Study six Flashcards
(19 cards)
What does the homeowners broad from include?
- all risk coverage for buildings
- named perils coverage for contents
- has less exclusions than comprehensive because it only provides all risks for only the building
What does the homeowners basic form include?
- narrowest form of homeowners policy available
- buildings and content coverages only insure against named perils that may cause direct physical loss/damage, subject to further limitations and exclusions
- named perils are basically the same as those that apply to Coverage C of the broad form
What does the mobile homeowners form include?
- specific policy coverage similar to that of the basic homeowners policy
- a notable exclusion is loss/damage occurring while building is being moved
- all furnishings which are attached to the building are considered as part of the building rather than contents
What does the tenants form include?
- for those whom live in rented premises and require insurance for their personal property and liability
- same coverage on contents as homeowners with same limitations and exclusions
- applicant specifies amount of personal property insurance required
- additional living expense extension is equal to 20% of the personal property insurance (includes fair rental value)
- up to $500 of personal prop. ins. may be applied to pay for damage (other than fire) to the dwelling directly caused by theft/attempted theft and to the interior of the dwelling directly caused by vandalism/malicious acts
- extensions relating to property temporarily removed, loss due to temperature change and coverage on watercraft are applicable (usual deductible applies and additional coverages may be added)
- two different types of forms, comprehensive and basic, are designed on the same principles as the homeowners forms (with the exclusion of building coverage)
Explain the condominium unit owners form.
- common elements of condo are held by condo corporation which is made up of all the individual unit owners
- common areas are insured by the condo corporation under a residential condo corporation broad form which is commercial lines insurance
- unit owners form have been designed to cover owners individual units but come with certain cicumstances or needs of condo unit owner/occupier
- have 2 types, comprehensive and basic
i) improvements and betterments
- when owners make improvements to the unit, the value of the unit increases and is not insured under the common elements building policy
- the policy provides that if loss/damage to improvements/betterments is repaired/replaced within a reasonable time, using materials of similar quality to the original property, payment will be based on the actual cost of repair/replacement without deduction for depreciation
- some insurers provide limited amount automatically, but if more coverage is desired it may be purchased for an additional premium
- other insurers do not differentiate between this coverage and normal personal contents coverage
ii) loss assessment coverages
- special assessments may be levied against each unit owner under certain circumstances - if the amount available under corp. building policy is insufficient to provide complete coverage
This could occur because of:
- underinsurance
- application of co-insurance penalty
- cause of loss is not an insured peril or excluded under building policy
- breach of policy conditions
- some insurers automatically provide limited amount of loss assessment coverage, but can purchase more with additional premium
- others treat it as a seperate coverage under policy
- if the cause of the loss is one which is insured under the unit owners form, the unit owner would be able to recover the amount of assessment against him/her, up to dollar amount of insurance
iii) unit additional protection
- also pay, to the limit specified on coverage summary page, for any damage to the unit (excluding improvements/betterments), if the condo corp has no insurance, its insurance is inadequate or not effective
- if within reasonable time after the loss/damage, repairs or replacement is effected with materials of similar quality, payment will be made without deduction for depreciation
- if loss/damage is not replaced/repaired in reasonable time, payment will be based on ACV at the time of the loss
Explain the seasonal residence form.
- covers the building, personal property, or against loss/damage to property arising out of fire, extended coverage perils and electricity
- if specified on coverage summary page, could include one or a combo of, burglary/robbery, vandalism/malicious acts, and glass breakage
- burglary/robbery is NOT the broad form theft coverage found in homeowners, tenants, or condo unit owners forms
- burglary means theft of insured property following illegal and forcible entry and robbery means theft by violence or threat of violence
- up to $500 of the amount of insurance on personal property may be applied to building damage caused by burglary/attempted burglary
- usual limitations, exclusions and deductibles apply
Explain the personal articles endorsement.
- all risks coverage on specific classes of property of a personal nature is available under personal articles form
These following items may be scheduled:
- jewellry and watches
- furs
- cameras, projectors, films and equipment
- firearms
- musical instruments
- silverware
- laptop computers
- stamp and coin collections
- these items are covered under various dwelling policies, but only against loss arising out of the same perils as other contents and with limit restrictions on losses resulting from theft
- these items are easily portable, and attractive to thieves and therefore will command a higher rate of premium
- in some cases blanket coverage can be arranged subject to 100% coinsurance
- rates and minimum premiums are based on the class of property insured
- provides automatic coverage up to $5000 on newly acquired property of a class already insured under policy, but must be declared and insured within 30 days
- many items may be covered on a valued basis
- may require new valuations done by qualified appraisers every 3 years
- pictures may also be required
Describe what info is needed for cameras, projectors, films and equipment.
- name of maker, serial & model number
- special attachment described in same manner
- small, low value items may be grouped together under misc. equipment
- identification is necessary for reclaiming these types of items
- fullest possible description works to insureds advantage
Describe what info is needed for furs.
- item, type of fur, colour, style,
- any trade names referring to the type of fur or colour, any special features or markings, date of purchase, general condition
- a valuation from a furrier
- it is common for a valuation to be obtained before an insurer will insure it (especially if its high value)
Describe what info is needed for firearms.
- name, make and serial number
- insurer may also ask for additional info as to where it is kept and their intended use
- ex) hunting rifle, collector’s item, target shooting
Describe what info is needed for jewellery.
- valuations should be done by qualified jewellers or gemologists, and must contain:
1) name of item, and description as of shape, size, type of precious and semi-precious stones
2) type of precious metal, if applicable
ex) 14K yellow gold, platinum, sterling silver
3) watches
- name of maker, type of movement
- any stone in setting, engraving/inscriptions
- any identifying mark
4) pearls
- real, cultured, synthetic
- colour, size, number, quality
- graduated or uniform size
Describe what info is needed for musical instruments.
- type of instrument and its use
- rates are based on its use (personal or professional)
- professional rates vary depending on type of music played and venue it is played in
Describe what info is needed for silverware.
- maker, pattern, type, and number of items
- whether it is sterling silver, silver plate, goldware, pewterware
Describe what information is needed for stamp and coin collections.
- it is difficult to get an exact description because there are many small items involved, but a serious collector usually catalogues collection and a copy of this is ideal
- most insurers insist that any items usually over $250 be individually listed and the value specified
- good descriptions on file will be advantageous to the insured
- it is up to the insured to prove the loss satisfactorily to the insurer
- when large collections are involved, insurers will expect insured to protect the property by keeping it in a safe, vault, or having a burglar system
How is rating applied?
- different rates apply to each section of the personal article endorsement
- rates are based on each $100 of insurance for one year
- no deductible clause applies to this form
What is the fine arts endorsement?
- may insure items such as sculptures, paintings, etchings, pictures, tapestries, glassware, porcelain/china, antique furniture, other rare/historic/artistic property
- valuations must be done by qualified experts
- coverage is on an all risks basis and no deductible applies
- breakage of fragile/brittle articles is excluded unless caused by a major peril (may be deleted for an additional premium)
- if property is moved, property must be packed and unpacked by a competent professional
What is the sports equipment floater?
- designed to insure any sports equipment such as skis, fishing equipment, bicycles, and golf equipment on an all risk basis
- items are scheduled and should be fully described
- normally no deductible applies
- loss or damage due to breakage while in use may be excluded for some types of equipment
What choices of forms are available for outboard motors and boats?
- usually insured on a special form as follows:
1) limited form
- specified or named perils cover on motor and boat
- including fire, lightning, land transportation perils, land windstorm damage, and theft of entire motor/boat
2) broad form
- limited form perils plus collision while afloat
- marine perils insofar as the motor is concerned including loss of motor overboard
3) comprehensive form
- all risks physical damage coverage on motor and boat
- plus coverage up to a specified amount of insured’s legal liability (including defense costs for damage to property of others caused by accidental collision with the insured motor/boat.)
- coverage applies anywhere in Canada and the continental US while boat is use, storage, or while being transported
- accessories and boat trailers can be included
Must be identified by: - manufacturer, model, type of material, serial number, year built, overall length, power rating
- full insurance to value is enforced by a full average clause (similar to 100% coinsurance requirement, insured will bear a portion of any loss if he is not fully covered)
- coverage may be written on ACV or valued basis
- forms carry varying deductibles, but do not usually apply to fire, lightning or transportation perils
What information is required for diamonds?
- probably present the highest values in jewellery and is based on the 4 C’s:
1) Cut - round, pear shape, marquis, emerald
2)Colour - gemologists have standard colour scales against which the stones are graded
3) Clarity - imperfections may cause a cloudy appearance and reduce its brilliance
- has an effect on the value
4) Carat - the weight of a diamond is measured in points or carats: 100 points = 1 carat
- one large stone is much more valuable than many smaller ones of the same weight
- all available information must be documented
- photographs should be on file with high value items
- coverage can insure against chipping or cracking of stones, and loss of individual stones
- when large schedules of jewellery is scheduled, additional information is required
- insurers may insist on a burglar system installation, that the jewellery is to be kept in an approved safe or bank vault when not in use
