Chapter 6 Flashcards
What is among the most important part of any property policy provision?
What is not covered: the exclusions
List 2 types of losses removed by exclusion
Types of property that are not insured
Perils that are never insured against or sometimes not insured against
True or false exclusions never expand policy coverage but always restricted it
True or false: they removed loss exposures that are considered undesirable or uninsurable
Both statements are true
True or false some exclusions may be amended or overridden by special endorsements or coverage?
True
True or false exclusions must be permanent
False: exclusions may be temporary or permanent.
T/F: exclusions May exclude only a part of the coverage
T/F: Canadian quartz interpret coverage provisions narrowly and exclusion clauses broadly
First statement is true
Second statement is false: these principles are used by Canadian courts to interpret property insurance policies. Generally, the coverage provisions are interpreted broadly and the exclusion clauses narrowly
Explain how exceptions to exclusions are used and how they relate to specified perils
In the IBC all risks habitational forms, some of the exclusions that limit coverage are qualified by exceptions to those exclusions in the form of the specified perils listed later in the policy. That’s, the exclusion applies to all losses except a loss that is caused by one of the specified perils
Why is it important that the claims adjuster understands the exclusion wording of the insurance policy?
It’s important that the claims adjuster understands the exclusion wording of the policy because named pearls coverage ensures only against loss or damage caused by the list of perils but all risk coverage ensures against loss or damage caused by apparel that is not excluded, that makes it critical to understand it not only the perils and trade against under the policy but also the exclusions.
explain how the owner shifts from the insured to ensure Earth and back to the insured when reading the perils, exclusions, and exceptions to the policy
- determine whether there is coverage under the policy by looking at what the insured under the policy and under what circumstances. The onus is on the insured to show that the loss or damage falls within coverage
- if there is coverage, next determine whether any exclusions apply to the circumstances of the loss or damage. The ownership to the insurer to demonstrate that the coverage is excluded
- if an exclusion applies. Determine whether there is an exception to the exclusion that restores coverage despite the exclusion. The owners falls back to the insured to establish that an exception is triggered
T/F all property excluded under broad forms is also excluded under comprehensive forms
T/F all property excluded under broad forms is excluded under basic forms
First statement is false since the comprehensive form is the broadest form, all the property it excludes is also excluded under the broad and basic forms.
Second statement is true
T/F all pearls excluded under broad forms is also excluded under comprehensive forms
T/F all perils excluded under broad forms is excluded under basic forms
First statement is false since the comprehensive form is the broadest form, all the property it excludes is also excluded under the broad and basic forms
Second statement is true
If a peril is excluded from comprehensive forms via exclusion, then it is excluded under basic forms list the three possibilities as to why this is true
It does not fall under the named perils coverage of either form
It is specifically excluded within the description of a named peril
Falls within the exclusions listed in the form
T/F: in order to exclude coverage based on the legality of possession of certain property, the insured must first have been convicted under the law of the illegal possession.
True
Explain what subject to forfeiture means regarding property not stolen give an example
it would be against public policy to provide coverage for property that can be lawfully subject to forfeiture. A common example of this involves an insured who illegally imports personal property into Canada by not declaring the goods in accordance with the customs act. the property is subject to forfeiture for a period of 6 years after it is illegally imported into Canada
Why are each of the following exclusions used? buildings for businesses or farming, property on exhibit, property illegally acquired or subject to forfeiture, and evidence of debt or title.
Buildings for businesses or farming - habitual insurance is more homogenous and highly automated than commercial insurance and must be managed differently
Property on exhibit - property on exhibit faces unique exposures to loss not contemplated in the design of these forms
Property illegally acquired or subject to forfeiture - the policy excludes such loss subject to the criminal code and other laws
Evidence of debt or title - the exclusion for evidence of debt or title denies coverage for property that may be insured by other forms specifically designed for it
Why is sports equipment excluded from broad and basic forms but not comprehensive forms?
this exclusion is not found in the homeowners basic or broad form because in both of those forms coverage C is not insured for all risks. The risk is more then the policy can sustain
You’re expensive purebred dog is killed via a specified peril is the loss covered? If the peril is being hit by a car is lost covered?
animals, birds, or fish are excluded unless the laws are damaged is caused by a specified peril other than impact by aircraft or land vehicle.
So the loss would not be covered if the animal got hit by a car
you live in bath and purchase firewood and kindling for $500 for your backyard. Fire Rangers confiscate the wood and destroy it viewing it as a fire hazard. Is the lost covered? they also sees a stereo that was reported stolen with registered serial number is that covered?
under property lawfully seized coverage is restored if the property was seized and destroyed by government agencies to prevent the spread of fire. So the first claim would be covered however the second claim would not be covered because most residential forms exclude lost to property lawfully seized confiscated especially if the policy covers loss by theft
Explain why satellite dishes are excluded from extreme weather events coverage such as hail, and windstorm, etc. For which if any of basic, broad, and comprehensive covers is it not excluded?
loss or damage to outdoor radio and TV antenna including satellite receivers and their attachments is not covered when caused by windstorm or hail weight of ice snow or sleet or collapse.
this exclusion is found in the wind storm or hail peril in the homeowners basic form but reappears in the broad and comprehensive form as a policy exclusion to ensure that the loss is not covered under any of the policies.
explain how scratches and chipping is handled for breakable items? When are they covered? When is the coverage reintroduced? Can the insured get coverage for all perils if they so choose? And why the need for this type of exclusion?
Many types of personal property may be scratched or braided small accidents may damage them seriously even Irreparably, severely reducing their worth. Fragile or brittle articles breaker chip easily with normal handling or when dropped, knocked over, or accidentally struck by another object. Such losses are excluded in the homeowners forms
but special insurance is available for a special vulnerable articles, often under separate policies or a separate rider’s attachment to the homeowners policy
breakage of fragile or brittle articles is excluded and less caused by a specified peril, and accident to a land vehicle, watercraft or aircraft or theft or attempted theft.
which forms have the wear and tear exclusion, why is it necessary, and what can the insured do to mitigate or handle the loss?
the comprehensive and broad forms exclude loss dut to wear and tear deterioration or defect. This is an exclusion of a kind often found in the all risks coverages.
It’s purpose is to avoid disputes about what a risk is. In this case, the excluded causes of loss or not unexpected events but inevitable or inherent in the objects concerned.
The remedy for them is adequate maintenance or to accept them as business or inevitable losses
Which forms exclude laws due to poor design or workmanship? why is it necessary, and what recourse do insurance have if any?
All risk policies exclude loss due to the cost of making good faulty design, material, or workmanship. These are losses due to lack of expertise, lack of care, or both. Insurers do not want to pay for someone else’s poor workmanship.
Cracking is a very nuisance exclusion explain it in detail
the comprehensive and broad forms exclude laws due to settling, expansion, contraction, moving, bulging, buckling, or cracking, including loss or damaged caused by or resulting from pressure exerted by groundwater, except resulting damage to glass of the dwelling and of the detached private structures and less directly or indirectly caused by earthquake.
On this interpretation, if the settling is a direct resultant of sudden, human-made, fortuous events such as compaction of soil on an adjacent property,. a broken water main on municipal property, or a leak in the neighbor sprinkler system, the insurer will not be able to rely on this exclusion and will be required to pay the loss
Why would data loss from a fire be covered but not data loss from viral infection
Data loss from a viral infection is not covered because it can infect thousands of computers and the insurance company wouldn’t survive covering that much loss.
It’s covered from a fire because it’s a fortuitous loss to a single computer so it’s more affordable for the insurance company to cover that type of loss