Study 3 Flashcards
(31 cards)
What is a peril in property insurance?
A peril is an event that may cause injury, loss, or destruction, such as fire, theft, or windstorm.
What is a fortuitous event?
An accidental, unexpected event beyond the control of the insured—essential for a loss to be insurable.
What is the difference between peril and risk?
Peril is the cause of loss; risk is the subject matter of insurance.
What is a named-perils policy?
A policy that covers only those perils specifically listed in the policy.
What is an all-risks policy?
A policy that covers all perils except those specifically excluded.
Who has the burden of proof in named-perils policies?
The insured must prove the loss was caused by a named peril.
Who has the burden of proof in all-risks policies?
The insurer must prove an exclusion applies.
What does the peril ‘fire’ include in IBC forms?
Uncontrolled or unintended ignition, unless caused by war, nuclear incident, or the insured.
How is lightning covered?
Covered if resulting in fire; damage to devices not caused by fire is excluded.
What is the explosion peril in IBC forms?
Covers natural, coal, or manufactured gas explosions unless caused by riot or excluded perils.
What does smoke peril cover?
Sudden, unusual smoke from faulty heating or cooking units, not from fireplaces.
What is covered under falling object?
Any object striking the exterior of a building (e.g., a falling tree or meteorite).
What does ‘impact by aircraft or land vehicle’ exclude?
Damage by insured’s or employee’s vehicles and wear-and-tear impacts.
What is included under riot?
Acts or threats of violence by 3+ people causing property damage or injury.
What is vandalism or malicious acts?
Wilful destruction of property, excluding damage during vacancy, construction, or by an insured.
What four scenarios are covered under water damage?
1) Burst water main, 2) Escape from indoor systems, 3) Outdoor container burst, 4) Entry via damage.
What qualifies windstorm or hail coverage?
Damage must be due to wind creating an opening; damage through that opening is covered.
What is transportation coverage?
Damage to personal property during collision, upset, derailment, or sinking.
How is theft defined in IBC forms?
Broad term covering taking of property, excluding theft by tenants, pets, or false pretenses.
What is the electricity peril?
Sudden, accidental damage from artificial electrical current, not wear and tear.
Are wildfire, hurricanes, and tornadoes covered?
Yes, under fire or windstorm perils in both named-perils and all-risks forms.
Is collapse covered under named-perils policies?
No, unless caused by a named peril like fire.
Is collapse covered under all-risks policies?
Yes, unless specifically excluded.
Is accidental breakage of non-glass property covered?
Yes, under all-risks policies unless excluded (e.g., fragile items).
