C 12 Insurance on Property Download

1. C12 - Chapter 1 STATUTORY REQUIREMENTS.pdf   View
   Download
2. C12 - Chapter 2 Fire Insurance Statutory Conditions (Common Law Provinces).pdf View
   Download
3. C12 - Chapter 3 Fire Insurance General Conditions (Quebec).pdf View
   Download
4. C12 - Chapter 4 - Quiz Fire Insurance Contracts - Clauses; Limitations.pdf View
   Download
5. C12 - Chapter 4 Fire Insurance Contracts - Clauses, Limitations.pdf View
   Download
6. C12 - Chapter 5 Broadening the Contract – Additional Principles and Perils.pdf  View
   Download
7. C12 - Chapter 6 The Residential Basic Form.pdf  View
   Download
8. C12 - Chapter 7 The Package Policy Concept.pdf View
   Download
9. C12 - Chapter 8 Other Package Policies.pdf View
   Download
10. C12 - Chapter 9 Other Habitational Coverages.pdf  View
    Download
11. C12 Complete Notes 13 Pages Long.pdf  View
    Download
12. C12 - Supplement Topics Insurance on Property View
    Download

Donwload the latest uploaded file - July 2012

C12: Download

C12 - Chapter 1

Terms	Definitions
What book of the Civil Code of Quebec is concerned with obligations?	book 5
Describe the conditions in which a contract is deemed to have been made "in province."	1. subject of contract is property in the province 2. resident of province has insurable interest
What nine pieces of information must every policy contain?	1. name of insurer 2. name of insured 3. name of person whom insurance money is payable to 4. amount of premium for the insurance 5. subject matter of insurance 6. indemnity which the insurer is liable 7. the event on the happening of which liability is to accrue 8. effective date of insurance 9. expiry date of insurance
If two appraisers cannot resolve a dispute between an insurer and an insured, who determines the outcome of the disagreement?	an umpire is assigned
When can a contract term be waived in whole or in part by the insurer?	when a waiver is stated in writing
How may an insurer respond to an unpaid premium?	insurer may terminate contract after giving 15 days notice by registered mail
How many days must pass after proof of loss before an action may be brought for recovery of money payable under a contract of insurance?	60 days must pass
In the Insurance Act, what is excluded in the description of loss against fire?	1. goods undergoing application of heat 2. riot, war, rebellion etc.
Describe the conditions in which fire insurance would not cover damage caused by an explosion.	not covered if the cause of explosion was due to riot, war, rebellion etc.
If property is removed from the premises to prevent loss or damage, is that property still covered under a contract of fire insurance? Explain.	provincial insurance acts extend coverage to insured property if it is needed to be moved to prevent damage or further damage
Why is an insured obliged to take all reasonable steps to minimize loss?	insured receives no more than the insured amount
What provisions help ensure that the insurer is not placed at a disadvantage while helping the insured minimize loss?	automatic extension applies for no more than 7 days from the time property is removed.
Define distribution.	splitting of a single amount of insurance to apply to property in more than one location
Describe the two conditions upon which the distribution provision is based.	1. amount of insurance is only the difference between the original amount of insurance and the amount of loss already suffered when it was removed 2. if the amount of loss is equal to or greater than the amount of insurance, the full amount is payable
What are the benefits of written applications?	reduces misunderstanding
Why do insurers use custom applications for certain kinds of insurance contract?	it makes it easier for the insured to see what options are offered and allows insurer to be aware of requests for variation in the terms of customary contracts
If an insurer issues a policy on different terms than the application and advises the insured accordingly, but the insured does not reject the contract within two weeks, what options does the insured have?	the insured cannot reject the change in terms but only can terminate the application
Explain limiting clauses and what is required for them by the Insurance Acts.	limits recovery by the insured to a specified percentage of the value of property at the time of loss. insurance at requires that policy be marked to that effect.
When more than one of an insured's contracts contain a deductible, how are the insurers' shares of a loss determined?	each insurer is liable to the insured for its rateable proportion of the loss.
Describe the three conditions on which the insurer may avoid a contract for misrepresentation.	1. falsely described property to the detriment of the insurer 2. misrepresented any circumstance material to the insurer's assessment of the risk 3. fraudulently omitted to mention such circumstance
What must an insurer prove in order to avoid a contract for omission of a material circumstance? Why?	an insurer must prove material fact
Why have the courts found Statutory Condition 2 difficult to apply?	the condition does not define the word "owned"
What differentiates Statutory Condition 4 from Statutory Condition 1	the difference is that stat 4, false material facts are given during the policy term
If an insurer cancels a policy, how is the insurer's pro rata share of the policy premium calculated	it is unearned premium minus earned premium
According to Statutory Condition 7, how is fraudulence determined	the onus is on the insurer to prove fraud
How does Statutory Condition 9 maximize the value of the insurer's salvage rights	it obligates the insured to protect damaged property from further damage

C12 - Chapter 2

Terms	Definitions
What five elements are embodied by the insuring agreement?	1. an agreement  2. between legally capable parties  3. for the consideration 4. demonstrating intent 5. to do something legal
What is the principle of indemnity?	to return a loss to its original financial position prior to the loss. no profit from loss.
Define proximate cause.	the effective cause in a chain of events that leads to a loss
Describe the two primary ways insurers adapt the Basic Fire Policy to their own purposes.	1. specific policy - builds on standard policy by including agreement, exclusions and limitations and stat and general conditions 2. modular policy - sum of several parts, each page containing a portion of the contract
Define indirect loss and state the most common type of indirect loss.	a consequential loss. most common form is business interruption e.g. loss of income
Why is it important for an insured to accurately describe the location of movable property?	to prove a loss, the insured must demonstrate the property damaged is the property described in the policy
What is the difference between one item and one object? Provide an example.	an item could be more than one object. e.g. office equipment could include multiple items
Define occupancy in the context of an insured building or structure.	it is the function of the building
How does the Basic Fire Policy give effect to the principle of indemnity?	it makes the amount payable to the insured the least of 1. actual cash value of loss (cost of replacement) 2. interest of the insured in the property 3. amount of insurance
When assessing the actual cash value of lost or damaged property, how is depreciation determined?	it is determined by several factors including physical conditions, resale value, life expectancy, market prices
Describe the circumstances in which loss of or damage to electrical devices or appliances is excluded.	loss is excluded if damage to devices or appliances is caused by lightning or other electrical currents
How does the Application of Heat Exclusion apply when fire spreads beyond the excluded property?	coverage applies if fire spreads, goods damaged under application of heat is excluded
Describe the types of event that would be listed under the War Risks Exclusion.	civil war, terrorism attacks etc.
What is the purpose of the Nuclear Liability Act?	the licensed operator of a nuclear installation has absolute liability regardless of fault for damage or injury to other other person or their property
What steps should an insurer take to avoid using ambiguous wording in an insurance contract?	have people responsible for issuing policies to have a thorough knowledge of their company's "standard" wordings
Under the Additions or Alterations Exclusion, what type of loss or damage is covered, and what type is excluded?	normal repairs are covered while major work e.g. construction, welding is not.
What is the significance of the word "while" to the Vacancy, Unoccupancy, Discuss Exclusion?	coverage is temporarily suspended while it is occurring
Explain the difference between unoccupancy and vacancy.	unoccupied - occupants are vacant but intend to return vacancy - absence of all occupants, none of whom intend to return
Define the flashpoint of a liquid.	the lowest temperature in which vapours from a liquid upon contact with a spark can ignite
What are the arguments for and against coverage of loss or damage caused by by-laws?	for: bylaws only take effect in a loss, insurers should cover against: independent of insured peril, similar to indirect loss

C12 - Chapter 3

Terms	Definitions
How is the rate of premium calculated for fire insurance policies?	it is commonly expressed as a rate per $100 of the amount of insurance or percentage.
How has public fire protection changed premiums charged to insureds?	larger cities with more sophisticated water networks lowers the chance of a complete destruction of building by fire.
How does the construction of a building affect the premium charged to insureds?	buildings made with highly combustible materials attract a higher rating.
Describe the four different ways a deductible may be applied.	it may be applied separately, on occurrence basis, above a threshold or a variation of a threshold
What is the purpose of coinsurance?	it obligates the insured to maintain a specified minimum of insurance in relation to the value of the property insured or else share in a partial loss.
Describe the coinsurance formula.	amount of insurance carried/minimum amount of insurance required * amount of loss = amount recoverable by insured
Why is it important for insureds to consider the effect of inflation on property values when deciding how much insurance to buy?	if inflation increases their home prices and they do not increase their insurance, then they may be uninsured and face a coinsurance penalty at the time of partial loss.
Why do property policies often include a Waiver of Coinsurance for small losses?	in small losses, it is not economical to calculate the actual cash value to determine if a coinsurance clause applies. waiver normally waives coinsurance clause for losses less than 2% or $5000.
What is the difference between the Stated Amount Coinsurance clause and the standard Coinsurance clause?	the minimum amount of insurance is specified in dollars rather than as a percentage of actual cash value insured.
When does the Stated Amount clause usually expire, relative to the policy? Why?	it expires 3 months after the policy expires. this allows time to confirm values for the renewal term.
Describe the circumstances in which an Average Distribution clause might replace a Coinsurance clause.	in instances of manufacturing or processing, the contents of each building is hard to determine. average distribution covers the building under a blanket basis.
How does a Deferred Payment clause affect an insured in the case of loss of a building?	the insured is only partially indemnified until the building is fully repaired. then the rest of the loss payment is given.
What is the difference between a mortgage and a chattel mortgage?	when the security is real property, the loan arrangement is called a mortgage. when the security is personal property, it is called chattel mortgage.
Define loss payee.	mortgagees are considered loss payees. cheques issued in a loss are drawn jointly in the names of the insured and the loss payee.
How does provincial legislation protect the interests of loss payees?	the insurer may not cancel or alter a policy without a notice to the loss payee.
What is the main benefit of a Mortgage clause for the mortgagee?	it covers the mortgagee even if the named insured is unable to recover due to a breach of contract. a separate contract between the insurer and mortgagee is made.
How does the Mortgage clause amend Statutory Condition 8 in the common law provinces?	it gives the mortgagee the right to give notice of loss to the insurer
Describe the evolution of the wording of Mortgage clauses.	many different wordings on mortgage clauses. the IBC created a mortgage clause which was accepted by almost all lending institutions. This clause is standard today.

C12 - Chapter 4

Terms	Definitions
How is time of loss relevant to assessing actual cash value?	time of loss is essential as values fluctuate. the cost of placing destroyed property after a loss may be different from the cost at time of loss.
Describe the different kinds of depreciation.	physical - wear and tear marketing - the value an automobile, rate of depreciation is negotiable
What is the practical purpose of a fair basis for indemnity?	it can prevent a moral hazard of an insured recovery than the actual value of damged or destroyed goods.
In commercial insurance, what are the five conditions for replacement cost?	1. replacement must be made promptly 2. replacement must be on the same site or an adjacent site 3. payment will be limited to the cost of replacing, repairing, constructing or reconstructing on the same site 4. settlement will be made only when the work is completed and no more than the actual cost of the work 5. all other insurance covering the same perils must have the same replacement cost provisions
What is the outcome when an insured fails to meet any of the conditions for replacement cost?	a loss will be settled at actual cash value
Describe the evolution of automatic reinstatement.	insured had multiple losses in a policy term, the earlier losses led to the insured being unprotected against future losses. insurers had to charge higher premium. many insurers agreed to reinstate insurance automatically at no additional premium.
What are the two important features of the IBC wording of the Automatic Reinstatement clause?	1. amount of insurance unchanged throughout policy period even if losses are paid 2. if insured cancels policy after a loss, the insurer must return premium for unexpired part
Define stock.	understood as goods and merchandise that the insured manufactures or acquires that is usual to the insured's business.
What is the purpose of a declarations form?	ensures that stock will be fully covered at peak values stated in the form.
How does an insurer calculate the deposit premium for a business with distribution warehouses in scattered locations throughout the country?	if the total earned premium is greater than the deposit, the insured is charged additional premium for the difference. vice-versa a refund is given.
How does an insurer calculate the average value at each location for a business with distribution warehouses in scattered locations throughout the country?	the sum of reported values is divided by the number of locations to determine the average value of each location.
What six additional perils are commonly included in the property policies issued by most insurers?	- explosion, impact by aircraft and land vehicles, riot/vandalism, smoke, leakage from fire protective equipment and windstorm/hail
How do additional perils affect premiums? Explain.	insurers charge additional premium for added perils
Why is the explosion of natural, coal, or manufactured gas exempted from the exclusions in the Explosion peril?	such losses are part of the fire coverage under the Insurance Acts of common law provinces
Why are chemical recovery boilers and smelt-dissolving tanks typically excluded from coverage?	excluded because they present a greater than average explosion hazard.
Is it possible to include them in a policy?	may be added by an endorsement.
How do owners of commercial buildings secure insurance for a domestic water heater when they often don't have boiler and machinery insurance?	common for insurers to make exclusions for domestic water heaters having a diameter not exceeding 610mm.
What types of occurrence are identified by the second set of exclusions under the Explosion peril?	refers to direct damage caused by the explosion, rupture or bursting.
The Impact by Aircraft, Spacecraft, or Land Vehicle peril expands coverage to include what additional source of damage?	expands to include "buildings"
Define riot.	an act or threat of violence by one or more persons who are a part of an assembly of 3 or more person that might give rise to damage to property or injury to persons.
How are insurers affected by the fact that courts have ruled theft a malicious act?	it has forced insurers to pay theft claims under policies that did not cover theft but covered malicious acts. insurers now exclude theft from the peril of vandalism or malicious acts.
What three elements trigger coverage for damage from smoke?	sudden, unusual and faulty operation will trigger the coverage
Define leakage from fire protective equipment.	leakage or discharge of water or other substances from within the equipment used for fire protection purposes for the "premises" described.
Describe the two exclusions that establish the scope of the Windstorm or Hail exclusion.	damage to the interior of the building or to contents is covered only if damage occurs at the same time as and results from an opening caused by the windstorm or hail.
What is the purpose of the extension of policy coverage applicable to windstorm damage?	it relates to the cost of removing windstorm debris. will apply to the cost to remove debris of insured property that results from loss or damage by the insured peril.
What three endorsements are generally used to extend fire policies to cover water damage?	water escape, sewer backup and flood.
What cause of damage is excluded from coverage of building collapse?	earth movement of any kind.

C12 - Chapter 5

Terms	Definitions
Why is it unfair to the first insurer when an insured purchases two policies?	a loss by additional peril for the full amount of the first policy's limit was unfair.
What steps did insurers take to combat this problem?	insurer's added an other insurance clause to their policies to pro rate an additional perils loss between multiple policies.
What is the purpose of the Insurance Bureau of Canada's Agreement of Guiding Principles?	clarifies multiple insurance policies where practice departs from stat specs, where law is unclear, where gaps exist in the law, or in unusual or disputed circumstances
Describe the unique difficulties of insuring against earthquakes.	earthquakes are unpredictable, the spread of risk is narrowed and the chance of catastrophic loss is greater
What determines whether an earthquake and a series of aftershocks are considered one event?	all shocks within a 168 hour period are considered a single event.
Define land subsidence.	is a sudden falling in of the ground, often caused by the extraction of minerals or water from the earth.
Name five different kinds of theft.	- conversion (entrusted property) - mysterious disappearance - theft from vehicle - break-in - theft by trick
What is the difference between mysterious disappearance and unexplained disappearance?	object cannot be located or accounted for mysterious disappearance may appear in policy wordings as part of an exclusion but unlikely to be included as an insured peril, unexplained disappearance is a clearer alternative term.
How is premium determination for theft insurance different from premium determination for fire insurance?	the difference is in the details. fire - always a risk of total loss, theft - rarely total loss.
What is graded rating?	different layers of loss with the higher rate at the first layers. each successive layer is larger than the layer below it.
Name three factors that affect the premium for insuring property in transit.	1. insurer's limit of liability for property in transit 2. perils applying to such property. (many perils possibilities) 3. the probable frequency of loss
Why do insurers use the term named perils to describe multi-peril contracts that combine a number of perils beyond fire and the additional perils?	helped to distinguish from policies in which every insured peril is listed from other policies written on all risks basis.
Explain the difference between named perils and all risks.	named perils state which losses will be covered all risks state which losses will not be coeverd
Describe the conditions in which wilful acts may still be covered.	may be still covered if the act was unintentional unless proven that the insured was aware of consequences of the acts or acted recklessly.
What four different aspects of the contract do exclusions in an all risks policy deal with?	property, locations, events, direct loss.
What events or circumstances would be considered indirect or consequential losses?	delay, loss of market, loss of use, loss of occupancy
What is the purpose of sub-limits on certain types of property?	to provide full coverage where property loss is not attributable in some degree to the fragility of the property or its attractiveness to thieves
Why were the Additional Conditions originally developed?	were to cover important points that had been omitted in some inland marine-based forms that were not subject to the fire insurance provisions of the insurance acts
The Notice to Authorities condition concerns only what peril?	only deals with theft losses
What is the purpose of the Pair and Set condition?	loss of part of a pair or set will not be considered a total loss. prevents claims for the value of pair and salvaging the remaining articles.
Why would subrogation rights be important to an insurer?	would allow the insurer to recover funds paid to claims losses from the responsible party

C12 - Chapter 6

Terms	Definitions
What are the two versions of IBC's Commercial Property Form?	named perils form and broad form (all risks)
Where more than one deductible applies for any one premises, which deductible will apply?	the highest deductible will apply
Describe the requirements of the Coinsurance clause.	insured must maintain insurance at least equal to the specified percentage of the value of property as determined in the basis of valuation clause.
How does the Vacancy or Unoccupancy exclusion in the Basic Fire Policy differ from that in the Commercial Property Named Perils Form?	differ slightly in its use of the word "are" instead of "while" to describe the excluded condition.
Describe the Property Illegally Acquired or Kept exclusion.	the insured has no legal claim to stolen property where purchased or stolen. the insurer must prove that the possession is illegal.
What has been omitted from the War Risks exclusion in the Commercial Property Named Perils Form?	the riot and civil commotion have been omitted.
Define the terms hackers and viruses as they pertain to technology.	hackers - use features of computer system and software to interfere, steal or corrupt data viruses - use the internet to covertly enter a computer system to destroy, corrupt, dos.
What are the exceptions to the exclusion of loss due to a data problem?	it does not apply to loss or damage caused directly by resultant fire, explosion, smoke, or leakage from fire protective equipment
How is the Fungi and Spores exclusion similar to the Pollution exclusion?	loss due to mould is excluded in property and liability policies. similar to pollution exlcusion.
How does the Debris Removal extension address the gap when the amount of insurance has been exhausted but the cost of removing debris remains?	the extension provides greater certainty for the insured of money for debris removal in addition to the money for direct loss.
Why does the form specify a percentage of the direct loss amount rather than including a debris removal expense?	allows the insurer to anticipate its loss exposure, including debris removal costs, and ensure some money for the insured to cover this indirect cost.
What are the limitations to the coverage of officers' and employees' personal property?	it is conditional coverage. applies only to loss or damage occurring at the insured premises. coverage does not apply to property insured by its owner.
Describe the consequences of a material change in risk within the control and knowledge of the insured as they relate to breach of contract.	it voids the insurance contract.
How is the Property Protection Systems clause linked to the Breach of Condition clause?	it makes clear that any failure of the insured to comply with the PPS clause will be a breach of policy conditions.
What are the benefits of the form's approach to premium adjustment? What are the drawbacks for the insured?	not having to file reports throughout the policy period saves handling costs. the insured can also apply for a premium adjustment after the end of some years and not others.  the drawbacks is that the insured must apply within six months of the date the policy expires.
Describe the Basis of Valuation clause.	establishes a clear understanding of how value will be determined for various types of property, including sold and unsold stock, property of others, tenant's improvements, business records, and other insured property.
Define tenant's improvements.	are additions or changes a tenant makes with the landlord's permission.
Describe the limitation of the insurer's liability for business records.	liability is limited to the cost incurred by the insured to re-create the damaged or destroyed records from duplicates. cost of re-assembling data is not covered.
Name three factors considered in the form to determine actual cash value.	replacement cost, less any depreciation and market value.
Explain what it means to say a structure must be fixed.	implies that it somehow must be attached to the ground or to something attached to the ground.
Describe the three different kinds of equipment broadly identified in the form.	1. broad array of contents any business is likely to have e.g. furniture 2. property belonging to other e.g. leased equipment. 3. tenant's improvements.
Define pollutants.	it includes solid, liquid, gaseous or thermal irritants or contaminants in any form.
In commercial wordings, why might vehicles be included in the definition of premises?	covers vehicles within 100 metres of insured premises. purpose is to cover goods being delivered.
Define terrorism.	ideologically motivated unlawful acts or acts committed by any groups for purpose of influencing any government or instilling fear in the public.

C12 - Chapter 7

Terms	Definitions
How many clauses does the Commercial Property Broad Form have?	it has 18 clauses, one more than the named perils form
What new clause was inserted just before the Definitions clause in the Broad Form?	the new clause is the locked vehicle warranty
What clause, present in the Named Perils Form, is divided into Sub-clauses A and B in the Broad Form? Why is it divided into these two sub-clauses?	the insured property clause is divided into sub-clauses A and B. it expands the scope of contract beyond only locations identified on the declarations page. also includes some losses otherwise excluded.
What clause in the Named Perils Form is the Broad Form's Sub-clause A identical to?	it is identical to the insured property clause in the named perils form.
Under what circumstances does the Broad Form's Sub-clause B provide coverage where the Named Perils Form does not?	in circumstances which provide coverage in a single policy for property at more than one location or while in transit.
Explain the distinction between a temporary location and a newly acquired location.	temporary location excludes a location owned, rented or controlled by the insured.
How should an insurer consider insuring property that would otherwise be covered under Sub clause B if that property is valuable, unusual, or attractive to thieves?	would be better to omit coverage for such high exposures under the commercial property broad form and issue a separate policy on terms that reflect the exposure and loss control measures needed.
How is the Broad Form's Insured Perils clause different from the Named Perils Form's Insured Perils clause?	it extends coverage not merely against perils named in this clause but against all risks of direct physical loss of or damage to the property insured.
Why do exclusions in all risks wordings exempt losses that would be covered by the Basic Fire Policy?	in order to meet the legal requirements for fire insurance contracts.
How many exclusions does the Broad Form have? Which ones are identical to their counterpart; in the Named Perils Form?	there are 16 exclusions in the broad form. 7 are identical to the named perils form counterpart.  -vacancy or unoccupancy exclusion, electrical devices exclusion, growing plants exclusion, money, securities and related property exclusion, property illegally acquired or kept exclusion, roadways and walkways exclusion.
Explain the Broad Form's Sewers, Drains, and Watermains exclusion.	it excludes sewers, drains, watermains and other types of property that may be part of an insured building or fall within the definition of equipment.
Define the term stock as it relates to the Commercial Broad Form.	stock includes the insured's own property and property of others. for vets and pet stores, that includes live pets.
The Animals, Fish, or Birds exclusion in the Broad Form limits coverage to what perils?	it limits coverage to the perils of the named perils form and theft or attempted theft.
How do its two exceptions limit the Furs, Jewellery, Precious Stones exclusion?	1. exempts 1st part of loss ($1k in IBC form) 2. restores coverage for full amount of a loss caused by one of the named perils
Which exclusion is meant to limit the scope of coverage to insured property in transit? What exceptions are there to this exclusion?	the marine insurance and waterborne property exclusion. it excludes coverage for insured property also insured under a marine policy.
What is the exception to the Property in the Custody of Others exclusion?	only exception is for property in the custody of a carrier delivering it, where the insured is responsible for the property until it is delivered
Define the term free on board.	at the risk of the insured's customer.
Which exclusions under Excluded Perils are the same in both the Broad Form and the Named Perils Form?	war risks, nuclear incident, by-laws exclusions
Along with fire following an earthquake, the exemption in the Broad Form's Earthquake exclusion applies to what three other perils? What type of property is not covered by the Earthquake exclusion?	also applies to explosion, smoke and leakage from fire protective equipment. property in transit is not covered in the earthquake exclusion.
What do the two Non-insurable Losses exclusions exclude?	1. loss due to dampness, dry air, temp changes 2. shrinkage, evaporation weight changes occurring during processing
Define the term agricultural smudging.	containers of slow-burning combustible material are ignited to create a blanket of smoke. uses in operations such as fruit orchards.
What are the two exceptions to the Pollution exclusion? Give an example of a situation in which each exception would apply.	1. escape of pollutant caused directly by an insured peril. e.g. faulty design in an oil container causing spill 2. insured peril caused by escape that was caused by an insured peril e.g. fire started by workers, leads to oil pipeline explosion
Describe the Mysterious Disappearance exclusion.	theft losses are covered by an all risks policy but the insured must prove that theft took place.
Define the term warranty.	a warranty is a statement or stipulation in a contract the breach of which nullifies the contract.

C12 - Chapter 8

Terms	Definitions
What three types of risk are normally underwritten individually at the time of application, renewal or whenever new information comes to light?	commercial, manufacturing and mercantile risks are normally underwritten individually.
Other than the occupancy risks they insure, what distinguishes habitational policies from other policies?	the language is less formal
Into what two categories are habitational policy provisions divided?	section 1 - property insurance section 2 - personal liability insurance
What is the commercial equivalent of the Coverage Summary called?	it is the equivalent of the declarations page used in commercial insurance policies
What nine pieces of information must be included in the Coverage Summary?	- name and postal address of insured - address of the property insured - policy's effective and expiry dates - occupancy, construction and public fire protection for each insured location - name(s) and address(es) of loss payee(s) for each location - the form (policy wording) that applies to each location - amounts of insurance for each form and for each item, section and coverage - deductible amount - premium.
What words, required by law in the common law provinces, are stamped or printed on the Coverage Summary page of a policy that has limitations?	"this policy contains a clause that may limit the amount payable"
What policy may be thought of as the habitational version of the Basic Fire Policy?	the residential basic form
Identify a form that serves those who are ineligible for an insurer's package policy or who have a location that is ineligible for broader coverage.	the residential basic form
What documents, usually included in a contract with the Residential Basic Form and the Coverage Summary, are not clear language documents because they must use the exact words taken from provincial Insurance Acts?	the statutory conditions are not clear language documents.
In what two ways does the packaging approach allow the insurer to reduce premiums?	it cuts costs and enhances coverage.
What helps the insurer maintain underwriting profitability when using the packaging approach?	- reduces the risk of adverse selection  - issues uniform contracts which simplifies policy-issuing and claims adjustment.
What two factors affect the variation in these from insurer to insurer?	rules of eligibility and rating criteria.
What policy, abbreviated CDP, was a precursor to the Residential Basic Form?	the composite dwelling policy
The absence of what peril differentiated the Homeowners Limited Form from the Basic Form?	the theft peril was not included for either dwelling building or personal property.
Identify an all risks property form that was originally offered as an inland marine coverage.	The Homeowners Broad From - all risks on the dwelling building and same perils as the basic form for persona property.
What inland marine coverage form, which was generally offered to wealthy people travelling abroad, is abbreviated PPF?	Personal Property Floater - expensive all risks policy covering personal property worldwide and offered only to wealthy people who often traveled abroad.
The IBC Homeowners forms 1151, 1153, and 1155 are better known by what names?	1151 - homeowner's basic form 1153 - homeowners broad form 1155 - homeowners comprehensive form
Which IBC Homeowners form includes all risks on all items?	homeowners comprehensive form (IBC 1155)
What type of insurance is addressed in Section I of the Homeowners forms? What type of insurance is addressed in Section II of the Homeowners forms?	section 1 - concerns property insurance section 2 - concerns personal liability insurance
In which section would you find Additional Living Expense coverage?	section 1 - property insurance. it applies to consequential loss - indirect loss arising as a consequence of a direct loss covered by ABC.
Which type of form uses a unique version of Section II?	the condominium unit owners form is unique.
What is the Homeowners building limit based on, rather than cash value?	it is based on replacement cost rather than actual cash value.
What alternative do most insurers require of insureds who choose not to have a professional appraisal done to determine a building's replacement cost?	they require the completion of an estimator or calculator (a formula) devised by professional appraisers that estimates replacement cost.
What is the minimum amount of insurance for Coverage B?	the minimum amount is usually 10% of the amount for coverage A.

C12 - Chapter 9

Terms	Definitions
What term, formerly the title used for the Cover Summary Page, is now often used as the subtitle of the Cover Summary Page?	Declarations is often subtitled.
Give five examples of objects encompassed by the term domestic water container.	1. hot water heating tanks and their piping and radiators,  2. hot-water storage tanks and associated piping,  3. water beds,  4. kettles 5. water reservoirs and dispensers
Domestic water containers are significant to what peril?	they are significant to the "sources of water damage" peril.
Other than the named insured, who is included in the definition of the term insured?	while living in the same household insured's spouse, relatives of either the insured or spouse, any person under 21 in their care.
Who may take legal action to enforce the contract?	only the insured in the coverage summary
In what instance is a student living away from home no longer covered by the named insured's policy?	the student must be dependent on the named insured (or spouse) for support and maintenance.
Define the term premises as it is used in the Homeowners Basic Form.	premises means simply the land within the lot lines on which the dwelling is situated.
Define the term residence employee.	a person who is traveling for the insured.
If unoccupancy lasts more than 30 consecutive days, is the policy coverage interrupted?	no it does not, the exclusion in the habitational forms applies only to vacancy.
Other than the dwelling itself, what other structures or objects does Coverage A-Dwelling Building cover?	covers structures attached to the house (patios) and permanently installed outdoor equipment. (fences)
Other than the insured's, what property can be covered under Part One of Coverage C?	uninsured personal property of others that might be damaged while it is on the part of the premises occupied by the insured.
In what circumstances does Part Two of Coverage C cover personal property?	personal property temporarily away from the premises.
What is personal property stored in a warehouse covered against?	it is only covered against theft.
What is the amount of insurance called that covers all items insured under Coverage C?	blanket limit.
What three types of property are excluded under Coverage C?	1. motorized vehicles and their equipment 2. camper units, truck caps, trailers or their equip. 3. aircraft or their equip.
Explain why Coverage C's Exclusion a) and Exclusion b) are necessary.	1. initially removes coverage of all kinds of motorized vehicles and then in effect restores certain types 2. excluded because auto insurance is more appropriate than property insurance.
Why were the Special Limits introduced to Coverage C?	it prevented skewing of the blanket limit by a few high valued articles.
List the eight Special Limits, found in Coverage C of the Homeowners Basic Form, that apply to loss or damage by all insured perils.	1. business property 2. securities 3. personal property used by an insured student 4. money, including cash cards or bullion 5. garden type tractors 6. watercraft 7. computer software 8. spare auto parts
Explain the term consequential loss as it pertains to the Homeowners Basic Form.	indirect loss that arises from physical loss or damage to described property.
What three coverages are combined in Coverage D?	1. additional living expense 2. fair rental value 3. prohibited access
Under the Prohibited Access in Coverage D, coverage applies when a civil authority orders the insured dwelling's occupants to move out for one of which two reasons?	1. a neighboring premises has sustained damage that poses danger to the insured premises. 2. a mass evacuation is required
What six causes of evacuation does Prohibited Access coverage exclude?	- flood - earthquake - war risks - terrorism - nuclear incident - radioactive contamination
Describe the effect of the Automatic Reinstatement clause on the extension for Property Removed.	if the amount of insurance is reinstated after a loss, the amount available under the Property Removed extension will still be the full amount of insurance for each item.
When the insured moves to a new primary residence, how long will the Moving to Another Home extension cover property in transit and situated at the new residence?	extension applies for not more than 30 consecutive days.
Describe a situation in which the Change of Temperature extension would apply.	thieves break a window in a sun room. cold winter air enters the room and kills rare tropical plants. damage to window is director loss. plants is an indirect loss.
What are four limitations on the protection provided by the Credit or Debit Cards, Forgery and Counterfeit Money extension?	1. cards must be in insured's name 2. no coverage for liability arising from cards issued to insured's employer or business 3. insured's failure to notify the issuer of a card that it has been lost or stolen 4. the insured must have compiled with all conditions of the card agreement.

C12 - Chapter 10

Terms	Definitions
What Homeowners form covers all risks on all items?	the homeowners comprehensive form (IBC form 1144)
The definitions of what 15 terms in the Homeowners Broad Form are the same as in the Homeowners Basic Form?	business, coverage summary page, data, domestic water container, dwelling, ground water, insured, premises, resident employee, spouse, surface waters, terrorism, watermain, we us our, you or your
How is the definition of vacant in the Broad Form different from the definition in the Basic Form?	the reference to a newly constructed house is new to the Broad Form.
Which perils in Coverage C of the Broad Form are the same as their counterparts under Insured Perils in the Basic Form?	fire or lightning, explosion, smoke, falling object, riot, vandalism or malicious acts, water damage, electricity
What peril found in the Basic Form is omitted in the Broad Form? Why?	glass breakage is omitted due to it concerning loss of the building while broad form concerns only personal property loss.
Which two exclusions under the Theft peril in the Basic Form have been omitted from the Theft peril in the Broad Form and relocated to the Exclusions?	basic form - excludes property under construction and theft by trickery.  they have been relocated in exclusions in the comprehensive form.
How does the Property Lawfully Seized exclusion in the Broad Form differ from its counterpart in the Basic Form?	under broad from, exclusion appears in the first group concerning Property Not Insured. In basic form, appears under group of exclusions concerning Loss or Damage Not Insured.
What is the Wear and Tear exclusion, and what is its purpose?	excludes loss due to wear and tear deterioration, defect or mechanical breakdown. Its purpose is to dispute about what a risk is. Inevitable or inherent loss.
What are the two parts of the Data or Data Problem exclusion? What exception is made in the second part of the exclusion?	1. loss of or to data. data not tangible and so are not property under property insurance policy. 2. loss due to data problem. the exception is loss by fire, explosion, smoke or water damage is covered.
What is the purpose of the Water Damage exclusion in Coverage C of the Broad Form?	it is needed to ensure that the same coverage is provided for Water Damage throughout the entire policy, under Coverages A, B, and C.
What are Specified Perils? Identify five of them in the Broad Form.	fire, lightning, explosion, smoke, riot.
What is the difference between Coverage A in the Broad Form and Coverage A in the Comprehensive Form?	vandalism and malicious acts is absent under the comprehensive form.
How is property stored in a warehouse covered under Coverage C of the Comprehensive Form?	loss is not restricted to theft but it is limited to 30 days for any peril other than theft.
How many Special Limits are there in the Comprehensive Form? How many groups are they divided into?	there are 13 special limits divided into 2 groups. group 1. loss or damage caused by a specified peril. 2. apply to loss or damage caused by any insured peril.
Which Special Limits in the Comprehensive Form do not apply to loss or damage caused by a Specified Peril?	1. jewellery, watches, gems, fur garments 2. numismatic property (e.g. coin collections) 3. manuscripts, stamps  4. collectible cards  5. bicycle and its equipment and accessories
What are the eight Special Limits that apply to loss or damage caused by any insured peril?	1. business property 2. securities 3. personal property used by an insured student 4. money, including cash cards, bullion 5. garden-type tractors 6. watercraft 7. computer software 8. spare auto parts
What exclusions appear in the Exclusions section of the Comprehensive Form but do not appear in the Exclusions section of the Broad or Basic Form?	1. sporting equipment exclusion 2. animals, birds or fish exclusion 3. scratching, abrasion, chipping or breakage exclusion
Which of the three Homeowners forms provides the greatest coverage against scratching, abrasion, chipping, or breakage?	under separate policies or as separate riders attached to the homeowners policy.
In what way is the Property Being Worked On exclusion in the Comprehensive Form different from the corresponding exclusion in the Basic and Broad Forms?	it broadens the exclusion to include property undergoing any process or while being worked on.
Where is the Theft by Tenant exclusion found in Broad Form? Where is it found in the Comprehensive Form?	broad form - under Coverage C comprehensive form - appears as a policy exclusion

 

 

 

 

 

 

 

 

 

 

 

 

 

Term Name the 5 elements of a contract.	Definition  A contract is an agreement: between legally capable parties for a consideration demonstrating intent to do something legal
Term List the parts of a policy	Definition the name the insurer the name of the insured the name of the person to whom the insurance money is payable the amount or method of determining premium the subject matter of the insurance the indemnity for which the insurer may become liable the perils insured the date on which the insurance takes effect the date on which the insurance terminates or the method by which the termination date is fixed
Term Actual Cash Value	Definition Actual cash value is the cost of replacing the property less any depreciation. Depreciation is determined by factors such as condition, resale value and normal life expectancy.
Term Principle of Indemnity	Definition The concept that an insured will be reimbursed to the same position as before a loss. Insureds may not profit from a loss. Indemnity is limited to the policy amount and terms.
Term Insurable Interest	Definition A legal principle which holds that one can only insure in a situation where they stand to lose. You have a financial interest inorder to insure. You can insure your own house but not your neighbours.
Term Insurable Interest	Definition The interest the insured must have in the subject matter in order to purchase insurance. If a person will gain from property continuing to exist or will be financially hurt by its loss, they are said to have an insurable interest.
Term Indemnity	Definition The principle that the insurer will repay the insured for loss, the insured will be put in same position as before loss and does not profit. The Basic Fire Policy supports indemnity by paying the insured the least of: The actual cash value The interest of the insured in the property The amount of insurance
Term  Actual Cash Value	Definition The cost of replacing the property less any depreciation.   Depreciation considers condition, resale value, and normal life expectancy of property.
Term Proximate Cause	Definition The actual cause of loss or damage,  an event in a continuous unbroken chain of cause and effect which results in loss.  The loss would not have happened without this event.
Term  Explain Subrogation	Definition The right of the insurer once it has paid a loss for which a third party is responsible to sue on behalf of the insured. Normal legal principles don't allow the right to sue for somebody else, you can only sue if you are the injured party.  Subrogation allows the insurer to sue when they are not the injured party.
Term Fortuitous	Definition insured losses must be fortuitous, or chance as far as the insured is concerned, intentional acts causing loss by the insured are not covered
Term Subrogation	Definition once the insurer has paid for a loss for which someone other than the policyholder is responsible it assumes the right of the insured to record this loss from the guilty party i.e. you break my window, my insurance pays to repair and then assumes the right to sue you for the cost of the repairs
Term Proximate cause	Definition the effective cause of loss or damage, there must be an unbroken chain of cause and effect between the occurrence of an insured peril and the damage to the property
Term Chattel mortgage	Definition  a lien or mortgage on personal property, ie furniture, a computer
Term Mortgage	Definition a lien or mortgage on real property, ie land and buildings
Term Limited exclusion	Definition an exclusion that only applies in certain circumstances, i.e. an exclusion to property in the custody of the insured while the insured is performing work on such property, the exclusion will not apply while awaiting work or pick up only while work is being completed
Term Vacant	Definition The absence of all occupants, none of whom intend to return. The presence of furnishings is not a determining factor. i.e. insured has moved to new home and this one is for sale
Term  Unoccupied	Definition All occupants are absent from the property but intend to return. i.e. away on vacation, out for the day
Term Deductible	Definition An agreed sum to be deducted from the amount o the loss and assumed by the insured in the event of a claim
Term  Coinsurance	Definition  A clause in the policy requiring the insured to carry a certain percentage of insurance (usually 80,90 or 100 percent) in relation to the value of the property. If the insured fails then he agrees to self insure a portion of all losses large or small in the same ratio as his failure to insure to the required value. Equation to calculate is: did/should X amount of the loss = amount insurer will pay
Term Average distribution clause	Definition  A clause used in a property policy to distribute the amount of insurance over several locations of objects in proportion to their value, think prorata distribution
Term Insurable interest	Definition The interest the insured must have in the subject matter of the insurance, the insured must be in a position to suffer a pecuniary (financial) loss if an insured peril occurs
Term Indemnity	Definition The principle that insured shall not receive more than the actual loss suffered, object is to return the insured to the same financial position as before the loss occurred, the insured neither gains nor loses
Term Define Moral hazard	Definition A danger of loss due to the nature of the insured, not the property, i.e. the chance of loss is increased due to the insured’s carelessness, incompetence, recklessness, indifference or fraudulent behaviour
Term Define Stock	Definition  Goods or merchandise the insured manufactures or acquires usual to the business for which the insured is legally liable
Term  Name the 5 Conditions for replacement cost	Definition Replacement must be made promptly Replacement must be on same or adjacent site Payment is limited to replacing, repairing, constructing or reconstructing on same site with new property of like kind and quality for like occupancy Settlement made when work completed All other insurance covering the same perils must have replacement cost provision Note: when these requirements are not met losses will be settled acv, despite the policy’s replacement cost provision
Term Explain Automatic reinstatement	Definition Losses under policy do not reduce the available amount of insurance, the amount of insurance throughout policy period remains unchanged even if claims are paid, if the insured cancels after a loss they are entitled to refund of premium as required by statute ( the payment of even a total loss doesn’t mean the premium is considered used/earned in entirety)
Term Name the 7 most common additional perils (formerly known as Extended Coverage)	Definition Explosion (beyond basic fire coverage) Impact by aircraft and land vehicles Riot Vandalism or malicious acts Smoke Leakage from fire protective equipment Windstorm or hail
Term Describe water escape	Definition Includes loss or damage resulting from: Freezing of a heating, plumbing, air conditioning system Escape of water from a plumbing, heating, air conditioning system Escape of water from a public watermain  Exclusions are: Freezing in part of building where heat is not maintained during usual heating season Water escape from a sewer, sump, septic tank, eavestrough or downspout Losses that occur while the building is vacant or under construction even if permission has been given
Term Describe sewer back up	Definition Water escape from a sewer, sump, septic tank, eavestrough or downspout  This coverage provides the option to purchase coverage for the sewer back-up exclusion under the water escape peril
Term Describe flood	Definition Waves, tides, tidal waves, rising and breaking out or overflow of any body of water whether natural or man made
Term Define Conversion	Definition a form of theft the taking over of property which belongs to another and using it as if it were owned, i.e. leasing a vehicle and taking far away without payment or selling it as though it belonged to you coverage for conversion is usually excluded under theft, not likely to be covered at all
Term define mysterious disappearance	Definition The disappearance of insured property in an unexplained manner, such as lost. i.e. the insured takes a ring off at a public restroom to wash hands and then leaves behind, when the insured realizes and returns it is gone. Someone could have taken it but there is no direct evidence to support this.
Term flate rate	Definition a fixed rate which is applied to an entire amount of insurance
Term what is a graded rate	Definition a rate which is split into layers depending upon the amount of insurance purchased, ie. the first 10 000 in coverage may cost 2.50$ per 100, but the next 10 000 in coverage only costs 2.00$ per 100
Term describe named perils coverage	Definition a policy from that responds only to loss caused by the perils specifically named in the wording
Term describe all risks coverage	Definition the broadest coverage option available, instead of listing the specific perils insured the insurer states what the exclusion are, what is not covered
Term define constructive total loss	Definition a partial loss where the damage is so extensive that repairs would cost as much or more than the repaired property would be worth
Term define theft	Definition  a criminal offence, the taking of property without the owners consent with the intention of temporarily or permanently depriving the owner of its use
Term What is the definition of Fire Insurance?	Definition  The term fire insurance is defined as insurance against loss or damage to property through fire, lightning or explosion due to ignition.
Term When must an insurer provide proof of loss forms to an insured?	Definition Proof of loss forms must be provided by the insurer to the insured immediately upon request and not later than 60 days after receiving notice of loss.
Term When may an insured bring action for the payment of a claim against an insurer?	Definition The insured may bring action for non payment of a claim 60 days after providing the completed proof of loss forms to the insurer.
Term What 3 perils must every fire insurance contract cover?	Definition Fire Lightning – no coverage for electrical appliances unless fire ensues Explosion of natural, coal or manufactured gas in a building which is not part of a gas works
Term List 2 exclusions in the Basic Fire Policy.	Definition Loss due to the following are excluded: 1. goods undergoing any process involving the application of heat2. riot, civil commotion, war, invasion, act of foreign enemey, hostilities (whether war be declared or not) civil war, rebellion, revolution, insurrection or military power
Term What coverage is extended under the basic fire policy for property removed to another location to prevent loss or damage?How is this coverage improved in the residential basic policy?	Definition Coverage for property removed to prevent loss or damage is automatically extended at the new location for 7 days or until the policy expiry date, whichever is least.  The residential basic policy extends this coverage for 30 days or until policy expiry.
Term What protection is given to a loss payee added to a policy (no mortgage clause)?	Definition The insurer cannot cancel or alter the policy to the disadvantage of the loss payee without providing notice. The requirements for notice are the same as for the insured, i.e. insurer must provide 15 days notice by registered mail to cancel.
Term What are the rules about payment of a claim when more than one policy covers the same interest?	Definition Each insurer will be responsible for its rateable proportion of the loss.  Rateable contribution holds that each insurer will pay an amount which is proportionate to the amount that their policy limit bears in proportion to the total value of the property. For example:Policy A insures for 10 000Policy B insures for 15 000The loss is 20 000 Policy A will pay 10 000/ (total amounts of all insurance 25 000) X amount of loss 20 000 = $8000Policy B will pay 15 000/ (total amounts of all insurance (25 000) X amount of loss 20 000 = $12 000 If one policy specifically describes an item then it will be responsible to pay first and other insurance will pay only after that policy limit exhausted. For example a person insures their general contents on a blanket basis and has a separate policy which is for a specific item of jewellery. The specific policy will pay first to its limit of insurance.
Term What must an insured have done to be guilty of misrepresentation?	Definition  The applicant must have: Falsely described the property to the detriment of the insurer Misrepresented a material circumstance to the insurer Fraudulently omitted to mention a material circumstance This must result in the insurer issuing a policy they would not have issued or charging an inadequate premium for the risk.
Term In what situation is the insurer obliged to insure a new interest in replacement to the named insured according to Statutory Condition 3 Change of Interest?	Definition There are 2:  Authorized assignment under bankruptcy Change of title by succession, operation of law or death of named insured
Term How is Statutory Condition 4 Material Change different from Statutory Condition 1 Misrepresentation?	Definition Statutory Condition 1 Misrepresentation concerns material facts omitted or falsely described at the time of application for the policy.  Statutory Condition 4 Material Change concerns changes to material fact which occur during the policy term. Insureds are required to notify the insurer of such changes promptly.
Term What is required for a change to be considered material?	Definition To be material a change must be substantial and continuing.
Term What are the requirements when an insurer wishes to cancel a policy according to Statutory Condition 5 Termination?	Definition The insurer must notify the insured in writing and provide notice. The notice is 5 days if the cancellation letter is hand delivered and 15 days if it is sent by registered mail.
Term  What happens if an insured doesn’t receive the cancellation letter because they have moved?	Definition There is no requirement that the insured must actually receive the cancellation letter, the insurer is required to send the letter to the last known address as advised by the insured. The insured is expected to advise the insurer of any changes of address.
Term What are the obligations of the insured after a loss?	Definition  The insured must provide: Prompt written notice Full details of the circumstances of the loss Full details about other interested parties, including property interests and other insurers The value of damaged and undamaged property
Term Describe how an insured might be found guilty of fraud.	Definition  An insured could be found guilty of fraud by providing fraudulently or wilfully false information on the proof of loss. A proof of loss must be verified by statutory declaration that the details are true and providing false information can result in the denial of the entire claim, not just the items involving particulars falsely described. Ex. A claim is made for loss of contents which includes a TV, the TV is falsely described and being much larger and of better quality than it really was. This could result in the entire claim, not just the claim for the TV, being denied.
Term  Who may give notice and proof of loss?	Definition The named insured A representative of the named insured (if unavailable) Anyone to whom part of the insurance proceeds are payable to
Term Describe the 3 key requirements set out by Statutory Condition 9 Salvage.	Definition  If property is damaged so severely that repair may be more costly than replacement, the insurer may pay the insured for a total loss and is then eligible to retain the salvage (damaged goods) The insured is obligated after a loss to protect property from further loss or damage, to maximize salvage benefits. This may include removing property to another location to protect it from damage. The insurer will pay the expenses of the insured for removing property to protect it from further loss or damage, ie moving expenses and storage costs. The insurer will only pay prorata an amount which corresponds to the costs for the insured property, will not pay these expenses for uninsured property.
Term  What are the requirements about when a loss is payable?	Definition  Insurers have 60 days from receipt of the completed proof of loss to either pay or deny a claim.
Term How long does an insured have to take action against and insurer in court?	Definition  If in dispute over the settlement of a claim or advising of the intention to make a claim under a policy an Insured in Ontario has 1 year for a basic fire policy, and 2 years for a multi peril policy.

Terms	Definitions
Do the terms "data problem, fungi and spores have the same meaning in the Homeowners Broad Form as they do in the Commercial Property form?	Yes, and they are defined in order to be excluded.
The Homeowners Broad form are divided into two groups. Name them.Name the 2 groups	- Property not insured - Loss or damage not insured
The Homeowners Broad form excludes loss or damage caused by water unless that loss is resulted from one or more of the same four sorces of water damage decribed under Coverage C. Name these four perils.	1. Sudden and accidental escate of water from a watermain. 2. The sudden and accidental escape of water or steam from a plumbing, heating, sprinkler, or air conditioning system or domestic water container located inside the dwelling. 3. The sudden and accidemtal escape of water from a domestic container located outside the dwelling. But no coverage when escape of water is caused by freezing. 4. Water enters the dwelling through an opening created suddenly and accidentally by a Specified Peril other than Water Damage.
There are three groups of Special Limits of the Homeowners Comprehensive form. Name them.	1. Specified Perils 2. Loss or damage caused by ANY insured peril. 3. Additional Living Expense
Explain the Sporting Equipment exclusion.	When the loss or damage is caused due to its intended use. This exclusion is new to the Homeowners Comprehensive form and is not found in either the Basic or Broad form.
The Homeowners Comprehensive form broadens the loss exclusion to personal property while undergoing a process involving the application of heat. Explain this and give one example.	It applies to property undergoing any process or while being worked on, where the damage results from that process of work. Resulting damage to other property is still covered. Ex. item being worked on catches on fire. The item itself is not covered but damage to surrounding area is.
Under the Theft Peril of the Homeowners Comprehensive form coverage C has been broadened to all risks, sothere is no Theft peril as such. How is this different than than coverage undeer the Broad form?	The coerage for loss or damage from the part of the dwelling rented to others, caused by theft or attempted theft by any tenant, tenant's employee or member of the tenant household has been removed.
Loss or damage caused by scratching, abrassion or chipping of personal property or breakage of fragile or brittle articls is excluded unless the loss is caused by what three exceptions.	1. a Specified Peril 2. accident to a land vehicle, watercraft or aircraft 3. theft or attempted theft
What point is added to the Homeowners Broad form that is not part of the Basic form?	In the case of a newly constructed house, no occupant has yet taken up residence.
Name the eight perils under Coverage C of the Homeowners Broad form that are the same those under the perils of the Basic form.	- Fire or Lightning - Explosion - Smoke  - Falling Object - Riot - Vandalism or Malicious Acts - Water damage - Electricity
Which peril in the Homeowners Broad form is OMITTED that is in the Homeowners Basic form and why is it omitted?	Glas breakage. Because it concerns loss to the building. All perils named in the Broad form under Coverage C concern only loss to personal property.
There are two groups of exclusions in the Homeowners Comprehensive form. Name these two groups?	- Property not insured - Loss or damage not insured
List the five Special Limits that do not apply to loss or damage caused by a Specified Peril.	1. Jewellery, watches, gems, fur garments and garments trimmed with fur are covered up to a specific dollar limit ($2000). 2 Numismatic property (such as coin collections) is covered up to a specified dollar limit ($200). 3. Manuscripts, stamps and philatelic property are covered up to a specified dollar limit ($1000). 4. Collectible cards (such as sports personality cards) are covered up to a specified dollar limit ($1000). 5 EACH bicycle, its equipment, and accessories are covered up to a specified dollar limit ($500).
List the eight Special Limits and their limits that apply to loss of damage caused by any insured peril.	1. Business property ($2000) 2. Securities ($2000) 3. Personal property used by an insured student ($2500) 4. Money, including cash cardsor bullion ($200) 5. Garden type tractors ($5000) 6. Watercraft ($1000) 7. Computer software ($2500) 8. Spare automobile parts ($1000)
Are the Specified Perils in the Homeowners Comprehensive form identical with those of the Broad form?	Yes
How is property stored in a warehouse covered under Coverage C of theComprehensive form?	Coverage is not restricted to loss by theft, but is limited to 30 days for any peril other than theft. The form does allow the insured an extension of that 30 day period.
What Homeowners form covers all risks on all items?	Homeowners Broad form
There are 15 definitions in the Homeonwers Broad form that are the same as in the Homeownres Basic form. List these 15 terms.	1. Businee 2. Coverage Summary page 3. Data 4. Domestic Water Container 5. Dwelling 6. Ground Water 7. Insured 8. Premises 9. Residence Employee 10. Spouse 11. Surface Water 12. Terrorism 13. Watermain 14. We, us, or our 15. You or Your
Which of the three Homeowners forms provide the greatest coverage against scratching, abrasion, chipping or breakage?	The Homeowners Comprehensive form is slightly greater than under the Basic or Broad forms.
Is there coverage under the Homeowners Comprehensive form for loss due to: - Nuclear Incident - Radioactive Contamination - War rsks  - Intentional or Criminal Acts.	No, all of these are excludes coverages in the same manner as in the Basic and Broad forms.
Bonus question!! What is your Insurance Institute member number?	You may nee to remember this if you forget your membership card when writing your exam.

 

http://www.flashcardmachine.com/insurance-on-propertypt1c12.html