Answer 25

60 days. Such an amount of time can be negotiated but must be done in writing before a loss has occurred.

Answer 26

The standard for all policies is 2 years, save for in Ontario where a Fire Policy will only be given 1 year.

Answer 27

The legal process by which an insurance company assumes the rights of the insured (after having paid out a claim) in order to recover the amount of the loss from those who are legally liable for it

Answer 28

Something unexpected or beyond the insured's ability to anticipate or control

Answer 29

An Insurance Acts that requires a policy with limits to indemnity to clearly define and mark the policy to such an effect

Answer 30

A warranty in underwriting terms would be a clause that restricts coverage specifically regarding use, condition, or maintenance of the insured property. In habitational policies, they include: 1) Alarm Warranty 2) Jewelry in a Vault Warranty 3) Backwater Valve Warranty 4) Woodstove Warranty

Answer 31

A statement, stipulation, or promise in an insurance contract, the breach of which will nullify a contract. In order for it to be enforceable, it must be material to the underwriting risk and acknowledged by the insured

Answer 32

Policy Limits are reset to their original terms after a loss occurs, meaning that if the same cause of loss were to occur, the insured would be entitled to the initial limit set out in the Dec pages.

Answer 33

it is the concept of a loss being sudden and accidental, so that it is not something that is likely to happen in the course of ordinary events.

Answer 34

a cause that, in a natural and continuous sequence unbroken by any new and independent cause, produces an event and without which the event would not have happened.

Answer 35

it is a doctrine that holds that if a loss to a property can be attributed to more than one cause, it remains payable as long as one of these causes of loss are covered in the policy.

Answer 36

ACV= Actual Cash Value. The fair market value of a property, taking into account factors that might augment or reduce the value of the property in question. ACV is calculated one of three ways: 1) Cost to repair/replace less depreciation 2) Fair market value 3) Consideration of all relevant evidence of the true value of the damage to the property.

Answer 37

coverage that indemnifies for loss or damage to insured property at the current market price rather than at a depreciated value (it is essentially a waiver of depreciation). Thus the rating and premium are calculated based on the current cost to replace the insured property in question

Answer 38

PIPEDA= Personal Information Protection and Electronics Document Act. A federal statute that governs the collection and use of personal information. It stated that personal information to be collected must be relevant and that all information that has been collected, is being collected, or will be collected must be held in the strictest confidence

Answer 39

FOIPPA= Freedom of Information and Protection and Privacy Act. It applied to all provinces save Quebec and the Territories (North-West, Yukon, and Nunavut).It regulated public bodies like provincial government, municipalities, universities, and crown corporations, as well as professional regulatory bodies such as the Law Society and the Colleges of Physicians and Surgeons.

Answer 40

PIPA= Personal Information Protection Act, which governs private sector organizations in the course of commercial business activities and contains certain provisions regarding the collection and use of electronic data. It applies to Yukon, the Northwest Territories, and Nunavut, and relates to information held by public bodies and the Department of Justice

Answer 41

The Insurance Bureau of Canada was formed in 1964. Most Canadian insurers are members. By joining, members agree to such agreements as the " Inter-company Arbitration Agreement" that allows insurers to agree to resolve disputes over losses of less than $50,000 without litigation

Answer 42

It is an insured cause of loss that can be either natural or man made. It is the event that causes loss or damage to property.

Answer 43

Generally an underwriting term that refers to the subject matter of the insurance

Answer 44

Coverage against direct physical loss or damage caused by only the listed perils

Answer 45

Coverage against direct physical loss or damage caused by any peril, provided that the peril is not excluded- a policy that is defined by it's exclusions in that it covers everything outside of a specified list of perils.

Answer 46

a set of perils identified or specified in an all risks form as applying to property that would otherwise be covered for all risks. Exclusions apply to all losses aside from those specified in a list.

Answer 47

Fire includes an uncontrolled or unintended ignition, howsoever caused. By provincial statute, a fire policy may only EXCLUDE fire if it was a result of: 1) Property undergoing a heat process 2) Riot, civil commotion, war 3) Radioactive contamination

Answer 48

A natural phenomenon produced by electrical discharge between clouds or between clouds and the ground.

Answer 49

A water hammer is the shock wave created by closing a faucet or tap. It is generally EXCLUDED from coverage

Answer 50

the coverage offered is for smoke that results from sudden, unusual, and faulty operation of any heating or cooking unit in or on the premises, but not smoke from fireplaces.

Answer 51

anything: 1) occurring while the building is under construction, even if a builder's risk endorsement is present 2) occurring while the building is vacant, even if a vacancy permit exists 3) perpetrated by the insured 4) caused by theft or attempted theft

Answer 52

Water damage must result from one of the following scenarios. It must be: 1) Sudden and accidental escape of water from a water main 2) Escape of water from within a plumbing, heating (water or steam), sprinkler, or AC system. This also includes domestic water containers such as washing machines, sinks, toilets, etc. 3) Accidental escape of water from a domestic water container located outside of the building such as a pool or hot tub 4) Entrance of water through an opening created concurrently with another insured peril ( ex: a hurricane blows off part of the roof allowing rainwater to enter the interior of the dwelling)

Answer 53

Personal property is movable, whereas real property would be things that are stationary and set, like a building.

Answer 54

1) Tenants basic form 2) Condominium unit owner's basic form 3) Residential basic form 4) Seasonal residence form

Answer 55

It extends coverage to the insured's personal property while in transit or while being temporarily removed from the premises

Answer 56

The wrongful taking of the property of another. It is a broad term and includes larceny, pilfering, holdup, robbery and pick-pocketing

Answer 57

Anything: 1) Occurring at any dwelling outside of the principal location, unless specifically insured as such 2) From any rented dwellings (by tenant, employee, or tenants employees) 3) Caused by theft of goods from a property under construction 4) Animals/ pets 5) Caused by voluntary parting, even if it was under false pretenses

Answer 58

When insuring Items that are fragile, brittle, or under the process of creation

Answer 59

it is the overflow of water (ground water- coming from below)

Answer 60

flooding caused by rain- overland flooding

Answer 61

damage cause by the backing up or the escape of water from a septic or sewer. It is excluded unless added to a policy (additional coverage)

Answer 62

No- ice damming is a typical exclusion but can be added by endorsement. It is the accumulation of ice or snow on the roof

Answer 63

there are two types of hazards: physical and moral. 1)PHYSICAL: is a physical condition, such as the storage of volatile substances on the premises. 2)MORAL: is something arising from character, interest, habits, and lack of integrity.

Answer 64

a limitation in an insurance policy on the amount of coverage available to cover a specific type of loss

Answer 65

It is the combustion that generates/ appears as light, heat, and flame. In insurance, fire coverage is specific to hostile fires.

Chapters 1-3 Flashcards

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