Auto 1, 2, 3 Flashcards
True or false an automobile applicant must be signed before the policy can be issued
False
Does the agent or broker need to sign the automobile application
No
What is the correct term when an insurance company must pay when innocent third parties suffer a loss, even when the insured has breached their obligations under the statutory conditions
Absolute liability
What optional coverage is only available under section 7 loss or damage
Accident Benefits
When misrepresentation occurs, which coverage will insureds still have access to
Accident Benefits
Are changes to coverage valid if an underwriter issues the policy in a way that is different than requested on the automobile application
Yes, if the change is clearly marked and the insured does not object within 7 days
Which document is approved by the superintendent of insurance and contains the information to underwrite an automobile policy in Ontario
OAF 1
Damage to property belonging to a third party that the insured has cause would be covered under what
Liability coverage
What impact does absolute liability have on the insured
The insured is responsible to pay back the amounts paid out by the insurer
How are damages for lost income calculated
70% of the gross income
What specific policy is the automobile policy not meant to cover
Nuclear hazards
Is liability needed when the other vehicles policy does not have DCPD
Yes
For liability, all jurisdictions require a certain portion of the policy limit to be reserved for bodily injury claims and a different amount to be reserved for property damage. What is this known as
Priority of payments
Insureds may not receive a non earner benefit if they are recieveing the following benefits
Income replacement benefit
Under additional agreements of insurer what legal costs is the insurer responsibility for paying in the event of an automobile accident
The insurer pays for the cost to defend the insured
What are some of the optional expenses available under accident benefits
Housekeeping, education expenses, and cost of examination
What does the definition of an insured person extend to include under accident benefits in Ontario
Any occupant of the insured automobile for accidents anywhere in Canada
What is the purpose of the minor injury guideline
List the minor injuries that will not be covered under accident benefits
Which accident benefits coverages are not available when a driver has an accident while under the influence of drugs or alcohol
Income replacement and non earner benefits
What is the total amount the standard death benefit would pay out to the wife and four children when the husband/ father dies as a result of injuries sustained in an automobile accident
65,000
25,000 for the wife and 10,000 for each dependant
What were the changes made to the statutory accident benefits SABS coverage in 2016
Provide the option for an insured to purchase limits of additional accident benefits coverage
What are collateral benefits
Entitlements outside of the automobile insurance policy
What are benefits for services provided by an aide or those provided in a long term care facility known as
Attendant care
What is proximate cause
Immediate and effective cause of loss
A high risk industrial operation is an example of what type of risk
Special risk
What condition must be met for guaranteed replacement cost to be applied in the event of a claim
The insured must have notified the insurer within 90 days of starting work if any improvement has been made to the building
Which of the following perils is covered under an extended coverage endorsement (home)
Riot
Flood
Vandalism
Earthquake
Riot
True or false it is the responsibility of the broker or agent to advise the insurer of business written and submit applications promptly
True
What is the document that confirms thay a contract of insurance has been agreed upon
Interim receipt
What is the main purpose of the application process
Provide information relating to the subject matter of insurance
What type of adjuster is appointed by the insurer to assist in the settlement of a claim
Independent adjuster
Under the comprehensive homeowners policy what does inflation coverage extension do
Increases the amount of coverage on a policy renewal
Which of the following items are not restricted by a special limit
Jewellery
Theft or freezer food
Coin collection
Computer software
Theft of freezer food
Actual cash value of an item is best described as
Fair market value
Which of the following is true with regards to an all risks policy
Its often subject to many exclusions
It is the same as the basic Fire policy but with EC endorsement
Its often subject to many exclusions
On a comprehensive homeowners policy which of the following is NOT a specified peril
Sudden water damage
Theft
Explosion
Smoke
Theft
Statutory conditions do not deal with
Salvage
Right of access to premises after a loss
Change of title of insured property
Premium
Premium
An insureds all risk home policy has a special limit of 2000$ on jewellery for losses not caused by a specified peril. During a fire the insureds house and their unscheduled jewellery is worth 15,000$ is damaged. How much will the insured be indemnified for the loss of the jewellery
Full amount of jewellery
Which of the following limits does NOT appear on a commercial general liability policy
Aggregate limit
Each occurence limit
Personal injury limit
Special limit
Special limit
Under a comprehensive homeowners policy, special limits of insurance apply to jewellery and coin collection for ___________ lossess
Theft
The insureds dining furniture was badly damaged when a fire broke out. The claim was settled by paying an amount equal to the replacement cost minus physical depreciation. This illustrates the application of
Actual cash value
Commercial property floater covers
All risk policy that includes theft insurance and covers property at specified premises of the insured newly acquired property and while in transit within CA and US. It covers stock, equipment and tenant improvements and virtually any contents that may move along locations.
DOES NOT COVER THE BUILDING NEED COMMERCIAL BUILDING FORM FOR THIS
Glass insurance covers
Breakage from everything except fire, war and nuclear damage
Insurance to protect against the destructive effects of power that is accidentally liberated has traditionally been known as
Boiler and Machinery insurance
A form of insurance policy covering the extra expense of an insured in carrying on a business following a loss by an insured peril
Extra expense insurance/ form
Which of the following is not covered under glass insurance
Scratching and defacement
Fire
Repairing damaged window sashes
Fire
Glass coverage covers against breakage from any cause except
Fire, war and nuclear damage
For glass insurance some additional damage such as ___________ and ______________ may be covered for an additional premium
Scratching and defacement
ABC company manufactures paper, fire damage destroyed all their paper products. What inherent hazard is associated with paper products
Damagability
_____________ includes furniture, fittings, fixtures, machinery, tools, utensils, appliances and generally contents of every description except stock
Equipment
The minimum coverage that must be provided on a fire policy are
Fire, lightning and limited explosion
Which of the following underwriting factors is unique to a tenant policy application
A) the location of the dwelling
B) the applicants claims history
C) how the building was constructed
D) the amount of personal property insurance required
D
Loss assessment condo coverage could occur for reasons such as the following
1) uninsured
2) application of a penalty under coinsurance clause
3) the cause of loss is not an insured peril or is specifically excluded under the building policy
4) breach of a policy condition by the condo corp
Many seasonal dwelling policies do not include ______________ or ___________ and ________________ and ____________ insurance but they can be added for additional premium
Burglary, vandalism and malicious acts and glass insurance
For coverage of outbuildings that are part of a seasonal dwelling the limit on these other structures is usually ____________________
A percentage of the amount of insurance on the building
Under the commercial building, equipment and stock form fittings, fixtures and tools would be classified as what
Equipment
Income replacement insurance replaces
Income lost due to an interruption
In a commercial general liability policy The maximum total amount that will be paid out in actual claims during a policy year is called
Aggregate limit
What document is approved by the superintendent of insurance and contains the information to underwrite, rate and issue an automobile policy in Ontario
OAF 1
What info is required under the driver information section of the automobile application
Names of all drivers in the household.
What is the insurers responsibility for paying for legal costs in the event of an automobile accident
The insurer pays the cost to defend the insured - the insurer agrees to pay court costs and post judgement interest assessed against the insured
Under which act is negligence defined
Highway traffic act
Accident benefit coverage provides
Immediate financial assistance without regard to fault for those injured in an automobile accident
What does the acronym SABS stand for
Statutory Accident Benefits Schedule
Established in 1994 __________ __________ benefits schedule gave increased and wide ranging benefits and included death, serious disfigurement or impairment of physical, mental or psychological function
Statutory Accident Benefits Schedule
With regards to contract law a “meeting of the minds” is necessary to fulfill the element of
Agreement
Extended coverage covers losses resulting from
Explosion, falling object, impact by aircraft of land vehicle, lightning damage to electrical appliances, riot, water escape, rupture, freezing, smoke, vandalism or malicious acts, windstorm and hail
Under repair or replacement the insurer may instead of making a cash settlement repair or replace the auto providing he notifies the insured within
7 days after receipt of proof of loss
If third party is unidentified the accident must be reported to the police within _____ hours or as soon as possible. The insured must give____________ statement within _________ setting out details of the accident
24 hours and written notice 30 days
When the 3rd party is uninsured the insured must give the insurer __________ _________ within ______ _____
Written notice within 30 days
When the 3rd party is either uninsured or unidentified within ___ ____ or if unable as soon as practicle after that the insured must provide as much evidence as possible in support of the claim
90 days
To a driver who knew or ought to have known that he was operating an uninsured auto the insurer is not required to pay
Income replacement benefits
Death or funeral benefits
Attendant care benefits
The maximum total amount that will be paid out in actual claims during a policy year is called
Aggregate limit
A sum of money to which a plaintiff is entitled that makes amends for an actual loss sustained and nothing more
Compensatory damages
Liability insurance promises to pay on behalf of the insured those sums
For which the insured is legally liable, subject to the policy limits
Bond executed on behalf of a person appointed by a court to a position of trust that guarantees the performance of statutory duties and proper accounting. Example would be executors of estates, trustee in bankruptcy and guardians of minors
Fiduciary bonds
Bond that guarantees that the successful bidder of a project will enter into the contract under the bidding terms. The purpose is to make sure that bids are made in good faith and the contractor whose bid is accepted will accept the construction contract as bid
Bid bond
Special limits apply to other types of personal property that could involve considerable values such as ______________ these limits apply to losses caused by all risks
Garden tractors, watercraft, computer software, and spare automobile parts
This type of risk encompasses the chance of loss arising from a persons own bodily injury loss of life or loss of income
Personal risk
What happens to the premium paid on a policy when the policy is made
The entire premium is returned to the insured
If the insured cancels or terminates the policy what happens to the premium
The insurer will retain premium calculated on a short rate basis
What is an advantage of using a written applcation
Eliminates misrepresentation and supports insurable interest
What does the defence, settlement, supplementary payments policy for
Defending insureds against any claims insured under coverage E alleging bodily injury or property damage and seeking compensatory damages even if such claims are groundless false or fraudulent
Under voluntary medical payments coverage F the policy will pay reasonable medical expenses incurred within _____ ______ of the date of the accident
One year
Voluntary medical payments coverage F is available if
The insured unintentionally injures another person or if the person is accidentally injured on the insured premises
Tenants policies usually have
A deductible
Tenants policies usually have
A deductible
Regarding coverage for non owned autos the policy covers other automobiles not owned by the insured but driven by
The insured or the insureds spouse who lives with him or her
If the insurer recieved proof of loss and chooses not to repair rebuild or replace the damages automobile the insurer must pay the claim within how many days
60 days
A high risk industrial operation is an example of what type of risk
Special risk
Which of the following statements describes the term consideration as an element of a contract
The ability to form an agreement
A service to be determined sometime in the future
Evidence that the parties intend to be bound by the agreement
3
The subject matter of the insurance, the perils insured against, the exclusions and the circumstances under which the insured may receive the proceeds of the insurance are what part of the policy
Insuring agreements
Under what circumstances would a broker be required to disclose information about an insureds business affairs
What a request is required by a court of law
Which of the following perils is covered under the extended coverage endorsement
Riot
Flood
Vandalism
Earthquake
Riot
This clause requires that the insured in the event of a loss do whatever is reasonably necessary to protect or recover the insured property the insurer will cover expenses. Examples include: covering up exposed property with a tarp, shutting off building services, hiring a plumber to repair broken pipes
Sue and Labour
In the tenants policy under the personal property insurance limit (often 500$) may be applied to pay for damage not including __________ damage but to the dwelling directly caused by ___________ and to the interior of the dwelling directly caused by ____________
Fire damage
Theft or attempted theft
Vandalism and and malicious mischief
How is the condo unit policy similar to a homeowners policy
Coverage on contents is subject to similar limitations and exclusions
What is the insurers obligation when it incorrectly classifies am automobile risk under an approved rating system
Make the correction and if there is an overpayment the insurer must refund it WITH INTEREST
The following are typical personal liability coverage limitations under a homeowners policy
Watercarft
Motorized vehicles
Trailers
Business and business property
Under the personal liability coverage there is no coverage for claims arising under the policy for any watercraft or motorized vehicle used for the following
Carrying passengers for compensation
Business purposes
Racing
Rental
Tenants legal liability is legal liability for property damage to premises or their contents that insureds are using, renting, or have in their custody or control caused by
Fire, explosion, water escape or smoke - not smoke from a fireplace though
This is an unincorporated association of insurers, and provides automobile insurance to owners and operators of motor vehicles who may otherwise have difficulty obtaining insurance through the voluntary market
The facility association
The association through its rules of operation maintains the following manuals
- Accounting and statistical manual
- Manual of rules and rates
- Claims guide
- Rick sharing poll procedures manual
A _____ _____ is the measurement of an insurers exposure. Example a single policy providing coverage on 3 automobiles for a six month term would be 1.5 _____ _______
Car year
Car years
The structure of FSCO financial services commission of ontario comprises 3 elements
The commission or board
The financial services tribunal
Superintendent of financial services
The commission or board has 5 members
The chair, two vice chairs, the director of arbitrations and the superintendent of financial services
The director of arbitrations is responsible for
The automobile insurance dispute resolution system
The financial services tribunal is an independent body that
Hears appeals of regulatory decisions and reviews proposed orders of the superintendent
Coverage under the personal articles endorsement is an
All risks coverage on specific classes of property of a personal nature
Rating for a commerical property floater includes a loading because
An additional amount is needed to cover more perils
Major consideration when underwritting and rating a contractors equipment floater is
How the equipment will be used
In addition to the limit of liability on the automobile policy the insurer agrees to pay which of the following additional costs under the third party liability coverahe
Interests on the insureds portion of a court judgement
___________ is not covered in specified perils auto
Vandalism
Some losses not covered by specified perils under own damage are
Vandalism, malicious mischief, glass breakage or impact with an animal
Theft of the insured vehicle as a result of _______ or _______ are excluded under the own damage coverage
Fraud or trickery
Loss of income is an example of what type of risk
Personal risk
Payment within _____ days of reciept of proof of loss and if appraisal requested ______ days after recipet of appraisal
60 days
15 days
Bill 164 1994 introduced
Statutory accident benefits
Amended the threshold to allow suits for death or serious disfigurement or serious impairment of an important physical, mental or psychological function 10,000 $ deductible was applied to amount of damages recoverable
Bill 198 2003 with regards to threshold
A 30,000$ deductible applies to lawsuits for pain and suffering
Bill 198 threshold revised to allow suits on grounds of
Death permanent serious disfigurement or permanent serious impairment of an important physical mental or psychological function
With respect to boat insurance a full average clause
Relates an insurers share of loss to the adequacy of the amount of insurance
Liability coverage for automobile for a driver who does not have an automobile but requires coverage for other automobiles. Or if unsure the car is insured
Drivers policy
Special programs available to ensure insurance availability for less desirable and more hazardous risks are sometimes referred to as
Residual markets
In defending the insured the liability policy includes payment of
Reasonable expenses, including loss of earnings up to 100$ a day, which the insured incurs at the request of the insurer
Rating on a commercial property floater includes loading because
An additional amount is needed to cover more perils
It is important to encourage insureds to carry adequate amounts of insurance because
Rates are based on the assumption the total values are insured
On which part an insurance policy states the rules for when an insurer may cancel the policy
Statutory conditions
If an applicant makes a false statement that is considered to be material on an application, the insurer can
Cancel the policy
The family boxer is worth 1500$ is the dog covered in each of the following situations
A. Run over by a car
B. Killed in a house fire
A. No Because impact with a land vehicle is excluded
B. Yes. To the maximum of 500$ because fire is a specified peril and a covered loss
How does the comprehensive homeowners form provide insurance coverage
Determines the amount of certain coverages based on the amount of coverage on the building
One of the major changes with the introduction of bill 198 was the right to recover from a responsible third party for
Medical expenses
Under requirements after loss (own damage) the insured must deliver a proof of loss to the insurer within
90 days after the date of the loss
A premium adjustment clause in the commercial building, equipment and stock form is intended to be used by
A retail business where the amount of stock held by the firm is likely to change periodically through the term
The period of time within which a claim may be brought about by a policy holder is known as
Prescription period
