Chapter 10 Flashcards
Define hostile and friendly fire
Hostile fire- a fire that occurs in or escapes to a place not anticipated
Friendly fire- a fire that has been intentionally ignited and remains controlled and confided to its intended size and space, such as a fire in a fireplace or a furnace flame
Define estimate
The costs a contractor anticipates for a project
Define guaranteed replacement cost
An undertaking by the insurer to pay the cost of repairs to or replace the dwelling building even if it is more than the amount of insurance on the dwelling building, provided certain conditions are met in addition to those that normally govern settlement of replacement cost
Called enhanced replacement cost in Quebec
Define water hammer
A pressure shock wave induced in plumbing supply systems when a sudden change occurs to the stability of the water, causing a banging noise in pipes
What do each of the coverages under a property policy cover?
(Coverage A,B,C,D)
Coverage A- dwelling building (main building, windows, flooring, roof)
Coverage B- Detached Private Structures (garden shed, gazebo, barn, boathouse)
Coverage C- Personal Property (furniture, clothing, televisions, computers)
Coverage D- Additional Living Expenses (If dwelling is unfit to occupy: note, stay, grocery bill)
What additional coverages are included on a condo policy?
Unit improvements and betterments-upgrades made to condo unit
Loss assessment- the condominium corporation might charge a special, assessment to each unit owner if the insurance it bought for the building on behalf of all unit owners is insufficient
Unit additional protection- if loss or damage to an individual unit and the coverage in the corporations building policy is inadequate or insufficient, the unit owner bear the difference
What questions should be asked to distinguish between heat and fire as the culprit?
Has heat been applied?
What resulting products of fire are in evidence?
Once coverage has been assessed for a fire damage, the loss adjuster must act quickly to establish what can be done to minimize damage?
There may be some urgency to board up exposed areas
There may be a need to air and deodorize the premise
Washing walls should be attempted as soon as possible to determine what painting would be required
Protective barriers or fencing may be required to limit any trespassing or further damage
In the case of complex or large losses still under investigation, the property may require onsite security to protect the area
Explain lightening coverage (property)
If a bolt of lightening strike an insured house, the resulting damage is covered
Lightening may cause damage to electrical appliances by following power lines into the house and overloading appliances wired or plugged into circuits
Explain coverage for explosion (property)
The peril of explosion in residential, applications is commonly associated with natural gas leaks and subsequent explosions, which can results in catastrophic damage
In basic policy wordings forms, the results of water hammer are excluded under the explosion peril
The water hammer exclusion is not found in all-risks policy forms or in Quebec policy forms
What are some extended coverage perils included on a property policy?
Explosion (beyond the coverage in the basic fire policy)
Impact by aircraft, spacecraft, or land vehicle
Riot, vandalism, or malicious acts
Smoke
Leakage from fire protective equipment
Windstorm or hail
Explain smoke coverage (property)
-Smoke losses under this peril must result from something other than a fire, because smoke from a fire loss is already covered under the fire peril
-The smoke peril covers damage caused by sudden, unusable, and faulty operation of any heating or cooking unit
-Smoke damage from agricultural smudging or industrial operations is not covered
Explain falling object coverage (property)
-this peril covers falling objects that strike the exterior of the building
-there is no coverage for objects that fall within the house
Explain impact by aircraft or land vehicle coverage (property)
-the peril of impact by aircraft or land vehicle covers damage done to the dwelling
-the basic coverage available under this peril does not indemnify for such losses when the insured owners or operates the vehicle that caused damage, although some policy wordings may extend coverage for such damage
-injury to animals is not insured under this peril
Explain riot coverage (property)
-when at least three or more people are involved in damaging, it could qualify as a riot
-however, the policy excludes loss caused by war, invasion, act of foreign enemy, hostilities, civil war, rebellion, revolution, insurrection, or military power
Explain vandalism or malicious acts coverage (property)
Vandalism is the intentional defacement of property
Malicious mischief is willful destruction of another’s property
Explain water coverage for plumbing system (property)
-Sudden and accidental escape of water from a water main
-Sudden and accidental escape of water or steam from within a plumbing, heating, sprinkler, or air conditions system or domestic water container located inside the dwelling
-Sudden and accidental escape of water from a domestic water container located outside the building
-water that enters the dwelling through an opening that has been created sudden and accidentally by an insured peril other than water damage
Explain water exclusions (property)
-There are restrictions on the policy for water escaping from frozen pipes that have ruptured. If frozen pipes rupture, causing damage, and the insured has been away from the premises for more than four consecutive days
-continuous or repeated seepage or leakage of water
Explain windstorm coverage (property)
Any wind strong enough to cause damage to insured property would qualify under the windstorm peril. Roof damage is the most typical claim
Explain hail coverage (property)
If a large percentage of the roof shingle tabs have been broken, it may be necessary to replace the roof covering entirely
Some common roofing problems have nothing to do with hail damage (example: moisture trapped in the roofing material may cause bubbling)
Explain transportation coverage (property)
Property that is damaged while being carried in an automobile or attached trailer while being transported by a common carrier is covered against the following perils:
Collision
Derailment
Upset
Strandin
Overturn
Sinking
Explain theft coverage (property)
-covers insured personal property anywhere in the world subject to certain limits
-There is no coverage for theft caused by a tenant in a part of the insured home that is rented to a tenant, the tenants family, of the tenants employee
-no coverage for theft for a building under construction
-no coverage for theft of animals, birds, or fish
-no coverage when by fraud or trickery, a change of ownership in property takes place with the insureds agreement
Explain electricity coverage (property)
Some policies provide coverage for electrical damage for voltage surges caused by artificially generated electricity
What are some extensions of coverage on a property policy?
-Debris removal of insured property from the premises as a result of an insured loss
-Cost of removing insured property from the premises to protect it from loss for up to 30 days or until the policy term ends, whichever comes first
-Personal property in transit to another home to be occupied as the insureds principal, residence up to a specified number of days, unless the policy expires sooner
-Assessments levied against the property owner for the service of a fire department are covered up to $1000 in a typical extension coverage
-Loss of food in a freezer caused by an interruption of electrical power or mechanical breakdown up to a $2000 without a deductible
-replacement or re-keying locks up to a stated dollar amount
-arson conviction rewards up to a stated dollar amount
-coverage for credit card, debit card, forgery, and counterfeit money up to $1000
What is the difference between vacant and unoccupied?
Vacant means that there are no contents and no occupants living in the building
Unoccupied means that there may be content but no people in the building
Explain vacant property coverage
Theft or vandalism losses that occur while the building is under construction or vacant are not covered, even when permission has been granted for construction or vacancy
Vacancy is permitted for up to 30 days for other losses before coverage lapses
What are certain facts about a claim the adjuster will want to establish?
(All property claims)
When the loss occurred
Specific location from which the loss occurred
Who discovered the loss and what time of day
How the loss was discovered
Whether police were notified
Name of landlord, if applicable
Brief description of the residence
Name of household occupants
Nature of any repairs already completed
The insureds story of what he or she believes happened
Description of item or items damaged
Whether a financing contract exists on the damaged items
What are certain facts about a claim the adjuster will want to establish?
(Theft and burglary claims)
How entry was gained to the premises
Whether visible signed of the entry and exist
Confirmation whether doors and windows are kept locked
Whether an alarm system is in place
Whether an alarm system is kept activated
What is involved in estimating building damage claims?
Notes cause and severity of damage
Measures the dimensions of floor, walls and ceilings
Documents the number of doors, windows, and other openings
Details each restoration activity with a description of the material
Details the damage and what must be done to restore the property
Identifies all damaged areas
Identifies what kind of subcontractors will be needed
Considers whether others agar may ensure because of the repair process
Identifies how much demolition, debris removal, and final clean up is required
Explain single limit
Allows the insured to use the sum of the insurance building, detached private structures, contents, and additional living expenses as a single amount that can be applied to any category as required
