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CAIB 1 > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

What types of personal property exposures are eligible for homeowners’ forms?

A
  • Dwellings containing more than one family
  • Insureds having more than one principal dwelling
  • Mobile homes situated on a full basement
  • Dwellings in the course of construction that an insured will occupy upon completion
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2
Q

What are the main coverage sections of homeowners forms?

A

Section I - Property Coverages

Section II - Liability Coverages

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3
Q

Who is an “Insured” on homeowners forms?

A
  • Person named on the coverage summary page
  • Spouse (while living in the same household)
  • Relatives of either
    Any person under 21 in their care
  • Students enrolled and attending school away from home and are dependent on
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4
Q

What are three types of property not insured by Coverage C?

A
  1. Motorized vehicles or their equipment
  2. Camper units, truck caps, trailers or their equipment
  3. Aircraft or their equipment
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5
Q

Where is personal property insured when off premises?

A

Anywhere is the world when temporarily away from insured premises

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6
Q

What are the “Special Limits of Insurance” in Coverage C?

A

ALL LOSSES

Garden type tractors - $5,000
Property of Students away - $2,500
Computer Software - $2,500
Business property - $2,000
Securities - $2,000
Watercraft - $1,000
Spare automobile parts - $1,000
Money or Bullion - $200

THEFT LOSSES ONLY

Jewellry, watches … - $2,000
Stamp collections - $1,000
Collectible cards - $1,000
Bicycles - $500
Coin collections - $200

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7
Q

Discuss coverages found in Coverage D.

A

Coverage is provided for additional living expenses and fair rental value when dwelling is damaged by insured perils and made unfit for occupancy
Coverage is provided for a reasonable time required to repair or rebuild the dwelling
Coverage for additional living expense is also limited to those additional expenses required to maintain insured’s normal standard of living

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8
Q

Name the “Extensions of Coverage”

A
  • Moving to another home
  • Change in temperature
  • Freezer food
  • Lock replacement
  • Tear out
  • Credit/debit/automated teller cards
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9
Q

How do homeowners forms generally pay losses to dwellings and personal property?

A

Generally, replacement cost is the basis of settlement for losses involving dwellings or personal property.

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10
Q

Define Spouse

A

Spouse = married to the named insured or,
have been living with the named insured in a conjugal relationship for
three years or for one year when the natural or adoptive parents of a child

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11
Q

Describe the “Extensions of Coverage”: Moving to another home

A

Coverage is provided for transportation losses when clients are moving to another home
they will occupy.
Coverage is limited to losses occurring in Canada and duration of
coverage is 30 days.

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12
Q

Describe the “Extensions of Coverage”: Change in temperature

A

Coverage is provided when there is loss to personal property resulting from change of
temperature. Coverage is only provided when there has been damage to either the building or it’s equipment caused by an insured peril. Damaged personal property must
also be in the dwelling for coverage to respond.

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13
Q

Describe the “Extensions of Coverage”: Freezer food

A

Coverage is provided when there is damage to food in a freezer caused by the accidental
interruption of electrical power on, or away, from the insured’s premises. There is no coverage when damage is due to the operation of circuit breakers or fuses or by
accidental disconnection of the freezer. Coverage is also provided for damage to the freezer resulting from insured food spoilage.

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14
Q

Describe the “Extensions of Coverage”: Lock replacement

A

Coverage is provided for replacement or re-keying of locks when the dwelling keys have been stolen and reported to police.

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15
Q

Describe the “Extensions of Coverage”: Tear out

A

Coverage is provided for the tearing out and replacing parts of the dwelling to repair
insured damage caused by waterlines or pipes.

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16
Q

Describe the “Extensions of Coverage”: Credit/debit/automated teller cards

A

Coverage is provided for up to $1,000 resulting from theft or unauthorized use of credit
cards, debit cards or forgery of client’s cheques. Coverage is also provided up to $200 when insured accepts counterfeit US or Canadian paper currency.

No coverage is provided when caused by residents of insured’s household or from people to whom the card is entrusted.

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17
Q

What are three sources of water insured by homeowners comprehensive forms?

A
  1. Water escaping from watermains
  2. Water escaping from domestic water containers located inside dwelling
  3. Water escaping from domestic water containers located outside dwelling
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18
Q

What are three sources of water not insured by homeowners comprehensive forms?

A
  1. Seepage of water
  2. Sewer backup
  3. Ground water
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19
Q

What are two alternatives available to maintain freezing coverage when taking winter vacations?

A
  1. Arrange for a competent person to enter the dwelling daily to ensure the heating
    system was operating.
  2. Shut off the water and drain all pipes and domestic water containers
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20
Q

Define Vacant

A

A property is vacant, regardless of the presence of furnishings when a person normally occupying the premises is absent and has no intention to return

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21
Q

What is meant by the term “Detached Private Structure?”

A

Structures separated from a dwelling by a clear space

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22
Q

What is the limit of insurance provided on all Homeowners Forms for Detached Private Structures?

A

The limit is 10% of the amount of insurance shown on the Homeowners form

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23
Q

Are the limits provided on all Homeowners Forms for Detached Private Structures within the limits of insurance provided for the Dwelling Building or in addition to those limits?

A

Limits for Detached Private Structures are in addition to the insurance provided for the dwelling

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24
Q

What is the coverage territory provided for personal property under Homeowners Forms for the temporary removal of personal property from the insured dwelling.

A

Personal property is insured anywhere in the world

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25
Define Dwelling
Dwelling = the building described of the coverage summary page, occupied by you either wholly or partially as your primary residence
26
Define Premises
Premises = the land contained within the land lines on which the dwelling is situated
27
Describe Coverage A - Dwelling/Building of a Homeowners form
Coverage A - Dwelling/Building covers the - dwelling and all attached structures - permanently installed outdoor equipment on premises - outdoor swimming pools and attached equipment - material and supplies located on or adjacent to the premises for use in construction or an alteration to the dwelling or detached private structure
28
What extensions of coverage are found under Coverage A - Dwelling/Building of a Homeowners form?
Extension of coverage for: - Building fixtures and fittings that have been temporarily removed for repair or seasonal storage - Outdoor trees, shrubs, and plants - Coverage is limited to $500 for any one tree including debris removal - Coverage is named perils only (no windstorm or hail coverage)
29
Name the three types of Homeowners forms
1. Homeowners Basic Form 2. Homeowner Broad Form 3. Homeowners Comprehensive Form
30
Describe Coverage B - Detached Private Structures of a Homeowners form
Any structure separated from the dwelling by a clear space
31
Describe Coverage C - Personal Property of a Homeowners form
Provides 3 separate coverages: 1. Protection for on-premises coverage 2. Protection for off-premises coverage (property that is temporarily removed) 3. Protection for students attending school away from home
32
Whose property is not covered under Coverage C - Personal Property of a Homeowners form?
Property of roomers and boarders are excluded from this coverage
33
What types of property is excluded from Coverage C - Personal Property of a Homeowners form?
1. Motorized vehicles and their equipment 2. Camper units, truck cabs, trailers or their equipment 3. Aircraft or their equipment
34
Please explain restored coverages for certain types of the of excluded property under Coverage C - Personal Property.
Coverage is restored for: 1. Certain types of motorized vehicles such as lawnmowers, snow blowers, garden-type tractors, small water crafts, or motorized wheelchairs or scooters
35
Define "Equipment" as described for the purposes of Coverage C - Personal Property.
Equipment = Any audio, visual, recording or transmitting equipment powered by the electrical system of a motor vehicle or aircraft
36
Describe Coverage D - Additional Living Expense of a Homeowners form
Coverage is provided for: - additional living expenses required to maintain your normal standard of living for a reasonable time required to repair or rebuild the dwelling damaged by an insured peril
37
Name the 13 common extensions found in all Homeowners forms.
1. Debris removal 2. Property removed 3. Moving to another home 4. Fire department expenses 5. Change of temperature 6. Freezer food 7. Lock replacement 8. Tear out 9. Arson conviction 10. Credit & Debit cards 11. Forgery 12. Counterfeit money 13. Inflation protection
38
Describe the common extension (Debris Removal) found in all Homeowners forms.
additional 5% (additional coverage) for removal of debris after loss
39
Describe the common extension (Property Removed) found in all Homeowners forms.
coverage to remove property from premises to prevent further loss for 30 days or the unexpired term of the policy
40
Describe the common extension (Moving to another home) found in all Homeowners forms.
coverage for property while its in transit to another location you will occupy as your home within Canada, only provided for 30 days
41
Describe the common extension (Fire department expenses) found in all Homeowners forms.
up to $1000 coverage to pay expenses billed by neighbouring municipalities if charged
42
Describe the common extension (Change of temperature) found in all Homeowners forms.
coverage for property damage due to a change in temperature provided the dwelling/equipment was damaged by an insured peril and the the property was in the dwelling at the time of loss
43
Describe the common extension (Freezer food) found in all Homeowners forms.
- $2000 of coverage for food spoilage from accidental power interruption on or away from premises - Coverage provided for loss to freezer itself from food spoilage - No coverage when loss results from operation of circuit breakers or fuses or disconnection of freezer
44
Describe the common extension (Lock Replacement) found in all Homeowners forms.
- up to $500 of coverage to replace the locks or re-key the locks in your home if your keys were stolen (must report to police)
45
Describe the common extension (Tear out) found in all Homeowners forms.
Coverage for costs to expose plumbing and appliances to repair insured losses (water damage) No coverage: for tear out requirements to repair damage caused by a broken water main or from water damage from a swimming pool
46
Describe the common extension (Arson conviction reward) found in all Homeowners forms.
Up to $1000 (reward) towards conviction of any arsonist who caused damaged to your dwelling
47
Describe the common extension (Credit & Debit cards) found in all Homeowners forms.
Up to $1000 (incl. forgery, counterfeit money) coverage for amounts billed to you card when stolen and used in an unauthorized way (must comply to all conditions to which the card was issued) Cannot be from anyone living in your household or that you entrusted with the card
48
Describe the common extension (Forgery) found in all Homeowners forms.
Coverage provided if your checks are stolen and your signature is forged to be cashed
49
Describe the common extension (Counterfeit Money) found in all Homeowners forms.
Up to $200 coverage if you accept CDN or US currency in good faith and it turns our to be counterfeit
50
Describe the common extension (Inflation protection) found in all Homeowners forms.
51
How are claims generally paid for damage to your dwelling or detached private structure?
Receive replacement cost, but must: - Build on same location for the same occupancy from materials of similar quality
52
What is another method that you may be paid for damage to your dwelling or detached private structure?
Guaranteed Replacement Cost - guarantees that they will rebuild your home regardless of the amount of the expense, even if the amount exceeds the amount on the insurance policy Must: - Insurance home for amount agreed upon by insurer (100%) - Cannot reduce the amount of coverage during the policy year - All changes/renos must be reported to the insurance company within 90 days
53
How are claims generally paid for personal property claims?
Receive replacement cost However some property will not receive replacement cost: electronic media, books of accounts, drawings, card index systems (financial records) Will receive ACV for items that cannot be replaced (i.e., fine arts, collectibles, souvenirs, etc.) Will not receive replacement costs for item that do not work
54
Define Replacement Cost
Replacement Cost = the lesser of actually repairing the damaged property or replacing the damaged property
55
Define Actual Cash Value
Actual Cash Value = the replacement cost today minus depreciation
56
Describe Pair and Set Clause found in Homeowners policies
If only one half of a pair is lost the item that was not lost will continue to have value and is taken into account when settling the claim
57
Describe Parts Clause found in Homeowners policies
Will only pay for the lost or damaged part
58
Describe Deductible Clause found in Homeowners policies
Deductibles are the amount the client must absorb when there's a loss - per occurrence - applies to loss itself and not the special limit for items that have special limits of insurance
59
Describe how coverage is underwritten for homeowners policies
The amount of Coverage A - Dwelling/Building is generally generated by a computer program, from this amount all other coverages are set Coverage B - Detached Private Structures will be 10% of the amount of Coverage A (in addition to) Coverage C - Personal Property will generally be 90%-100% of the amount in Coverage A (in addition to) Coverage D - Additional Living Expense will receive 20% of the mount of Coverage A (in addition to )
60
What are the 13 perils covered by the Homeowner Basic Form?
1. Fire or Lightning 2. Explosion (ex. water hammer) 3. Smoke (ex. fireplace) 4. Falling Object 5. Impact by Aircraft or Land Vehicle 6. Riot 7. Vandalism or Malicious Acts (ex. vacant, course of construction) 8. Water Damage 9. Windstorm or Hail (interior only, ex. radio/tv antenna) 10. Glass Breakage (ex. personal property) 11. Transportation (ex. in trailer, watercraft damage) 12. Theft 13. Electricity
60
What water damage losses are excluded from coverage under a Homeowners basic form?
1. Freezing when away from home for more than 4 consecutive days (unless) 2. Seepage or leakage 3. Sewer back up 4. Ground water 5. Surface water 6. Ice build up 7. Damage to water main or appliance 8. Losses when vacant or course of contruction
61
What property is excluded from coverage under the Homeowners Basic Form?
1. Buildings used in whole or in part for business or farming 2. Property on display 3. Illegal property
62
Describe what is meant by 'all risk' coverage?
'All Risk' coverage covers all risks of direct physical loss or damage subject to policy conditions and exclusions. If it's not excluded its covered
63
What are the advantages of the Homeowners Comprehensive Form?
- All risk coverage - Smoke from fireplace is insured - Collapse of roof coverage due to rain or snow load - Impact from vehicles operated by insured persons (not covered under basic form) - All other losses not excluded
64
What unique exclusions are found under the Homeowners Comprehensive Form?
- No coverage for loss/damage caused to sporting equipment when due to use - No coverage for animals, birds, or fish, except coverage is restored when loss is due to specified perils - No coverage for scratches, abrasions, shipping, or breakage of fragile or brittle articles - No coverage for wear and tear, deterioration, defect, or mechanical breakdown - No coverage for the cost of making good any faulty material or workmanship - No coverage for settling, expansion, contraction, moving, bulging, buckling, or cracking (coverage restored for damage to building glass) - No coverage for losses caused by birds, vermin, rodents, or insects (coverage restored for damage to building glass) - No coverage for smoke from industrial operation or agricultural smudging - No coverage for earthquake, snow slides - No coverage vandalism or glass damage when dwelling is under construction or vacant - No coverage for rust or corrosion - No coverage for fuel oil spills
65
IBC's homeowners' forms are seldom used in their unabridged form. Explain why this is.
Increased competition for homeowners' insurance business has led to these forms to being amended to make them more attractive to consumers
66
Even though not named on the policy, a person who is not legally married to the Named Insured can qualify for coverage. Outline the criteria set by the insurer to determine if such person is eligible for coverage
1. Have lived together in a conjugal relationship continuously for 3 years OR 2. Are the natural or adoptive parents of a child for a period of one year
67
Identify the two categories of property having Special Limits of Insurance
1. Specified property items which have been stolen, or which were lost damaged by other broad perils 2. Those which apply to specified property items, regardless of the cause of loss
68
Explain the conditions applicable to any claim for Additional Living Expenses under Coverage D - Additional Living Expense
- The dwelling is damaged by an insured peril - The damage is sufficient to make the dwelling unfit for occupancy, or requires the insured to move out during repairs Payment is limited: - only additional expenses incurred after the loss - incurred to maintain normal standard of living
69
Explain the coverage provide for mass evacuation under the homeowners form
Coverage is also provided for a period not exceeding 2 weeks for any necessary increase in living expense when an order for "mass evacuation" is made by a civil authority. Must be sudden/accidental in Canada or the US
70
Assuming the insured's homeowner policy provides $140 000 coverage on the dwelling, indicate the amount of insurance provided for each of Coverage B and D under that policy
Coverage B - 10% of Dwelling Amount = $14 000 Coverage D - 20% of Dwelling Amount = $28 000
71

CAIB 1 (9 decks)

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