Chapter 5

Question 1

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

Answer 1

Ontario

Question 2

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

Answer 2

Ontarios’ Compulsory Automobile Insurance Act

Question 3

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

Answer 3

Ontario’s Insurance Act

Question 4

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

Answer 4

Contents of an Insurance Contract

Question 5

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

Answer 5

Declaration

Question 6

the other six items of an insurance contract inlcude

Answer 6

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

Question 7

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.

Answer 7

Parties to the contract

Question 8

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

Answer 8

Policy Period

Question 9

The two time zones in Ontario

Answer 9

Eastern Standard Time and Central Standard Time.

Question 9

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

Answer 9

12:01 am

Question 9

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.

Answer 9

Loss Payee

Question 10

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.

Answer 10

Loss Payable

Question 10

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.

Answer 10

Insurable Interest

Question 10

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

Answer 10

Type of Insurance and Amount of Coverage

Question 11

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.

Answer 11

Insurance rate

Question 12

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

Answer 12

Insurance premium

Question 13

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

Answer 13

Subject Matter of Insurance

Question 14

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.

Answer 14

Removal Coverage

Question 15

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.

Answer 15

Removal Clause Exception

Question 16

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

Answer 16

Limitation of Liability Clause

Question 17

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

Answer 17

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

Question 18

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

Answer 18

Subrogation

Question 19

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

Answer 19

Pro-rating recovery

Question 20

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

Answer 20

Waiver of Term or Condition

Question 21

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

Answer 21

Basic Coverage
Standard Exclusions
Statutory Conditions