chapter 3 Flashcards
The three leading causes of fire losses in Canada.
1) Malfunction of electrical or mechanical equipment
2) Arson
3) Misuse of ignition source
6 items required to be shown on a policy declaration page
1) Names of parties to the insurance policy
2) policy period
3) loss payable or payee
4) type of insurance and amount of coverage
5) rate and premium
6) subject matter of insurance
The policy-period start that’s applicable to most commercial property policies.
Policy period takes effect at 12:01 a.m. standard time at the address of the Named Insured as stated on the policy.
What changes can be made to application forms to address concerns relating to coverage commencement?
some insurers have inserts a questions on the application form indicating when the coverage was bound by the broker and when the application was completed
What may happen when losses are paid in full to the insured when loss payables are shown on the policy?
insurer will have to pay loss amount to the loss payable for their amount of interest in the risk
what may happen when losses are paid in full to insured and there is no loss payable shown on the policy but it should have been shown
insurer will not be obligated to pay interest of loss payable
The reason why insurers don’t provide breakdowns of coverage rates.
They don’t want to divulge their rates to competitors.
Will increased costs of construction due to compliance with local building bylaws be covered by commercial policies
NO
Provincial legislation requires that policies insuring against the peril of fire must include all of these coverages
Direct loss or damage from fire, lightning and explosion of natural, coal or manufactured gas.
These conditions increase the physical hazard for which coverage is excluded by the Fire Policy
Vacancy, unoccupancy and when premises are shut down.
Summary of the by-laws exclusion
Any increase in the costs to rebuild, repair or replace the insured’s building after a loss that are incurred to comply with a law or by-law are not insured.
Provisions of the removal clause.
Coverage is provided for property at location(s) not shown on the policy, as long as the insured can show that the property was “necessarily” removed to prevent loss.
The coverage amount is limited to the insurance amount remaining after payment of any losses at the insured location. Coverage at an unnamed location is limited to the least of 7 days or the remaining policy term
Coverage provided by the Debris Removal clause.
Removal of debris from insured premises after loss or damage to the insured property from an insured peril.
“Vacant.”
Empty, or when the normal occupant is absent and the contents have been removed
“Unoccupied.”
Lack of habitual presence of human beings, or when premises are complete with contents but the person who normally occupies the premises is temporarily away.
What are three examples of local building bylaws which may effect building re-construction
1) improved building material
2) installation of sprinkler systems
3) handicapped accessibility
3 components of the Removal Clause
1) policy will insure property which was removed to unnamed location to protect it from, loss or further loss 2) amount of coverage at the new unnamed location is the remainder of coverage which was not used during loss at the named location
3) duration of coverage at the new unnamed location is the least of seven days or policy expiry
Perils included in the Named Perils Form
A) Fire or lightning
B) Explosion
C) Impact by Aircraft, Spacecraft or Land Vehicle
D) Riot, Vandalism or Malicious Acts
E) Smoke
F) Leakage from fire protective equipment
G) Windstorm or Hail
“Loading.”
An additional rate charged over and above the fire rate.
