CAIB 1 Flashcards

Question

Utmost Good Faith

Answer 1

The principle under law, that requires all parties to an insurance contract maintain a higher standard of honesty than is needed in other contracts

Answer 2

Insurance regulated by both the federal and provincial governments

Answer 3

1. Insurance Companies Act 2. Bank Act 3. Financial Consumer Agency of Canada Act

Answer 4

Responsible for regulating the business of insurance in their respective province and enforcing the insurance Act. -Supervising the terms and conditions of insurance contracts and enforcing good business practices/ fair treatment -Licensing all insurers operating in the province -Monitoring the financial stability of provincially licensed insurers

Answer 5

Private Insurance: Proprietary is to make a profit. Non-Proprietary are organized for reasons other than profit. They are owned and controlled by all of the policyholders to secure insurance at the lowest possible cost. There is no stock or share capital involved. e.g. Mutual insurers, profits are distributed to all of the policyholders by way of dividend payment or a reduction in premium.

Answer 6

BC Manitoba and Saskatchewan, all compulsory coverages are provided by public automobile insurance plans. In Quebec, the government administers insurance covering minimum limits for personal injury, while property damage coverage is provided by private insurers

Answer 7

A written agreement or contract between the insurer and the brokerage which acknowledges their relationship and defines the insurance broker's authority to bind coverage

Answer 8

A distribution channel where an insurance company sells its policies through its employees (licensed agents) who represent it exclusively

Answer 9

One who occupies a special position of trust or confidence in the handling or supervising of the affairs or funds of others

Answer 10

A distribution channel where the brokerage is an independent business that represents one or more insurers

Answer 11

Insurers that are organized for reasons other than profit. They are owned and controlled by their policyholders to secure insurance at the lowest cost possible. There is no stock or share capital involved

Answer 12

Insurers which exist to make a profit or return on their investment

Answer 13

Insurance Act is provincial legislation that regulates insurance contracts Level 1 is the initial license (there are 3 levels). Step licensing program is a system that requires a higher degree of knowledge for each step forward

Answer 14

- Insurance brokers must act professionally and uphold a high standard of ethics - Insurance brokers must act professionally and uphold a high standard of ethics in order to maintain their license -Do business with honesty decency of purpose, and a sincere intention to act in the client's best interest while carrying out their duties and obligations to the insurer and other insurance brokers

Answer 15

The insurance broker may become a defendant in a lawsuit from a plaintiff (their client) If the insurance neglects to place or acquire the insurance, or if the policy is void, materially deficient, or does not provide the coverage they vowed to supply

Answer 16

Insurance brokers owe a legal duty of care to their client and the insurer in every insurance transaction They must exercise good faith and reasonable skill, care and diligence when advertising their clients on the types of policies and their unique features

Answer 17

Consists of provincial, federal, and the Supreme Court of Canada. Type of court and the judicial level at which the case is handled is based on the type of legal matter and the monetary amount involved.

Answer 18

alternative dispute resolution methods, such as negotiation, mediation and arbitration

Answer 19

-Two branches are criminal and civil law Criminal law deals with wrongs against society Civil law disputes between individuals and entities that do not involve criminal acts (insurance related disputes are mostly civil)

Answer 20

Statute is written law derived from bills passed by governments Common law is a system of rules based on precedent from previous court case decisions that guide rulings on future cases

Answer 21

All individuals and legal entities have an obligation to ensure that the well-being and interests of others are reasonably protected when they engage in a specific activity that might bring harm to others

Answer 22

Landlords are NOT responsible for ensuring that a building or land rented to others is fit for the purpose for which it is rented, unless they specifically claim that it is fit for that purpose or if they conceal any adverse conditions

Answer 23

Children are contractually responsible for the bodily injuries and property damages that they cause, unless they are proven to be incapable of understanding the consequences of their actions. Age, intellect, experience

Answer 24

Not liable to pay tort unless: -Parents fail to reasonably supervise and control their children's activities -Parents allow their children to handle dangerous items -Children cause damage while acting under their parent's instructions -Children cause damage while working for their parent's business

Answer 25

Owners have a duty to prevent their animals from causing bodily injury or damage to others There is no "first free bite"

Answer 26

A deliberate act that would reasonably be expected to result in injury or damage to property of others

Answer 27

The omission to do what a reasonable person would do, or the doing of something which a reasonable and prudent person would not do

Answer 28

A doctrine in law that shifts the burden of proof such that a person is guilty until proven innocent

Answer 29

A wrong done to another in breach of a duty laid down by law but not a breach of contract

Answer 30

Or its provinciais equivalent, governs the coverages and regulatory requirements applicable in each province or territory.

Answer 31

Third Party- Liability- Legal liability for bodily injury or property damage to others Accident Benefits- Medical expenses, disability and funeral benefits following injury. Loss or Damage to Insured Automobile- Physical damage coverage including all perils, collision, comprehensive or specified perils Direct Compensation- Property Damage (DCPD) Covers damage to the insured's vehicle and contents when not at fault. (DCPD does not currently apply in the territories)

Answer 32

The application form for everywhere except Ontario is referred to as the Owner's Policy- Standard The 13 Categories of Information Required are: applicant's name and address, policy period, particulars of the automobile insuring agreements, list of drivers of the automobile, physical or mental impairment, driver history, license history, insurance history, use of automobile, business use, declaration of ownership and penalty for false statement

Answer 33

An organization that is funded by insurance companies to make automobile insurance available to all drivers who have been refused coverage by private insurers.

Answer 34

A statutory provision requiring the vehicle owner or driver to prove their financial ability to pay loses up to a certain minimum dollar amount

Answer 35

Territory: Coverage is restricted to Canada, the United States, and on vessels traveling between ports of those countries. Occupant Defined: Any person who drives the vehicle, is being carried in the vehicle, is upon the vehicle and is entering or leaving the vehicle Consent of Insured: Coverage is restricted to any person who uses the vehicle or who is an occupant of the vehicle with the consent of the owner. Provision removes accident benefits coverage from person who are injured while occupying a stolen vehicle. (applies to all passenges in the vehicle even if they weren't aware that the vehicle was stolen) Automobile Defined- Automobiles are defined in the policy by the sections of coverage provided for them.

Answer 36

Automobile Defined- Automobiles are defined in the policy by the sections of coverage provided for them. 1) The Described Automobile 2) A Newly Acquired Automobile: Vehicle or trailer you acquire as owner that is not covered under any policy. Coverage automatically extended for 14 DAYS. Must request insurance prior to the expiry of the 14 day coverage. 3) Temporary subsitute vehicles- Used if automobile in policy cannot be used because of breakdown repair, servicing etc. 4) If insured is a corporation, unincorporated, association or registered co-partnership -Just can't be owned or in the garaging business 5) Trailers: Will cover any trailer used in connection with the vehicle. Trailer does NOT need to be owned by the insured for coverage to be applied 6. Two or more automobiles: The policy response will vary when the insured owns two or more automobiles: -If they are insured with the same insurer, they are treated as if they were insured under a separate policy -If two separate both of the insured's policies will contribute to the loss 7. Motor vehicle with a trailer attached is involved in an accident: Third party liability and accident benefits coverage extends to insure a motor vehicle with one or more trailers or semi trailers attached as one automobile. For physical damage coverage, each is treated as a seperate vehicle, which means two deductibles would apply.

Answer 37

1. War Risks excluded Unless they are endorsed: 1. Insurers who are paid to use their own vehicles in their jobs are not considered to be renting or leasing the vehicle to their employers 2. Explosives radioactive etc. 3. Carrying passengers for compensation

Answer 38

- Promptly give written notice to the insurer of the accident. No time just promptly -Verify that the claim arose out of use/ operation of vehicle and by an insured under the contract -Immediately forward any letters, documentation etc. -Insureds are required to assist the insurer in their defense. When requested to doso, these costs will be paid by the insurer. 4. Requirements where loss or damage to the automobile -Promptly report all available details of the loss to the insurer in writing -Protect the vehicle from further loss or damage -Provide the insurer with a statutory declaration (proof of loss) within 90 days of the date of the accident. Insurer is NOT contractually bound to honor the claim if longer than 90 days -NO repairs other than those that are immediately necessary, and no physical evident removed without the consent of the insurer or without reasonable time for the inspection to occur - Insurer is liable for cash value of the automobile 5. Inspection 6. Time and Manner of Payment 7. Who may give notice and proof of claim 8. Termination 9. Notice

Answer 39

There is no coverage when: -They are unauthorized or unqualified to drive -Their license or right to drive is suspended or prohibited -While underage -Or any Illicit trade or transportation -In Any Race or Speed Test

Answer 40

Promptly give written notice to the insurer of the accident. No time just promptly -Verify that the claim arose out of use/ operation of vehicle and by an insured under the contract -Immediately forward any letters, documentation etc. -Insureds are required to assist the insurer in their defense. When requested to doso, these costs will be paid by the insurer.

Answer 41

1. Promptly report all available details of the loss to the insurer in writing 2. Protect the vehicle from further loss or damage 3. Provide the insurer with a statutory declaration (proof of loss) within 90 days of the date of the accident. Insurer is NOT contractually bound to honor the claim if longer than 90 days 4. Repairs other than those that are immediately necessary, and no physical evident removed without the consent of the insurer or without reasonable time for the inspection to occur 5. Insurer is liable for cash value of the automobile: Loss or damage will be determined according to the actual cash value with proper deduction for depreciation. 6. Insurer always has the option of making a settlement on cash basis or on the basis of repair of replacement. Insured must be advised no later than 7 days after the insurer has received the proof of loss. If they haven't received noticed they are entitled to be paid on a cash settlement basis. 7. No Abandonment Salvage: Cannot abandon vehicle at site of the accident without consent, even in cases of a total loss. In certain instances, insurers will permit the insured to purchase the damaged vehicle after a settlement has been made. 8. In case of disagreement, questions can be determined by an appraisal

Answer 42

Insurer is permitted to inspect the vehicle

Answer 43

1. Payment shall be made within 60 days after proof of loss of loss is received by the insurer, or when an appraisal is made as a result of a disagreement within 15 days after the decision is made by the appraisers 2. The Insured should not bring Legal Action unless: Statutory conditions 3 and 4 are complied with and the amount of the loss has been determined; or there has been a judgement against the insured after a trial of the issue; or there is an agreement between the parties with the written consent of the insurer 3. Any action against the insurer must be commenced within 2 years

Answer 44

If the insured refuses to file notice and proof of loss, a mortgagee or other party of interest is entitled to make a claim under the policy

Answer 45

The insurer can terminate the policy by registered mail, personally delivered, or electronically delivered (where permitted) -The insurer must provide a minimum of 15 days notice post office (or 30 days) The 15 days commences on the day following the receipt of the registered letter at the post office to which it is addressed. The insurer must provide 5 days date for written notice personally delivered. Cancellation: Insured cancels short rate cancellation calculation is used, subject to ant minimum retained premium (there is a fee or penalty) remainder of premium is refunded When insurer terminate it's pro rata

Answer 46

Delivered or sent by registered mail

Answer 47

Provides coverage for legal responsibility to others, for loss or damage arising from an automobile accident-causing death or injury to persons or damage to property.

Answer 48

1. Persons Insured -The named insured -Individuals who drive the vehicle with the consent of the named insured -Individuals who operate a part of the vehicle with the consent of the named insured (for example opening a car door) 2. The policy will pay when an insured is legally liable for bodily injury or property damage to a third party arising out of the ownership, use, or operation of the vehicle -NO deductible is applied to losses paid under this coverage section

Answer 49

1. Any liability imposed by any worker's compensation law upon any person insured 2. Loss or damages resulting from bodily injury to or death of any employee of an insured person while engaged in the operation, maintenance or repair of the vehicle 3. Loss of or damage to property carried in or upon the vehicle or to any property owned or rented by in the care custody or control of any person insured e.g. property that is being transported by the insured. 4. Any liability arising from contamination of property carried in the vehicle

Answer 50

1. Costs to Investigate, Negotiate or Settle Claims -covered by insured 2. Costs to Defend Any Insured under the Policy- 3. Court costs and Interest on Judgements also covered 4. Costs of Immediate Medical Aid 5. Costs of Higher Liability Limits Where the Accident Occurred: Insurer agrees to match the minimum in the jurisdiction where the loss occurred 6. Costs Due to Unavailable Defence: Cannot avoid paying a claim if in a difference province 7. The insurer agrees to reimburse the Insurer for any amounts paid under the policy: The insurer may be required by law to pay damages to an innocent third party- even if the the insured has breached a statutory condition and would not normally be entitled to coverage. They can then seek reimbursement from the insured.

Answer 51

Provides insured persons with immediate financial assistance for medical expenses and other support services resulting from injuries in automobile incidents- regardless of who was at fault. Not intended to fully indemnify but are basic coverage for medical expenses, income replacement and death benefits

Answer 52

-The Insured driver -Occupants of the insured vehicle -Pedestrians struck by the insured vehicle

Answer 53

1. The insurer will reimburse the insured for all reasonable expenses incurred within 2 years (4 years in some provinces) for: -Medical, surgical, chiropractic, dental, hospital, professional nursing, and ambulance services -Other services and supplies essential to treatment or rehabilitation Benefit may also pay for some funeral expenses

Answer 54

Death Benefits: Varies across Canada. The "head of household" is the member with the highest income in the year -Benefit of $10,000 to $50,000 is provided for the head of the household -In most of Canada, a lower survivor benefit is provided when the deceased is a spouse or a dependent Loss of Income: Insureds qualify when they suffer a "substantial inability to perform the essential duties of their occupation or employment" Conditions- Benefits are payable on a weekly basis, subject to a seven-day waiting period Insureds must be able to establish that they were employed at the time of the accident or if 18 years or over, employed for any six months preceding the 12-month period Benefits cease at end of 104 weeks Spouses are also eligible for benefits under this subsection. Benefits are usually less than those paid to a person employed outside the home at the time of the accident and are paid for a shorter period

Answer 55

When the driver of an uninsured or unidentifiable vehicle causes bodily injury or death to an insured, the insureds own policy will respond to pay the damages which normally would have been assessed against the other driver. Payment is limited to the compulsory minimum amounts for bodily injury that are applicable in the jurisdiction in which the accident occurred.

Answer 56

- Must be reported to authorities within 24 hours -Statement filed under oath with the insurer within 30 days -The vehicle must be made available Exclusions: -Suicide, Workers compensation plan, radioactive material, impaired driving, or not authorized by law to drive the vehicle

Answer 57

Agrees to indemnify the insured against direct and accidental loss or damage to the automobile, including its equipment. The following coverage options: Subsection 1: All Perils (broadest form) Also responds when the vehicle is stolen by a person residing in the same dwelling as the insured Subsection 2: Collision or Upset Restricted to only those losses caused by collision with another object or by upset . Also includes when an automobile strikes a tree, guard rail, post or any other object Subsection 3: Comprehensive Covers all losses from all perils except collision with another object or by upset Impact with animals is generally a collision loss or paid under comprehensive coverage Subsection 4: Specified Perils Too restrictive to be much value against the perils likely to cause a loss while in motion so is often for unlicensed automobiles in storage or very low valued vehicles

Answer 58

The insuring agreement provides coverage for certain impact losses, coverage is severely limited, making the comprehensive coverage less desirable as a standalone coverage NO Coverage for Loss due to: -Impact with a vehicle to which the automobile is attached e.g. trailer being towed or when insureds automobile collides with the vehicle towing it

Answer 59

Deductible is not applied to insured losses caused by fire, lightning, theft of the entire vehicle and in some cases, collisions with wildlife (further collisions see pg.148)

Answer 60

1. General Average: e.g. All insurers agree to participate the loss 2. Salvage: The insurer agrees to pay all costs incurred by the insured to save a vehicle from further loss after an accident, such as a tow truck and storage compound charges 3. Fire Department charges 4. Temporary Substitute Vehicles 5. Loss of use by theft: Insurer agrees to extend that coverage to include: -Reimbursement of up to $25 a day for a maximum of 30 days 72 hour waiting period

Answer 61

Provides the insured with compensation when their vehicle is damaged in an accident that wasn't their fault. Choose a $0 deductible Criteria: Must be determined to not beat fault or only partially at fault, based on their province's Fault Determination Rules -one or more vehicles -All vehicles must be identified and insured -Must have occurred in their home province or where DCPD is mandatory (Look at example Pg. 151)

Answer 62

A vehicle for which neither the driver nor the owner has applicable and collectible bodily injury liability and property damage insurance. Unidentified Automobile: Am automobile where the identity of neither the driver nor the owner can be determined Coverage: Only when this occurs. Also when owner of the uninsured vehicle has been identified a) Physical damage to the insured automobile -Loss or damage to contents of the vehicle b) Bodily injury or Death: The insurer agrees to pay all sums of bodily injury or death caused by an uninsured or unidentified automobile. Listed as: -Bodily Injury or death sustained while an occupant of the insured automobile or a pedestrian. Spouse and dependent relatives living in the same household. -When the insured is a business. The officers, directors, partners can all claim -Bodily injury or death sustained while an occupant in any vehicle, whether such vehicle is insured or not

Answer 63

-The amount of the payment by the insurer will not exceed the minimum statutory limits of liability insurance required to be purchased by the automobile owners in the province When injury/damage occurs in other jurisdiction, the insurer is liable for the least of the minimum automobile limit required to be purchased in the insured's own jurisdiction The insurer is not liable for the payment of claim arising out of an accident in other jurisdiction when the insured has a valid claim from an unsatisfied judgement fund or a similar fund

Answer 64

-Accident must be reported to authorities within 24 hours -A written statement of a claim must be filed with the insurer within 30 days of the accident or as soon after that period as practicable -The automobile in which the insured was an occupant at the time the accident occurred must be made available Determination of Legal Liability: A written agreement between the claimant and the insurer, Arbitration, The court

Answer 65

1) Must report to authorities within 24 hours 2) The insured must provide the insurer with written notice of the claim within 30 days after the accident or soon after that period 3) Insurers will require the insured to complete a proof of loss form detailing the event where the insured vehicle sustained the loss or damage being claimed The insured must deliver a fully detailed proof of loss to the insurer within 90 days after the accident 4) Insured must provide a medical certificate if requested 5) Insured must provide other policies (except life insurance) under which benefits may be received (see pg. 154) 8) The insurer has the right to conduct a physical or mental examination of a person insured to whom the claim relates as often as the insurer reasonably requires Autopsies as well

Answer 66

Insured must commence legal actions within two years of the date of the event A claimant with multiple contracts may not recover an amount exceeding the amount they would receive under one policy

Answer 67

Used when a vehicle is leased or rented under a long-term agreement. It extends the automobile insurance policy to recognize the leasee (individual or business renting/leasing the vehicle) as having care, custody and control of the automobile and provides them with coverage as though they were the owner Used for: -Company Vehicle leased to employees -Personal or commercial vehicles leased from a dealership or financing company -Long-term rental arrangements (non-daily)

Answer 68

For owners of classic, antique or restored vehicles, this can present a concern, as ACV may not reflect the vehicle's true collectible or appraised value. This endorsement allows the insured and insurer to agree in advance on the value of the vehicle for settlement purposes in the event of a total loss. Specific, Pre-agreed amount

Answer 69

Provides reimbursement for reasonable transportation expenses when the insured vehicle is unusable due to a covered physical damage loss Includes: -Rent of temporary replacement vehicle -Use of taxis or ride-sharing services -Public transportation costs Coverage is subject to: -Max Daily limit and a Max per occurrence limit as specified in the endorsement -Use of a substitute vehicle that is similar in type and use to the insured automobile Coverage begins: -Immediately if the damage renders the vehicle inoperable -The day after the vehicle is reported stolen to police or the insurer, in the case of theft -When the vehicle is delivered for repair -The endorsement supplements the limited coverage already included in the S.P.F. No.1 for loss of use following theft

Answer 70

Mortgage Endorsement: Endorsement is applied when a vehicle is financed and the insurer is made aware of a lienholder or mortgagee (e.g. bank or dealership with financial interest in the vehicle) Lienholder requires the insured to carry physical damage coverage (e.g. all perils, collision or comprehensive) ensuring the vehicle is protected if it is damaged or deemed to be a total loss in an insured event Also guarantees that in the event the policy is cancelled, the lienholder will receive 15 days written notice of termination The settlement will be issued to both parties

Answer 71

S.E.F NO.27: Legal Liability for Damage to Non-Owned Auto Endorsement : Not owned by the insured but are rented and leased on a short-term basis in the name of the insured Eliminates the need to purchase separate physical damage insurance from the rental agency when the insured already carries appropriate coverage under their own personal owner's policy Key provisions: Applies when the vehicle is used, stored, operated or parked in Canada or in the United States, and either of the following conditions is met: -The insured is legally liable for the damage -The insured has agreed by contract to be responsible for the damage Additional Details: -Only the insured and their spouse are covered, unless specifically listed on the policy -Only one vehicle may be rented or leased at any one time -Normally restricted to private passenger type vehicles Limitations: -Rental agreements may assign full responsibility to the renter for the vehicle's value loss of use, or diminished value, even beyond standard insurance coverage Coverage Denied If: -The vehicle is driven by an unauthorized person -The vehicle is driven outside of permitted territories -The vehicle is involved in a collision with a fixed object not typically considered a traffic hazard -Damage occurs off-road or on private land not covered under the rental contract

Answer 72

Extends coverage to the operation of recreational vehicles on: -Private property -Designated off-road trails -Other non-public highway areas -Allows coverage to apply even when the driver does not hold a valid driver's license or does not meet provincial requirements for public road use Limitations: -Does not extend to on-road- drivers must still meet licensing and qualification requirements when operating the vehicle on public highway or roads -May not apply during organized competitions or race

Answer 73

S.E.F NO.40: Fire (&Theft) Deductible Endorsement: Under the S.P.F No.1 Owner's Policy, when loss or damage coverage is purchased, it normally waives the deductible when the entire vehicle is lost due to fire or theft This endorsement reinstates the deductible, meaning the insured must contribute to the loss. Commonly applied to vehicles considered at high risk for theft or fire, such as snowmobiles or luxury vehicles

Answer 74

Removes the deduction for depreciation if a new vehicle is deemed a total loss or significantly damaged within within a specified time after purchase. Ensures that the insured receives up to the full original purchase price (or MSRP) rather than the depreciated cash value. Used by individuals buying brand-new vehicles particularly higher-valuedd vehicles Limited to actual purchase price of vehicles and does not apply to partial losses Loss or damage must occur within 24 months of the date the vehicle was first delivered to the insured

Answer 75

Provides additional financial protection when an insured person is injured or killed in a motor vehicle accident caused by a motorist who has inadequate insurance coverage. The insured can access compensation up to their own third-party liability limit, even when the at-fault driver is underinsured

Answer 76

Individuals who do not own a vehicle but: -Borrow or rent vehicles frequently -Government or sales employees who drive employer-owned vehicles -People without a personal vehicle who want to ensure they have adequate liability protection Coverage: Primary Coverage: Third- Party Liability Only Physical damage to non-owned vehicles DIFFERENT from No.27 because it offers liability protection

Answer 77

Insure garage operations and personnel who are excluded from coverage under the S.P.F. No.1- Owner's Policy. Arises from the use or care of both owned and non-owned automobiles in the course of garage business operations

Answer 78

Protects businesses against third-party claims arising from the use of automobiles not owned, leased or registered in the business's name, but which are being used in the course of business operations Responds when a company is held vicariously liable for the negligent operation of a vehicle by an employe or contractor while acting on behalf of the business Vehicle owned by an employee while on business for an employer

Answer 79

Provides increased third-party liability limits when excess coverage is required above the limits offered by primary auto

Answer 80

Standard Lessor's Contingent Automobile Policy: Businesses engaged in long term-vehicle leasing Provides contingent insurance coverage to protect the lessor (vehicle owner) when the lessee (vehicle renter) fails to obtain or maintain the required insurance outlined in the lease agreement

Answer 81

Fire insurance policies intended to provide coverage for losses arising from hostile fires only Policy will pay for damages that arise proximately, or as a natural and continuous consequence of the peril causing the loss. This includes: -Damage caused by water/ other extinguishing agents -Physical damage to building caused by fire fighters -Damage resulting from other actions to prevent the spread of fire

Answer 82

Fire, Lightning, Explosion of natural, coal or manufactured gas

Answer 83

Excluded Property: There are other more specialized coverages available for -automobiles, aircraft, and money are normally insured under more specialized policies . -War/ Nuclear Hazard Excluded Perils: Habitational insurance policies do not insure the following causes of loss: -Loss or damage due to direct application of heat -Lightning damage to electrical devices or appliances (caused directly from lightning) -Other electrical currents -Contamination by radioactive material

Answer 84

Contract shall be void as to any property in relation to which the misrepresentation or omission is material: Including: -False Description of Property (describe building as concrete when it's actually made from wood) -Misrepresentation of Material Fact: A fact which if the insurer knew about it would cause the insurer to either decline the risk altogether, charge a higher premium for accepting the risk, or add conditions to the policy when issued When the information being deliberately withheld is material to the risk, a condition of misrepresentation exists Any allegation or misrepresentation against the insured will normally occur at the time a claim is made under the policy. The onus to prove misrepresentation rests with the insurer

Answer 85

This statutory condition states that the insurer will not be obligated to pay for a loss or damage to property belonging to others. (other than the insured) Payment will be made to cover the insured's insurable interest in the property if stated in the contract

Answer 86

The insurer is liable for loss or damage occurring after an authorized assignment under the Bankruptcy and Insolvency Act (Canada) or change of title by succession, by operation of law, or by death

Answer 87

A material change is any change within the control and knowledge of the insured which: -Arises after the policy has been issued and; -Serves to increase the chance of loss When a material change is reported to the insurer they may: -Return the unearned premium and cancel the policy or -Retain the risk and advise the insured in writing of any additional premium required Only if they are aware of the risk

Answer 88

The contract may be terminated by the insured at any time or by the insurer giving the insured 15-day notice by registered mail or 5 days written notice personally delivered Prorated Cancellation: Insurer cancelled the property for a premium of $3,450. Policy premium paid / Number of days in the policy period (365) = cost per day Costs per day x number of days remaining= pro rata refund A short rate cancellation is paid in full or monthly

Answer 89

a) Give notice in writing to the insurer b) Deliver as soon as practicable to the insurer a proof of loss verified by a statutory declaration b) State how loss occurred, showing changes in title, showing the amount of other insurances and the name of other insurers (see pg.180)

Answer 90

"Any fraud of wilfully false statement in relation to any of the above particulars vitiates the claim of the person making the declaration"

Answer 91

When insureds are absent and unable to provide proof of loss, insurer is entitled to know the reason A mortgagee or other party of interest is generally entitled to file the notice of loss and proof of loss

Answer 92

The Insured shall take all reasonable steps to prevent further damage to such property and if necessary its removal Does not apply when insured is prevented by the authorities or the insured's life is placed at risk in an attempt to protect their property.

Answer 93

Insurer has an immediate right of access and entry by accredited agents sufficient to enable them to survey and examine the property In event of a disagreement an appraisal can settle Steps 1-5 Each party responsible for paying own appraiser

Answer 94

Loss is payable within sixty days after completion of the proof of loss, unless the contract provides for a shorter period

Answer 95

The insurer instead of making payment, may repair, rebuild, or replace the property damaged or lost, giving written notice of its intention to do so within THIRTY DAYS after receipt of the proofs of loss, Insurer shall commence to build repair replace etc. within FORTY-FIVE DAYS of receipt of the proof of loss They must proceed to completion as quickly as possible

Answer 96

Action: Actions against the insurer must commence within one year of the loss or damage This establishes a time limit for the insured to take legal action against the insurer. Most Insurance Acts normally prohibit any legal action to be brought against the insurer until 60 days after the filing of the proof of loss Notice: Written notice may be given to the insured named in the contract by letter personally delivered to the insured OR by registered mail addressed to the insured at the insured's latest post office address. Send to chief agency or head office

Answer 97

Notice to authorities: When loss is due to malicious acts, theft, burglary, or robbery, the insured must give notice to the police/ relevant authority No Benefit to Bailee: Bailee is a transfer or property for a limited time and precise purpose, but it doesn't involve transfer of ownership. Bailee needs their own insurance to cover if responsible for a loss Pair and Set: When there is loss or damage to only one item of pair or set, the loss is not a total loss. e.g. The insurer will only pay to replace the one that was lost out of two earrings Parts: Insurer is only liable for the cost of the lost or damaged part and its installation (e.g. may replace part of a carpet that doesn't completely match) Sue and Labour: In the event that insured property is lost, it is the duty of the insured to take reasonable steps to recover the property. The insurer contributes prorated amounts towards expenses in connection with such efforts

Answer 98

Each province's Insurance Act requires that the following details appear on every policy of insurance: -Parties to the contract -Policy Period -Loss payable or payee, if any -Type of insurance coverage and amounts for which the insurer may be liable -Rate and Premium charged -Subject matter of insurance

Answer 99

If the insured moves their property to another location to protect it or prevent further loss or damage, coverage extends to the new location for a limited period of time. Coverage is provided ONLY when preventing loss, damage, or destruction or when preventing further loss, damage or destruction The Insurance Act limits coverage at a new location to seven days or the number of days remaining on the policy, whichever comes first. The amount of insurance available for any loss to property while at unnamed location will be reduced by the amount paid for the loss at the named location Removal coverage applies only to peril of fire but Insurance companies can elect to apply these provisions to all perils and increase the time period of coverage

Answer 100

Subrogation: When another party is responsible for the loss or damage to insured property, insurers agree to allow the owners of the damaged property to claim the amount of their loss under their own insurance policy. Insurer is granted to them "the right to recover" Waiver of Term or Condition: No term or condition of an insurance contract is considered waived by the insurer unless the waiver is provided in writing and signed by a person authorized by the insurer. Broker does not have any authority to change the contract Effect of Delivery of Policy: Insurance Act states that when an insurance policy has been delivered but not paid for, it is as binding on the insurer as if the premium had been paid. Any claim will be paid. The insured's promise to pay is as sufficient to keep the insurance policy in effect

Answer 101

Most policies contain clauses that limit the amount of payment for a loss to an amount that is less than the coverage limit purchased by the insured. This means that the insured is required to pay e.g. deductible or coinsurance Following wording is printed in red "This policy contains a clause which may limit the amount payable"

Answer 102

Section 1: Property Coverage A,B,C,D Section 2: Liability Coverage E,F,G,H Stat Conditions

Answer 103

Coverage A: -Dwelling and Attached structures -Permanently installed outdoor equipment on the premises -Outdoor swimming pool and attached equipment -Construction materials located on or adjacent to the premise Coverage B: Detached Private Structures Buildings and Structures separate from the dwelling such as -Detached garage -Shed and other storage buildings -Pool house Coverage C: Personal Property Contents of the insured's dwelling and other personal property worn, owned or used by the insured Coverage D: Additional Living Expense Compensation for the insured when the property is unusable due to a covered issue

Answer 104

Includes outdoor trees, shrubs and plants. (NO plants for resale) Can only apply five percent of the amount of insurance to outdoor trees, shrubs and plants on premise There is no coverage for windstorm or hail losses Building Fixtures and Fittings temporarily removed for repair or seasonal storage. Up to 10% on things that are temporarily removed

Answer 105

Includes any structure or building separated from the dwelling by a clear space If the structure is connected to a dwelling by a fence or utility line For non-business purposes

Answer 106

Coverage for personal property owned, worn or used by the insured Includes: On-Premise Coverage- if the insured wishes coverage can be extended to include the uninsured personal property of others while it is in a portion of the dwelling occupied by insured Property belonging to roomers or boarders is not covered. Need tenant coverage Off-Premise Coverage: Provided for personal property kept in a secured storage facility for up to 30 days. But not beyond date policy expires Only temporarily removed items Property of students: Coverage is provided for property of students living away from home Special limits: special limits can be divided into two categories: -Specified property items, regardless of the cause of loss -Specified property items that have been stolen

Answer 107

This coverage applies when an insured peril damages the dwelling and the damage is sufficient to make the dwelling unfit for occupancy or requires that the insured move out while repairs are being made Payment is made only for the amount of time reasonably required to repair or replace the property. Includes: -Fair Rental Value -Access Prohibited by Order of Civil Authority (coverages does not exceed two weeks) Exclusions: Flood, Earthquake, War, Invasion, Nuclear et.

Answer 108

Many insurers offer habitational forms on a single-limit basis. Under this approach A, B, C,D are combined into one inclusive limit

Answer 109

Homeowner Forms provide coverage based on two categories-named perils and all risks The Available Homeowner Forms include Basic, Broad, Comprehensive

Answer 110

Named Perils: A peril is the cause of loss. This policy insures loss or damage only if it is caused by a peril listed on the policy. If the peril is not listed, the loss is not insured All Risks: Insures all potential causes of loss or damage unless they are specifically excluded. It is assumed that the loss is insured and the exclusions are examined to see if the cause of loss is specifically excluded. The result is much broader coverage

Answer 111

Basic: Coverage A- Named Perils Coverage B- Named Perils Coverage C- Named Perils Coverage D- Named Perils

Answer 112

Coverage A- All Risks Coverage B- All Risks Coverage C- Named Perils Coverage D- Depends on type of property directly damaged

Answer 113

All Risks for all Coverage

Answer 114

1. Fire/ Lightning: Includes damage caused by a water surge 2. Explosions: Includes explosion of hot water heaters, domestic boilers, but NOT water hammers (force that is created by water or steam when flow is restricted) 3. Smoke Smoke from fireplaces is not covered 4. Falling Objects Falling object that hits outside of the dwelling or detached private structure. Payment if made that object struck outside first 5.Impact by aircraft or land vehicle Coverage is provided for loss or damage to a building that has been hit by an aircraft or land vehicle, unless the vehicle is owned. 6.Riot All covered 7.Vandalism or Malicious Acts Refers to any act where the intent is to damage or destroy property (malicious does not always have to result in destruction of property) 8.Water Damage (Water losses excluded from coverage are freezing of plumbing. Coverage is provided if freezing occurred in portion of heated dwelling heated during usual heating season as long as the insured arranged for someone to enter or check dwelling daily if they are away for more than four consecutive days. Continuous or repeated seepage is also excluded 9. Windstorm or Hail This peril includes loss to buildings and personal property caused by windstorm, hail or coincidental rain damage. Damage to interior dwelling is also covered when able to prove that the storm created an opening 10.Glass Breakage Coverage is extended to exterior building glass, glass in interior doors, glass tiles building blocks etc. Exclusions are accidental breakage of personal items made from glass and glass that is broken while building is vacant or under construction 11. Transportation Personal property that is lost or damaged during transport in an automobile, attached trailer, or train that is involved in a collision that is upset, overturned, derailed etc. EXCLUDED: Vacation or trailer or watercraft 12.Theft and Damage caused by attempted theft: All means of taking owner's property without owner's consent Exclusions: Theft from a secondary dwelling, unless the insured is temporarily residing there Theft from a rented portion of the dwelling if theft is committed by a tenant, member of household or an employee Loss or damage to unit under construction. Loss or damage to materials and supplies for use in the construction until the dwelling is ready to be occupied 13.Electricity Sudden and accidental damage from an artificially generated electrical current. Coverage is provided for loss or damage to electrical devices caused by a sudden increase or reduction in power supply.

Answer 115

-Loss or damage caused to the dwelling and/or personal property by smoke from a fireplace -Collapse of a roof from snowload -Impact from a vehicle driven by the insured, resulting in damages to the dwelling and/or personal property -Any other losses not specifically excluded

Answer 116

Excluded Property: -Buildings or structures used for business or farming -Animals, birds or fish (unless the loss or damage is caused by a specified peril other than by an aircraft or land vehicle) -Property lawfully seized or confiscated (unless destroyed to prevent the spread of fire) -Evidence of debt or title -Data

Answer 117

-Damage to sporting equipment during normal use -Scratching, abrasion, or chipping of persona property or breakage of any fragile or brittle article (unless caused by a specified peril) -Wear and Tear -Cost of improper design/ materials -Any loss or damage occurring while vacant -Outdoor radio or tv antennae -Animals, birds or fish -Inherent vice -Loss or damaged data

Answer 118

-Rust, corrosion, wet rot, dry rot, mold etc. -Settling, expansion, buckling etc. -War -Nuclear Incident -Theft -Growing, manufacturing illegal substance -Birds, rodents, skunks etc. -Smoke from agricultural smoking -Vandalism -Contamination or pollution

Answer 119

Provides coverage for the dwelling building and detached private structures on an ALL-RISK basis and NAMED PERILS for personal property. Good option for insureds who own their home and want superior coverage on their major assets but may be less invested in their personal property

Answer 120

There is No Coverage For: -Property Displayed at any exhibition or exposition -Illegal Items -Items Contrary to the Law There is no Coverage for Loss or Damage: -After 30 day's vacancy -Resulting from criminal acts -Involving direct heat -From the discharge of fuel oil

Answer 121

An extension is a clause that broadens the scope of a coverage that is already in place. They do not change the terms of the policy. Many coverage extensions are automatically included in a habitational policy as a benefit to the insured, to enhance the coverage. There is typically no additional premium for an extension

Answer 122

1. Extensions for Coverage A- Dwelling Building 2. Extensions for Coverage C- Personal Property 3. Automatic extensions that may appear on a homeowner comprehensive form

Answer 123

1.Building Fixtures and Fittings: This extension insures building fixtures (e.g. built-in appliances, furnaces, and fitted carpets) that have been temporarily removed/ repaired . Up to 10% of the dwelling value 2. Bylaws: This extension covers the increased costs to repair or replace a dwelling because of any law that regulates the construction, demolition repair/ zoning of buildings and their related services. 3. Debris Removal: This extension pays to remove any debris that results from an insured loss. e.g. after a fire the damaged dry wall etc. If the TOTAL amount of loss (including debris removal) is greater than the limit then the insurer can provide 5% of the limit to cover the debris removal 4. Fire Department Charges Firefighting expenses if the insured is contractually obligated to pay. Limit aprox. $1,000 to $2,000 5. Home Equipment Breakdown Provides All-Risk coverage for a sudden or accidental mechanical or electrical breakdown of any home system. regardless of age. Covers loss of use and additional living expenses 6. Lock Replacement: When they are stolen. Need police report $5,000 to $1,000 Mortgage Rate Protection: This extension pays for any legal fees or extra loan repayment costs required when a new mortgage is needed after an insured peril destroys a dwelling 7. Outdoor, Trees, Plants, Shrubs: Limit for this extension is 5% of the dwellings value or $500 to $1000 per tree etc. 8. Service Line Pays for the failure of an underground water, sewer, heat, steam or electrical service line that accidentally breaks, leaks, tears etc. $10,000 to $25,000 9. Tear-Out: Covers intentional removal of walls, ceilings and other parts of the permanent structure to repair water damage caused by faulty pipes or a domestic appliance.

Answer 124

1. Change of Temperature: e.g. cold air entering broken window 2. Credit or Debit Cards, Forgery and Counterfeit Money This extension pays for the insured's legal obligation as a result of lost credit Typical coverage limits: -$1,000 for use of a debit or credit card -$1,000 for cashing a check -$200 for unknowingly accepting counterfeit 4. Freezer Food 5.Identity Theft -Defense costs for lawsuits, cost for registered mail long-distance, defense costs for lawsuits etc. -Legal costs etc, -Lost wages from time away from work up to $250 per day to a maximum of $2,500 6. Personal Records stored in a Personal Computer: Typical limit $2500 7. Property of Others (Off-Premises) Covers uninsured items that belong to others, including residence employees 8. Property of Students $10,000 9. Property of Relatives in a care facility $5,000 10. Property of Physically or Mentally Challenged Individuals $5,000 11. Property Removed Insures property that is necessarily removed to another location to protect it from loss or damage. Covered up for a specified period or time until the policy expires. 12. Safety Deposit Box $25,000

Answer 125

Increases many of the special limits of insurance under Coverage C: Personal Property, including the limits for jewelry and bicycles. Only available on the Comprehensive and Broad Forms

Answer 126

Jewelry, Watches, Gems, furs: $5,000 Numismatic Property (e.g. coins, tokens etc.): $500 Collectibles e.g. sports cards: $2,500 Manuscripts, Stamps, Stamp Collections: $2,000 Silverware: $5,000

Answer 127

The maximum amount an insurer will pay for loss or damage to a specific type of property, regardless of the overall property limit,

Answer 128

Business, books, tools and instruments: $2,500 Securities, including stocks and bonds: $5,000 Money, cash cards and bullion: $500 Garden tractors, snowblowers: $10,000 Watercraft and accessories: $2,500 Computers: $5,000 Cameras: $2,500 Cellular Phones: $500 Spare Auto Parts: $250 per item, Max $1,000 Golf Carts- $5,000

Answer 129

May be automatically included: 1. Cemetery markers or monuments 2. Inflation Protection 3. Moving to another home -Up to 30 days within Canada, or until the policy expires whichever occurs first 4. Reward coverage People providing information regarding theft. $1,000

Answer 130

An endorsement is an amendment to an existing insurance policy that changes the terms of the original policy. Issued to add, change or remove coverage Documentation that the insured and insurer have agreed to the change in terms. They can 1. Provide coverage for excluded property/perils 2. Increase limits for property subject to special limits of insurance. E.g. All habitational policies limit the amount of coverage for jewelry. The insured would add a personal articles endorsement 3. Decrease the deductible 4. Remove or restrict coverage. E.g. roof needs repair, an insurer may issue an endorsement to remove coverage for the roof until repairs have been completed. 5. Broaden coverage. e.g. add an endorsement for earthquakes

Answer 131

- Commonly used property endorsements -Miscellaneous property endorsements and other endorsement forms

Answer 132

The definition of "all risks" is broadened to include: -Marring or scratching -All sources of smoke -Earthquake -Theft by a tenant, member of the tenant's household or employees of the tenant -Flood, sewer backup, seepage or other water This endorsement contains two separate coverage sections to address the different exposures: Section A: When the object is insured at more than one location. Coverage is provided for losses incurred while transporting the object between those locations. 10% of total amount of insurance can used to pay for losses at any other location e.g. gallery Section B: Portable objects which are away from the insured's premise for prolonged periods for the purposes of exhibition, display, safekeeping, restoration etc Valued Coverage Optional: Repair or replacement is often impossible for original pieces of art. independent appraisal may be needed This endorsement provides the insured with the option of insuring fine arts on a valued basis. Both insured and insurer agree on a value. Exclusions: Breakage unless by named perils, birds vermin etc., Any process or work

Answer 133

1. Newly acquired articles: Up to 25% of the amount of insurance is provided for newly acquired articles. Limited for up to 30 days 2. Packing and Unpacking: Condition that they must be packed by competent packers 3. Reinstatement: Even when there is a loss, the amount of insurance provided by this endorsement is not reduced by the amount of that loss. Must advise within 30 days

Answer 134

Provides coverage for certain types of high-valued personal items while located anywhere in the world Two key advantages: -Increases insurance limits -Broadens coverage (can reduce or eliminate the deductible) Coverages: -Loss or damage to sporting equipment due to its use -Chipping, marring, scratching or breakage -Accidental loss or damage while being worked upon -Snowslide, earthquake, landslide -Theft by a tenant, member of household etc. -Flood sewer backup etc. Valued Coverage Optional offered Exclusions: No coverage for any musical instrument played for a fee unless permission granted by the insurer

Answer 135

Stamp and Coin Collections : -Coverage can be purchased to represent the total value of the collection, which is referred to as a "blanket limit." Total loss, limit should be purchased for 100% of the total value of the collection. Amount of Insurance Purchased/ Cash Market Value at Time of Loss= Percentage Partial Loss: Maximum amount payable is typically $250. Can go higher Newly Acquired Articles: Insurers will typically provide up to $5,000 of the type already insured. 30 days

Answer 136

Details: Government buildings and electrical codes dictate standard requirements for materials and workmanship to be used in building construction. Also Local Government bylaw. Bylaws apply to new construction or to buildings that have suffered losses beyond a certain prescribed percentage of their value. (Repair due to bylaws is excluded on homeowners) Coverage or Limitations: -A separate limit of coverage is specified for this endorsement 1. Sprinkler Bylaw Extension Insurer agrees to pay the additional cost demolition, construction or repair to comply. Limited to min amount required Requiring the installation of a sprinkler system. 2. Demolition or Construction Extension To comply with laws. Coverage applies if the insured repairs or replaces the damaged or destroyed building on the same premise with a building of the same occupancy constructed with materials of similar quality within a reasonable time after the damage Reinstatement, however must advise insurer within 30 days of any articles required to replace those which are lost or damaged

Answer 137

Canadians operating a business from their home, either full or part time. Business may be their primary job or enterprise they operate. -To qualify for this endorsement a home-based business must not earn more than a specified amount of revenue and have relatively little in the way of business property, employees and visitors. Coverages or Limitations -The home-based business endorsement includes both property and liability coverage Section I: Property Coverage on home-based business endorsement contains two coverage under Coverage C- Personal Property: business property and extra expenses

Answer 138

Property is covered both on premise/ temporarily away from the premise. Includes: -Office furniture, fixtures, equipment, computers, and licensed software -Books, tools, instruments, etc. -Business records -Cellular phones -Business property or merchandise in storage or being kept elsewhere Extra Expenses: Arising from if normal business operations are interrupted by an insured peril. e.g. BI coverage. Coverage only applies for the time it takes to repair, rebuild, or replace the damaged property. Only covers while on premise!!

Answer 139

Coverage E- Legal Liability in Section II: Personal Liability is extended to include business and business property liability. Arising out of operations of the home-based business

Answer 140

All the exclusions that apply to Coverage C- Personal Property also apply to business property unless the endorsement covers the excluded property or peril Home-Based Business Exclusions: -Loss or damage to business property that has been loaned, rented or sold (after delivery) -Loss or damage to business property on a watercraft (except a ferry) -Theft of business property by partner employee or someone trusted with it -Loss due to delay or market slowdown -Unexplained or mysterious disappearance of property -Loss discovered during inventory -Loss to property via fraud -Direct or indirect loss or damage due to a spill, discharge or seepage Section II Liability Coverage Also excludes: -Property damage to the insured product or work -Any costs associated to recall or remove a product

Answer 141

Stays of less than 30 days Coverage or Limitations: -May get a home-based business endorsement but if they don't meet criteria than they may just get a commercial policy

Answer 142

1. Earthquake No less than 10% of the total amount of insurance on the dwelling. No change to limits of insurance. Amount of premium is based on geographical location 2. Residence Glass Endorsement Accidental Glass Breakage 3. Single- Limit Coverage Endorsement Insured is allowed to apply the total coverage amounts (all Sections A, B, C, D) as needed in the event of a loss. Most insurers will allow this only if the structures are insured for their full replacement value. (see pg. 230) 4. Sewer Backup Endorsement 5. Overland Water Endorsement Freshwater entering from the ground level Not available for tidal waves, tsunamis, coastal flooding etc. 6. Vandalism or Malicious Acts Extension Endorsement Removes the exclusion under seasonal dwellings Deductible normally applies 7.Watercraft Endorsement 8. Travel Trailer Endorsement Owned trailer and their contents All-Risks basis only losses occurring in Canada and the continental United States

Answer 143

7.Watercraft Endorsement Under Section 1: Property Policy, Coverage is limited to $1,000 based on length, size etc. Additional two options available -Adding a watercraft endorsement to the personal property -Purchase a separate specialized boat insurance policy The Watercraft endorsement can be added to a personal property policy for an extra premium. The following items can be covered: -The boat including permanently attached equipment -The outboard motor -Equipment used for the operation, safety and maintenance of the vessel -The boat trailer Coverage is typically All-Risks basis Provided for transportation losses, collision with underwater rocks or objects and floating debris. In addition, the following types of loss or damage are not insured: -Caused or resulting from marine life -Wear and tear, gradual deterioration -Dishonesty of persons to whom the insured property is entrusted. -Passengers for hire -Renting it to others -For race/speed tests Basis of settlement: -Can be insured on an actual cash basis or a valued basis.

Answer 144

1. Loss Exposure Analysis Insurance brokers should complete a detailed survey of every client's loss exposure. Once the exposures are identified, an analysis of the recommended coverage form should be undertaken to ensure there are no gaps in coverage 2. Evolving Personal and Business Trends 3. Sharing Economy Renting rooms or an entire property to individuals through a website or app is gaining in popularity Habitational Properties do not cover this 4. Fractional Ownership Insurance is generally split among fractional owners and under one policy. 5. Unrelated Persons Living together Must listed as additional named insureds A claim filed by one roommate can impact on all other roommates 6. Wood-Burning Appliances 7.Conditions for Coverage of Wood Stoves

Answer 145

A system of separate ownership of individual units in a multiple-unit building

Answer 146

All provinces have special Condominium Acts dealing with the establishment and regulation of condominium corporations Every condo has its own corporation. The corporation enacts its own bylaws. Bylaws are formalized in a document known as the "declarations" The Condominium Act in each province generally requires that the condominium corporation purchases a commercial insurance policy for its building with a single amount of insurance Typically covers the main structure of the building and the common areas Specifically Covers -The Value of the Building (as it was originally constructed) including the value of those units owned by its members -The value of the common elements -Liability exposures

Answer 147

Section I: Property Coverage Coverage C: Personal Property Coverage D: Additional Living Expense or Fair Rental Value Section II: Liability Coverage Coverage E- Personal Liability Coverage F- Voluntary Medical Payments Coverage G- Voluntary Payment for Damage to Property Coverage H- Voluntary Compensation for Residence Employees Extra Property Coverage Types: Coverage U1- Improvements and Betterments Coverage U2- Loss Assessment Coverage U3- Unit Additional Protection It is the responsibility of the condominium unit owner to insure it all

Answer 148

Coverage C- Personal Property: In addition to the personal property of the unit owner, this pays for damage to the unit that results from theft, attempted theft, vandalism etc. Typical Limit $1000 which would typically be included Under Coverage A on a homeowner form. For rented condo units this covers personal property of the unit owner, which is provided for use by the renter, such as appliances and draperies Coverage D: Additional Living Expense For owned condo units the limit of this coverage is % of the Coverage C-Personal Property Limit. Coverage applies when damage by insured peril such an extent that is unfit for occupancy For Rented Units: Coverage D is replaced with Coverage D: Fair Rental Value If the rented condominium unit cannot be occupied by the renter due to loss by an insured peril, this coverage pays the insured (condo unit owner) for the loss of rental income Coverage U1: Insures any improvements and betterments made to condo owner by current or previous owners e.g. any building, structure or swimming pool on premise / all the supplies. Coverage U2: If the condo corporation insurance is inadequate to cover a loss to the common property, special assessment may be levied against each unit owner. Coverage is only provided when it is a covered loss under the unit owner's policy Coverage U3: Pays for loss or damage to the portion of the building that contains their unit, as long as the cause of the loss is an insured peril Responds after condo corps insurance

Answer 149

(see Pg. 245) Coverage C: Owner Occupied is the total value of personal effects Rented occupied- Value of the personal property supplied for use by the renter Coverage D: Additional Living Expense (owner-occupied) and Fair Rental Value (renter occupied) : Up to 20% of Coverage C Coverage U1: Up to 100% of Coverage C Coverage U2: Up to 250% of Coverage C Coverage U3: Up to 250 % of Coverage C

Answer 150

Bother Owner and Renter Occupied Basis (Named perils only) Comprehensive (Coverage for all risks, subject to exclusions) Additional Exclusions Apply to Renter-Occupied: -Vandalism/ Malicious Acts by the renter -Business activities within a renter condo unit -Loss or damage due to theft attempted theft is not covered -Room and Board Operations

Answer 151

Home that is factory built on chassis and which can be removed

Answer 152

One unique coverage extension is that it covers the expense of emergency removal of the mobile home from its site when an insured peril threatens to damage/destroy Up to 5% of the amount of insurance on the dwelling can be used to pay for expenses to remove the mobile home from the site. No deductible! Excludes the following (in addition to homeowner exclusions) -Moving the home -Conversion, embezzlement or concealment by any person in possession of the building Differences in Basis of Settlement: Personal property is settled on a replacement cost basis in the same way, however all losses to the dwelling building and detached private structures are settled on an actual cash value basis for the following reasons; -Shorter life span -Materials/Methods less durable than conventional homes

Answer 153

Coverage A: Dwelling Building - The purchase price or replacement cost Coverage B: Up to 10% of Coverage A Coverage C: Between 70% and 90% of Coverage A- Dwelling Building Coverage D: Up to 20% of Coverage A Section II: Same as homeowner or tenant policy Policy Forms: -Basic -Broad: Coverage for all risks (Coverage A,B and D) -Coverage for named perils only (Coverage C) Comprehensive -Coverage for all risks, except specific exclusions

Answer 154

For Broadened coverage: -Principal dwelling insured with the same company -Building accessible year-round by road -The building must be occupied by the owner at least once every 60 days -The building must be insured for 100% of its replacement value -The building is not rented to others -The primary heating must be a controlled furnace or by electricity Limits for Section I: Coverage A- All Risks Coverage B- All Risks up to 10% of A Coverage C- All risks up to 70% of A Coverage D-All risks up to 20% of A Exclusions: No coverage for loss or damage by change of temperature, outdoor trees etc., loss of freezer food

Answer 155

Limits for Section I: Coverage A- All risks Coverage B- All risks up to 10% Coverage C- Named perils up to 70% of Coverage A There are less insured named perils for Coverage C Optional Coverages for -Vandalism/ Malicious Acts -Burglary/ Robbery -Glass Breakage Exclusions same as the comprehensive

Answer 156

Tiny House: Typically less than 400 sqft Lakeway Home: Secondary suite a homeowner builds on their property that is separate from their primary dwelling Shipping Container House To qualify for insurance, need to meet the following five requirements: 1. Occupied Year Round 2. Built on a Permanent Foundation 3. Constructed using conventional materials and techniques 4. Equipped with central heat, plumbing, and septic systems 5. Built with permits and have passed inspections by the local building office

Answer 157

Tiny Houses: Exclusions are damage during transit and Theft of the house itself A comprehensive form may be offered if the tiny house is newer and meets the defined requirements Laneway Homes: -Can be insured under Coverage B- Detached Private Structures if limit is sufficient or as a separate building Shipping Container Homes: -More challenging to insure and require a specialty insurer due to the shipping container's rigid, impenetrable walls and limited exits

Answer 158

All occupants have moved out with no intention of returning Can also become vacant if: -Renovation before moving in -A tenant has moved out and the owner is looking for a new one Regardless of furnishing there is no coverage under this policy when the dwelling has been vacant for more than 30 consecutive days unless insurer grants permission As soon as vacant, coverage ceases for: -Theft -Broken glass -Water damage

Answer 159

Insured can apply for a vacancy permit. Still no coverage for exclusions but allows coverage to continue

Answer 160

Rented dwelling refers to longer-term rentals "30 days or more" This policy may also be referred to as "landlords insurance" Coverage A,B,C,D For C, Tenant must get their own insurance for their property Coverage D is Fair Rental Value

Answer 161

Usually only for newer dwellings that are kept in good condition Section I: Property Coverage Coverage A- All Risks Coverage B- Detached Private Structures All Risks up to 10% of A Coverage C- Personal Property Up to 10% of Coverage A Coverage D- Fair Rental Value All Risks up to 10% (see Pg. 256)

Answer 162

A rented dwelling that does not qualify for the broad form Coverage A,B,C The named perils are identical under Coverage C

Answer 163

-Theft by tenant -Vandalism -Business Activities -Room and board operations If a rented dwelling is left vacant, vacancy exclusions also apply

Answer 164

Section I: Property Coverage Coverage C -Also covers improvements or betterments made by or acquired by the tenant Damage to the tenant's portion of the building resulting from theft (limit of $500) Coverage D Section II: Liability Coverage Coverage E Coverage F Coverage G Coverage H

Answer 165

Coverage C-Set up by the policyholder Coverage D- Up to 20% of Coverage C Basic and Comprehensive

Answer 166

1. Coverage is Provided for Third-Party Only A liability policy will pay the third party when negligence is established Unintentional tort involves a careless, rather than intentional violation of another's rights 2. Insures Bodily Injury, Property Damage, and Other Direct Financial Loss Although the liability exposures that are covered differ among liability policies, the types of damages they cover are similar in nature. -Bodily injury (sickness, disease, death) -Personal Injury (mental anguish, shock and humiliation) -Property damage, including its loss of use -Direct Financial Loss 3. Payment of Damages is Limited to Those Required to Compensate Third Parties for Their Loss 4. Punitive Damages are also awarded to the court by the plaintiff if the defendant's action are so grossly negligent or intentional that they need to be punished as a warning to others They are NOT covered by liability policies 5. Nominal Damages If a tort has been committed but the plaintiff has suffered no harm then court may award a small amount of money 4. Coverage Provided on an Occurrence Basis Coverage is provided for accidents that take place when the policy is in force The max amount to be paid is described as "the function of occurrence" Occurrence can be described as -A sudden unexpected event OR an event that occurred over a long period of time Liability policies may include two separate insurance-based limits

Answer 167

The max amount that an insurer will pay for a single occurrence. Multiple claims can be made in a single occurrence, and they all count towards the same limit. The limit is automatically reset to its full amount after each occurrence to provide financial protection for full policy term

Answer 168

Maximum amount that an insurer will pay for all occurrences in a policy period. This type of limit is often used in professional liability policies to protect insureds from E&O

Answer 169

3. Payment of Damages is Limited to Those Required to Compensate Third Parties for Their Loss Assessed on a monetary basis 1. Bodily Injury (special damages) out of pocket expenses that directly result from an injury 2.Bodily Injury (general damages) no measurable monetary damage based on the severity of the injury and reflects an amount court believes is loss is necessary e.g. shock, pain, loss of future earnings etc.) 3. Property Damages Measure of loss is -The difference in the value of tangible property before and after damage; and -Actual loss incurred as a result of loss of use of tangible property e.g. the damage to structure of house after being hit by a car 4. Punitive Damages are also awarded to the court by the plaintiff if the defendant's action are so grossly negligent or intentional that they need to be punished as a warning to others They are NOT covered by liability policies 5. Nominal Damages If a tort has been committed but the plaintiff has suffered no harm then court may award a small amount of money

Answer 170

1. Legal Defense Costs When a civil proceeding is taken against an insured for actions covered by their policy Insurer choses the lawyer unless there is potential for conflict of interest 2. Insured's Expenses Insured may be asked to take time off work for the investigation Insurer provides up to $100 a day for actual loss of income Premiums for appeal bonds (when they freeze defendant's assets) 3. Court Fees When parties do not settle a liability claim out of court, the case will be decided through the judicial system (trials) 4. Post Judgement Interest

Answer 171

1. Notification Details 2. Legal Documents Provide the Writ of Summons (court document that orders defendant to answer complaint within a specified time 20 days ) Statement of Claim 3.Records 4. Investigation, Defense, and Settlement 5. Payments, Obligations and Expenses Insured must refrain from this

Answer 172

Everyone covered by Section I: Property Coverage as well as: 1. Parties having custody of the insured's watercraft or animal e.g. a family friend (except for business or if no permission was granted) 2. Residence Employee Person employed by the insured to perform duties in connection with maintenance or use of the insured's premise 3. Legal Representative If they have temporary custody of the insured's premise 4. Parties Residing on Premise After Named Insured's Death If the named insured dies and the insurer agrees to continue the policy in the name of a son or daughter, there is no coverage for a spouse if they weren't legally married. They are included as long as they still reside there

Answer 173

Insureds also have liability coverage for the following premises: -Temporary Occupancy 90 days or less -Future Principal Residence Covered from date they take possession, limited to 30 days -Cemetery plots of burial vaults -Vacant land -Land under development

Answer 174

1. Coverage provides financial protection for: -Third party claims resulting from unintentional torts -Property damage that insured is legally liable for Following circumstances - Caused by the insured's actions anywhere in the world -Caused by the condition of any premise owned, used or occupied by the insured -Caused by activities on any premise owned ..... -Injury or death of any residence employee while working for the insured Limit would at least be $1,000,000 Compensate only after found legally liable 2. Exclusions -Liabilities voluntary assumed (for the liability of a friend) -Is related to the Insured's premise -Property in the insured's care, custody and control -Insured's work -resulting from activities that are in the control of the insured -Member of named insured's household ( this would be a first-party claim) -Named insured residing elsewhere 3. Defence, Settlement and Supplementary Payments Costs are paid above and over the limit of insurance 4. Obligations of Insureds in an Occurence Provide the notification, legal documents, records, investigation and payments, obligations and expenses

Answer 175

Provides the payment of reasonable medical expenses when an insured unintentionally injures another person or if another person is accidentally injured while on insured premise. NO REQUIREMENT that the insured is legally liable for payment to be made Reasonable Expenses Include: -Surgery -Dentistry -Hospitalization -Nursing -Ambulance Services -Funeral expenses e.g. if someone tripped over own feet in your home, you could cover their injury even if you aren't legally liable Limit is $1,000 Payment isn't covered if it's already under worker's comp, hospitalization plan etc.

Answer 176

Insurer agrees to make a voluntary payment for property damage. This can occur in the following situations: 1. Unintentional Property Damage Where the Insured is not Legally Liable e.g. helping move neighbors' furniture out of house, you drop it accidentally they blame you insurer might pay 2. Intentional Property Damage Caused By an Insured 12 Years of Age or Under Your daughter purposefully kicks a soccer ball and breaks neighbors glass window Insurer will pay the claim Limit $500 Excludes: -Damage to property owned/ rented by insured -Damage covered by Section I: Property Coverage of the habitational forms Claims resulting from the loss of use, the disappearance or theft of property

Answer 177

Compensation is provided only if the insured is legally liable for their injury or death. If this is not the case, the insured can cause Coverage H to provide limited benefits for their residence employees. These benefits include: -Medical, Injury, Temporary total or permanent total disability or loss of life The limits payable and duration of payments vary with each of the above categories There is no obligation of the insured to make payment in the following instances: When they refuse to accept benefits or when the residence employee sues the insured

Answer 178

Will not pay for any third-party claims related to the following: -Intentional or Criminal Acts -Abuse, Molestation, Corporal Punishment or Harassment -Disease Transmission -Ownership or Operation of an Aircraft, Airport or Landing Facility

Answer 179

1. Watercraft and Vehicles Owned by the Insured -Watercraft equipped with outdoor motors and other attachments Equipped motor total power output no more than 12 kilowatts (16 horsepower) -Watercraft equipped with non-outboard motor and other attachments -Equipped motor(s) have a total power output of no more than 38 kilowatts Non-motorized watercraft with attachments Watercraft max length of 8 metres (26 feet) -Self-Propelled lawnmower, snowblower, and garden-type tractor 19 kilowatts Motorized golf care ONLY on golf course Motorized wheelchair no more than two wheels Can purchase additional coverage New purchased watercraft that exceeds the limit is automatically covered for 30 days 2. Non-Owned -Watercraft -Air cushioned, self-propelled land Exclusions: Carry passengers for comp Business Purposes Speed test or race Rented by others

Answer 180

3. Trailer Covered if the trailer is not attached to or being towed by a registered motor vehicle If attached it's covered by the auto policy 4. Business and Business Property PL provides limited coverage for damages caused by the following: -Activities indirectly related to the insured's occupation e.g. injury that an insured accidently causes to another in a hockey match sponsored by the insured's employer -Occasional rental of the insured's private residence (renting to a colleague's family for winter) their injuries incurred would be covered -Rental of parts of two or three family dwelling (rented unit must have no more than two occupants) Coverage is provided if the insured lives or resides in the dwelling -Rental of space in the insured's residence to others -Rental to others of spaces of stalls in garages or stables (no more than three car spaces or stalls) -Temporary business activity of an insured under 21

Answer 181

Excess Liability: E.g. The insurer may decide not to issue a policy in excess of $2,000,000 to an insured. Excess can be purchased to provide additional limits if insured feels they are needed Primary policy pays first, and then excess liability policy will pay the rest Personal Umbrella Liability -Provides a higher insurance limit to the underlying policy. It also introduces additional coverage to certain exclusions of the primary policy e.g. no coverage under primary personal umbrella will pay, as long as it doesn't have the same exclusions. "drop-down feature" Self-Insured Retention (SIR) applies to all losses covered by the Personal Umbrella Policy and which are not insured by the primary policy. Essentially functions as a deductible Usually $500 to $1,000

Answer 182

Farming is the ownership, use of land, buildings, and equipment for the production of crops or the raising and care of livestock, including all necessary operations Most insurers limit insurance to hobby farms, (a smaller farm operated mainly for pleasure not income generation) and small to medium sized professional farms that are operated as a business

Answer 183

Basic, Broad Comprehensive -Homeowners Form -Tenants Package -Condominium unit owners form -Other home type forms

Answer 184

Buildings Insured under standard policy wording include: -Barns -Workshops -Granaries -Machinery storage buildings corrals, fences, yard lights and fuel stands can also be insured Coverage types for farm outbuildings can be divided into three categories: -Fire (lightning, fire, explosion) -Fire and extended coverage, which adds the following additional perils Smoke, Riot, Falling Object Vandalism and malicious acts Impact by aircraft, spacecraft or land vehicle Windstorm or Hail Transportation Theft -Broad Form, "All Risks" (e.g. snow load, mix of commercial and habitational policies Considered broad not comprehensive like in the habitational

Answer 185

Coverage is Available on a Blanket or Scheduled Basis Blanket Basis: Most commonly purchased, one limit covers all items, 80% coinsurance requirement Scheduled Basis -Specific high value items individually listed on the policy -90 % coinsurance requirement

Answer 186

Most insurers will agree to provide coverage on a replacement cost basis when the building (s) being insured are: -Less than 15 years old -Constructed principally of new materials -On a permanent foundation -In use for the originally intended purpose Otherwise, insurer will bind on an actual cash basis

Answer 187

When a building has a specialized use insurers are concerned that the insured may not replace it after a loss. Through this clause insurers are not required to pay the full amount of insurance, instead the insured will receive an initial payment of not more than 50% of the amount payable at the time of loss They will receive the remaining 50% plus interest if all of the following conditions are met: -Building is repaired or replaced with a building designed for the same purpose -The repair or replacement is completed within nine months of the date or the loss or change -The building insured is repaired or replaced within 200 feet of the building which was destroyed

Answer 188

Fire Department: Usually it's covered, however serious fires may require assistance from neighboring jurisdictions. Debris Removal: Amount usually available if there is any insurance remaining after the loss to the insured property has been paid

Answer 189

1. Building and structures used in whole or in part for manufacturing or commercial purposes 2. Windmill, wind chargers, and their towers 3. Windstorm and Hail Damage to metal roofs

Answer 190

-Threshed Grain -Artificial Insemination Tanks and their contents -Fertilizers, herbicides and pesticides -Computers and electronic data equipment used in farming operations -Milk coolers

Answer 191

Outbuildings and Contents: Wear and tear etc. Faulty design, materials or workmanship Settling, expansion, contraction, moving, shifting or cracking Freezing Discharge or overflow of water or steam Insects such as termites or moths Vermin or rodents such as raccoons, squirrels or groundhogs Outbuildings Only: -Snowslides, earthquakes, landslides etc. -Flood, water, sprayed water etc. -Underground seepage or leakage of water -Backup of sewers, sumps, septic tanks or drains -Hail damage to any metal cover of a building (unless metal cover is punctured by the hail)

Answer 192

Deductible: Ranges from $500 to $1,000 per claim Coinsurance Clause: Most basic fire forms and extended coverage forms contain an 80% coinsurance requirement Broader or all-risk forms typically include a 90%or 100% coinsurance requirement Settlement: Fire, lightning, and explosions- ACV Fire and extended coverage- ACV Broad Form: Outbuildings Replacement cost Broad Form: contents Actual cash value Replacement cost is more expense than ACV so farm buildings must meet the requirements

Answer 193

These exposures are great- than- average and require an additional premium: -Farm tools and repair parts -Grain dryers -Irrigation equipment -Machinery used in custom farming operations Custom farming is using tools for others away from their farm premise for compensation Coverage is not provided if the tool is used for non-farming purposes

Answer 194

Coverage Available on a blanket or scheduled basis Coinsurance clause applicable -Loss of Use Extension $5,000 for a rental machine when insured machine needs repairs -Newly Acquired Machinery Extension Coverage is usually automatically extended for 30 days when additional or replacement machinery is acquired during the policy period. The limits provided under this extension can vary between users. -Replacement Cost Coverage may be applied if the machinery is less than five years old Limited waiver of depreciation for scheduled or blanket equipment : Some insurers will waive the depreciation on equipment for up to 60 months or as long as the insured is the original purchaser/ owner and maintains up to 100% of the replacement cost of the equipment . -Physical Damage away from premise as long as stays within Canada -Internal Damage by a foreign object Deductible tends to be higher

Answer 195

1. Electrical currents other than lightning 2. Mechanical breakdown 3. Property damage used for logging, forestry, brush cutting etc. 4. Damage to tires or tubes unless the loss or damage is caused by fire, windstorm, theft, etc. 5. Damage to property engaged in custom farming etc. 6.Wear tear, etc. 7. Data problem 8. Repairing, adjusting, servicing, fueling or maintenance operations 9. Harvesting equipment 10. Coupling or Uncoupling Operations

Answer 196

Deductible: Typically $1,000 but can be lowered to $200 for a higher premium Coinsurance Clause: 80 to 100% of separate or blanket values Settlement: Replacement cost generally requires that the item: Be no more than 60 to 72 months old Be insured for 100% of its replacement cost, including taxes Not be used for custom farming Not be leased to another party

Answer 197

It is important that the insured's specific type of farming can be described on the policy's declaration page at the time the liability coverage is issued (e.g. the named insured's farming operations include the production of hay and the raising of beef cattle "The boarding of horses is hereby added to the definition"

Answer 198

The persons covered include: -The Named Insured -The Insured's spouse -Relatives of either the named insured or spouse -Any person under age of 21 -Employees acting within the scope of their duties -Employees fall within the following categories: -Residence Employees -Farm Employees those who are paid for their work full-time part-time etc. to perform duties principally connected with farming activities -Farmers often help one another in busy times: persons engaged in farm related work on behalf of the insured in a neighborly exchange or which the insured is not obligated to pay any money.

Answer 199

Canada and U.S. are covered Worldwide if the injury/ damage arises out of: -Goods or products made or sold by the insured in the coverage territory -The activities of an insured person whose home is in the coverage territory described but is away for short time on business relating to operation Requirement for claims to be brought within the coverage territory. Important for two reasons: -Policy is designed in accordance with the principles of common law and should be interpreted by courts competent to rule on that basis -Helps to eliminate foreign court costs

Answer 200

Personal Liability (anywhere in world) Premises Liability Insured Premise Includes: -One- or two-family dwellings where named insured/spouse live. When other people reside coverage can be added for additional premium -Portion of any other building -All premises that named insured/ their spouse owns, rent or operates as a farm -Individual or family cemetery plots or burial vaults -Premises on which an insured is temporarily residing (e.g. vacation rental) -Vacation land owned or rented to any insured, including that one which a contractor is building a one- or two-family dwelling to be occupied by an insured -Additional farm premises

Answer 201

Farm Operations Liability: Coverage would extend to include: Cutting and bailing of hay along a municipal highway The driving of farm machinery on public roads Tenant's Legal Liability: When insured, uses, rents or occupies a premise not owned by them. Some policies automatically apply this

Answer 202

Motorized Vehicle Liability If the vehicle is old and not subject to vehicle registration. Must be on insured's premise

Answer 203

-Recreational Motor vehicles e.g. golf carts, motorized snow vehicles, all-terrain vehicles (ATVs) Most insurers provide coverage for non-owned recreational motor vehicle on/off premise but owned vehicles must be on premise -Crawlers or farm-type tractors (may go on road to get to another field) -Lawnmowers, gators etc.

Answer 204

Same as General Liability Policy (can rent out for short period of time, parking spots etc.)

Answer 205

-Defense of any civil action -All premium on bonds to release seized assets and all premium on bonds if a court decision is appealed -Expenses incurred by the insured for necessary immediate medical and surgical relief -Reasonable expenses incurred by the insured

Answer 206

1. Air cushion, vehicle or aircraft (operation use or loading) 2. Aircraft 3.Bodily injury to a farm employee other than a residence employee, if the injuries arise during the course of their employment -Farm employees tend to not have workers comp and so must sue employer -Farmers will normally purchase the employer's liability coverage form, which covers the insured from actions initiated by non-resident employees when the insured is contractually liable if tools are not good, directions aren't given clearly etc. -Voluntary compensation (employer's liability) provides no fault benefits to an employee -The limits provided under voluntary compensation vary between users 4. Damage to property owned or controlled by the insured 5. Property Damage to products manufactured, sold etc. 6. Substance released/ discharged from aircraft 7.Liability for contamination or pollution to land, water or atmosphere However must insurers agree that this exclusion does not apply when it happens by accident e.g. heat or smoke from hostile fire or accidental chemical drift

Answer 207

Medical Payment Insurer agrees to pay all reasonable medical expenses Voluntary Compensation Insurer makes a voluntary payment to owner of property -Accidentally by the insured by they are legally liable -Intentionally by insured under the age of 12 e.g. they lost neighbor's equipment Vehicle damage is excluded from voluntary compensation

Answer 208

1. Written Application Required 2.Binding Authority Insurance brokers are prohibited from binding coverage on the following types of farm risks: -Vacant or unoccupied property -Specialized buildings -Outbuildings under construction -Risks declined, cancelled or restricted by another user -Risks with prior losses 3.Minimum Premium 4. Deductible Personal property and dwelling coverage usually $500 and Agricultural buildings also 5.Additional Coverages -Agricultural produce, fertilizer, chemical floater -Farm livestock rider -Farm business interruption insurance 6. Determining the Premium

Answer 209

-Determine whether the applicants are accepted for coverage -Determine the appropriate premium for particular policies -Provide quotations and policies to insurance brokers requesting coverage -Provide information and marketing support to insurance brokers

Answer 210

-Detailed description of the item to be insured, including updates -Details of the vehicle, including vehicle identification number (VIN) and date purchased -Current valuation on the property -Appraisal for scheduled property -List of all entities that have an insurance interest in the property, including name of registered and actual owner -Credit score

Answer 211

Moral- personal characteristics of the person that could cause a peril to occur. Standards of behavior/beliefs e.g. poor credit score, previous fraudulent claim, criminal records et.c Morale- Indifference or carelessness to loss because of the presence of insurance

Answer 212

Conditions relating to the use of tangible property which could cause a peril to occur. It is a tangible characteristic or characteristic of the environment e.g. Type of building construction Age/ Condition of the property Modifications to the vehicle Proximity of the property to a body of water

Answer 213

-The application, which is a source of most of the information required -Evaluation of physical, moral and morale hazards -Evaluation of loss experience -Evaluation of external reports, such as driving records, claim history etc. -Other information gathered from previous insurers, credit reports, valuation guides etc.

Answer 214

Limits the insurer's amount of loss it might experience aT any one time. Insurance company transfers or cedes some or all of its obligations to another insurance company called a "reinsurer" Amount paid is called the "cession" the amount the insurer keeps is the "retention" An insurance company may reinsure for several reasons, including: -To increase their capacity to write business -To meet provincial Insurance Act guidelines regarding reserves to loss ratio -To reduce the effect of a catastrophic loss Reinsurance is invisible to an insured

Answer 215

Rate is typically calculated per each $100 of coverage (insurance amount x rate) / 100 For example, if the rate to insure a bicycle valued at $5,000 is $1.50, the premium would be ($1.50 x $5,000) / $100= $75

Answer 216

Amount an insured will pay to insurer to put and keep policy in effect Premium is the consideration in insurance contract Base premiums are flat dollar amounts predetermined

Answer 217

In Canada only automobile rates are regulated Property and casualty rates are set by the specific insurer and fluctuate based on emerging competition, profitability and economic climate

Answer 218

Insurers offer discounts on base premiums when an insured has taken steps to reduce the severity and frequency of claims e.g. installing an alarm system OR when they insure multiple vehicles or home and auto

Answer 219

Coverage for sewer backup is $0.015 per $100 Coverage for earthquake is $0.04 per $100 Coverage for an extra $1,000,000 in personal liability is a flat $25 Coverage for scheduled jewelry is $1.75 per $100

Answer 220

1. Insured Reports the Loss 2. Insured Broker or Insurer's Call Centre gathers Claim Information 3. Insurer assigns an adjuster 4. Adjuster investigates the claim 5. Adjuster makes a settlement decision

Answer 221

Insurer provides insured with a proof of loss form. This form is used as formal verification, sometimes under oath The insured is required to provide 1. A complete itemized inventory 2. Details of when and how the damage or loss occurred, including the date, time, and cause 3. A declaration that the damage or loss is not the result of neglect or an intentional act 4. The location of the property at the time of the damage/ loss 5. Information about other policies including the amounts and the names of the insurers 6. The insurable interest of the insured and others in the property 7. Other records and documentation, pertaining to the property, if required by the insurer 8. A complete inventory of undamaged property, showing in detail the item quantities, original purchase costs, and actual cash values.

Answer 222

- Protect property from further damage -Retaining damaged property for examination -Notify the police -Not admitting liability

Answer 223

Non-Waiver: The insured must sign to acknowledge that further investigation will proceed without determining whether loss will be covered Reservation of Rights: Similar to non-waiver but no consent is valid Estoppel: Legal term that means a court may prevent or "estop" a person from making assertions or going back on their word

Answer 224

"Basis of Settlement" -Actual cash value: replacement cost less any depreciation. no consideration is given to a property's sentimental value -Replacement cost new property of like, kind and quality. Added by endorsement -Valued basis

Answer 225

Applies to partial losses only The difference in the amount of insurance purchased and the amount paid by the insurer for the loss is referred to as a "coinsurance penalty" Coinsurance is designed to: -Pay 100% of all partial losses when the insured paid a premium to insure for the full value of the property -Determine how much the insurer will pay for a partial loss Most policies exclude any application of coinsurance when the loss is less than $5,000 or 2% of insurance purchased

Answer 226

Settlement = (Did / Should) x Loss Should (full value of item x coinsurance percentage) (see pg.322)

Answer 227

Type of accident and sickness insurance that pays the medical expenses of people who are out of their home province

Answer 228

1. Emergency Medical Plan Single or multi-trip coverage hospital, medical, paramedical expenses, transporation expenes and extra expenses (child care) 2. Trip Cancellation and Interruption Plan Emergency medical plan coverage, Trip interruption expenses When insured has left the province of residence and a trip interrupted due to the sickness or injury of an insured. Or when they can rejoin the group The insurer will also reimburse the insured for non-refundable prepaid travel costs prior to departure if they have to cancel a trup due to detah or injury or sickness preventing them from starting the trip. No preexisting condition 3. All-Inclusive Plan Most inclusive type of insurance. It covers all of the following for an unlimited number of trips over the course of the year: Trip cancellation and interruption including reimbursement, replacement of lost bags and their contents, benefits for accidental death and benefit for injury and death, expenses for return of automobile for a specified policy amount 4. Visitor to Canada Plan -to provide emergency medical coverage for vistor in Canada who is there for short amount of time -To provide emergenct medical coverage for a new resident who is waiting to be covered by a provincial plan

Answer 229

Subject to claims refusal if the insured requires emergency medical treatments for a condition that existed prior to the policy becoming effective Criteria Includes: -The condition is not newly diagnosed -The insured is receiving treatment or medication for the condition -There is no change in treatment, medication or dosage -There are no new symptoms -The symptoms are not becoming more frequent or severe -The insured is waiting for test results about the condition -There are no test results that show the condition is worsening -The insured has not recently been hospitalized or referred to a specialist

Answer 230

Insurance will terminate on the date the policy is terminated or on the date the insurance broker receives written notification from the insured cancelling the policy, whichever occurs first

Answer 231

States that the insurer receives the right to subrogate against a third party

Answer 232

The insurer must be notified within 48 hours of the date of hospitalization or emergency surgery; otherwise covered will be limited to a maximum typically $10,000 for all expenses incurred

CAIB 1 Flashcards

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