Identify four costs that are generally not covered by provincial or territorial medical plans:
Ambulance charges
family visitation
repatriation
return of a vehicle
Define risk:
the chance of financial loss to which an object of insurance is exposed.
Define Speculative Risk
risks that involve the possibility of their financial gain or loss. Like gambling.
is Speculative Risk Insured? Explain
Not insured, because there is a chance of financial gain and insurance is not designed to make someone profit.
Define Pure Risk
Risks that involve the chance of financial loss, while it does not offer the chance of financial gain.
Explain two functions of the IBC and justify how these benefit both insurers and the public.
collects insurance statistics,
Provides actuarial analysis
Drafts policy forms
Manage inter-company agreements for claim settlements
These functions helps insurers by ensuring stability and standardization, and it also benefits the public by helping maintaining fair practices and consumer protection.
What are 2 ways insurance is distributed in Canada
Direct Writer: insurance company employs their own sales force to sell their products
Independent broker: a broker selling insurance products in exchange for commission. a broker may represent many insurers. Clients belong to broker.
Explain the Mutual Insurance Company
Is owned by its policyholders, who may receive dividends when there is a surplus, but may also be assessed for additional funds if the company suffers a loss.
Explain Stock Insurer
Owned by shareholders, profit driven with losses absorbed by shareholders rather than policy holders.
Explain how mutual companies handle financial shortfalls compared to stock companies.
When a mutual company suffers financial shortfalls, policyholders may be assessed to make up the deficit. In a stock company, financial losses are borne by shareholders.
When a mutual company suffers financial shortfalls, policyholders may be assessed to make up the deficit. In a stock company, financial losses are borne by shareholders.
When a mutual company has a surplus, policyholders benefit through dividends, whereas in a stock company, shareholders benefit.
Define the Principle of Indemnity
The principle of indemnity means that insurance is designed to put the insured back in the same financial position as before the loss, no better and no worse. Claim payments are based on the value of the insured property or interest immediately before the loss.
3 main types of property and casualty insurance.
Automobile
Property Insurance
Liability Insurance
Describe the three (3) types of misrepresentation recognized in insurance law
False description of property,
misrepresentation of a material fact
fraudulent omission of a material fact
The meaning of insurance is
An undertaking by one party to indemnify another if a specific peril damages an object of insurance
CO-INSURANCE FORMULA
(Amount Carried / Amount Required (Property value x co%)
Loss = Claim Payout
What is the primary purpose of a deductible clause in a property insurance policy?
To eliminate small claims and help control premiums
Describe a broad form policy
A Broad Form (or All Risk) policy covers all causes of direct physical loss to property except those that are specifically excluded in the policy wording.
ACV Formula
ACV = RC - Depreciation
Explain the Standard Mortgage Clause
Guarantees payment to mortgagee when insured is denied coverage due to breach of conditions. It also requires the insurance company to give notice to mortgage before reducing or terminating coverage
Explain what “loss assessment” coverage is available for an insured who has Condo Owners Insurance.
loss assessment coverage provides payment when the strata’s insurance policy isn’t enough to cover losses to common elements.
Explain the dent clause under the Mobile Home Form
The dent clause requires siding to be torn or punctured. not just dented.
