Chapter 5 Flashcards

Regulation of Insurance Contracts

1
Q

In this province, automobile insurance is sold by private insurers.

A

Ontario

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2
Q

this Act regulates automobile insurance through policy wordings for owned private passengers vehicles, garages, and drivers.

A

Ontarios’ Compulsory Automobile Insurance Act

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3
Q

it contains the legal rules governing the operation of the insurance industry as well as rules applying specifically to insurance contracts.

A

Ontario’s Insurance Act

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4
Q

The Insurance Act requires that certain mandatory details be stated, or declared, within every contract of insurance.

A

Contents of an Insurance Contract

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5
Q

also know as the “coverage summary”, is the portion of an insurance policy containing a summary of the compulsory information

A

Declaration

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6
Q

the other six items of an insurance contract inlcude

A

Parties to the contract
Policy period
Insurable interest of others(if any)
Type of insurance and amount of coverage
Rate and premium charged
Subject matter of insurance

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7
Q

It’s part of the contract where both the name of the insurer and insured must be shown. The insured is the first party to the contract, while the insurer is the second party.

A

Parties to the contract

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8
Q

part of the contract where both start date and expiry date of an insurance MUST stated on the policy declarations page.

A

Policy Period

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9
Q

The two time zones in Ontario

A

Eastern Standard Time and Central Standard Time.

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9
Q

The Insurance Act makes the effective default start at ____ local time

A

12:01 am

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9
Q

The person or entity named in an insurance policy who will receive the payout if a loss occurs. It’s typically someone who has a financial interest in the insured property, such as a lender or mortgage holder.

A

Loss Payee

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10
Q

The amount of money specified in an insurance policy that will be paid out to cover losses. It’s the sum of money designated to compensate for damages or losses incurred.

A

Loss Payable

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10
Q

The financial stake or potential loss someone has in a property or person being insured. It ensures that the person or entity purchasing insurance will suffer financially if the insured item is damaged or lost.

A

Insurable Interest

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10
Q

part of the contract that must include is the specific insurance coverages and the sum of insurance applying to each item to be insured.

A

Type of Insurance and Amount of Coverage

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11
Q

is the cost of insurance per unit of exposure.

for example, the rate charged to insure a building will depend on many factors, including, construction, and fire protection.

A

Insurance rate

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12
Q

is what the insured pays for the policy. It is calculated by multiplying the rate by the number of exposure units

A

Insurance premium

13
Q

part of the contract where the object of insurance must provided and it must clearly identify the item(s) insured and their location(s).

A

Subject Matter of Insurance

14
Q

Many property insurance restrict coverage on insured property to the location identified on the policy declarations page. If a loss happens when the insured property is not at the specified location, there is no coverage.

A

Removal Coverage

15
Q

in this part of contract, Insurance Act requires that property policies insuring against the peril of fire be extended to cover insured property if it must be moved to another location to eliminate or reduce further loss.

A

Removal Clause Exception

16
Q

Most property insurance policies contain clauses limiting the liability for a loss to an amount less than the limit of insurance purchased by the insured.

deductible clause the co-insurance clause are two examples of this

A

Limitation of Liability Clause

17
Q

The Insurance Act requires all polices containing any such clauses to have the words

A

This policy contains a clause(s) that may limit the amount payable.

18
Q

This word derived from Latin which means “To put oneself into the place of another”

A

Subrogation

19
Q

Where the net amount recovered whether by action or on settlement is, after deduction of the costs of the recovery, not sufficient to provide complete indemnity for the loss or damage suffered, the amount remaining shall be divided between the insurer and the insured in the proportion in which the loss or damage has been borne by them

A

Pro-rating recovery

20
Q

All changes to an in-force policy must be in writing if they are to be binding on the insurance company.

A

Waiver of Term or Condition

21
Q

When a policy insures a property against the peril of fire, the Insurance Act requires the following three conditions be met

A

Basic Coverage
Standard Exclusions
Statutory Conditions

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