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Fundamentals of Insurance > Chapter 6: Personal Property Insurance > Flashcards

Chapter 6: Personal Property Insurance Flashcards

1
Q

When only 1 person is named as the insured on the policy and a claim is made by their “spouse” or common law partner, the insurer will agree to pay the claim when certain evidence is provided to it. Identify 3 ways in which such persons might qualify for coverage…

A
  1. prove person is married to the named insured
  2. person living with named insured in a relationship for a period of 3 years
  3. natural/adoptive parent of a child living with named insured for 1 year
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2
Q

Identify 4 persons included in the definition of “you” or “your” and who would be “insureds” under the policy

A
  1. person named on the policy
  2. spouse/partner of the named insured
  3. relatives that live with insured
  4. any person under 21 in the care of the named insured (excludes boarders and roomers = tenants)
  5. students attending school (must be supported by named insured if temporarily away)
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3
Q

Definition of “dwelling”

A

private residence

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4
Q

Definition of “premises”

A

land within lot lines

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5
Q

4 coverages provided by Section 1: Property Coverages

A
  1. dwelling building
  2. detached private structures
  3. personal property
  4. additional living expense
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6
Q

Section 2: Liability Coverage

A
  1. personal liability
  2. voluntary medical payments
  3. voluntary payment for damage to property
  4. voluntary compensation for residence employees
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7
Q

Extensions of Coverage

A
  1. debris removal - additional 5% of coverage A
  2. property removal - extends removal clause to 30 days
  3. moving to another home in Canada - covers new place & property while in transit for up to 30 days
  4. fire department expense - up to $1000 if need to call fire department
  5. change of temperature - covers indirect damage to personal property inside dwelling if dwelling was damaged by insured peril
  6. freezer food - provide up to $2000 when food is damaged due to “power failure” or “mechanical breakdown”
  7. lock replacement - up to $500 only keys are stolen and reported to police
  8. tear out - cost to repair walls, ceilings, etc which must be torn apart before water damage from pipes can be repaired
  9. arson conviction reward - up to $1000 with no deductible
  10. credit/debit cards, forgery or counterfeit money - $1000 max
  11. inflation protection - covers increased cost of replacing due to inflation
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8
Q

Identify the items insured under Coverage A - Dwelling Building

A
  1. dwelling and attached structures: main house + garages, carport, porches attached, etc
  2. permanently attached outdoor equipment: children’s swings, tree house, sprinklers
  3. outdoor swimming pool and attached equipment: in or above ground (ie. hot tubs)
  4. materials and supplies: used in construction or repairs (not for new home building)
  5. building fixtures temporarily removed: while at repair/seasonal storage (up to 10% of dwelling limit)
  6. outdoor trees, shrubs and plants: 5% of dwelling limit up to $500 per plant. Limited to fire, lightning, explosion, impact, riot, vandalism (excludes: windstorm or hail damage)
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9
Q

Coverage B - Detached Private Structures includes…

A

any structure or building separated by open space

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10
Q

State the 3 Insuring Agreements included within Coverage C - Personal Property

A
  1. on premises coverage: only covers “usual” property (stuff normally found in homes), excludes property belongings to roomers & boarders, covers property of others in the care of the insured (storing a friend’s stuff)
  2. off premises coverage: anywhere in the world temporarily away from premises
  3. property of students: covers if a full time student living away from home
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11
Q

Identify 3 types of personal property items excluded under Coverage C - Personal Property

A
  1. motorized vehicles or their equipment (ie. golf cart, ATV): except “domestic” vehicles (ie. lawnmowers, wheelchairs)
  2. campers, trailers or their equipment
  3. aircraft or their equipment
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12
Q

Identify 2 types of losses for which “Special Limits of Insurance” are provided

A
  1. property damaged by any insured peril:

2. property stolen or lost

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13
Q

Special Limits of Insurance for property damaged by any insured peril

A
  • business property ($2000 max)
  • securities ($2000 max)
  • student’s property when temporarily away from home ($2500 max)
  • money ($200 max)
  • garden tractors and accessories ($5000 max)
  • watercraft and accessories ($1000 max)
  • computer software ($2500 max)
  • spare car parts ($1000 max)s
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14
Q

Special Limits of Insurance for property stolen or lost

A
  • jewelry, watches, gems, furs ($2000 max)
  • coin/coin collection ($200 max)
  • manuscripts and stamps ($1000 max)
  • card collections ($1000 max)
  • bicycles and equipment ($500 max)
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15
Q

Identify 2 coverages provided under Coverage D - Additional Living Expense

A
  1. additional living expense: covers extra expense to maintain normal standards of living due to necessary relocation after home damaged by insured peril (ie. lodging, moving, meals, kennel)
  2. fair rental value: pays lost rental income
    - pays up when denied access by civil order due to dangerous condition caused by insured peril from outside the premises
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16
Q

State the basis of claim payment under Coverage D - Additional Living Expense

A

payment is limited to those costs “over and above” what it would normally have cost the insureds to live had the loss not occurred

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17
Q

3 types of Homeowners Insurance

A
  1. Basic
  2. Broad
  3. Comprehensive
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18
Q

Homeowners Basic Form covers…

A
  1. Fire or lightning
  2. Explosion
  3. Smoke
  4. Falling object
  5. Impact by aircraft or land vehicle
  6. Riot
  7. Vandalism or malicious acts
  8. Water damage
  9. Windstorm or hail
  10. Glass breakage
  11. Transportation
  12. Theft
  13. Electricity
19
Q

Homeowners Broad Form covers…

A

property for Named Perils (like Basic) and buildings for all risk

20
Q

Homeowners Comprehensive Form covers…

A

broad form + property for ALL risks

21
Q

Advantages of comprehensive form

A

insures all losses unless specifically excluded. IE:

  1. smoke damage to dwelling from fireplace
  2. damage to dwelling from impact by vehicle driven by “insured”
  3. damage to carpet from spilled paint
  4. loss of jewelry falling down drain
22
Q

Exclusions of comprehensive form

A
  1. sporting equipment due to use
  2. wear and tear / mechanical breakdown
  3. settling of building
  4. damage to property while being worked on if results of work
  5. caused by birds or vermin (building glass is insured, ie. bird strikes)
  6. snowslides, landslides, earthquake or general earth movement (resulting fire/explosion is covered)
  7. water damage
23
Q

Exclusions of basic form

A
  1. buildings for business use without permission from insured
  2. property on display at exhibition
  3. property illegally acquired
  4. dwelling vacant more than 30 days
  5. property damaged by intentional act by insured or his agent
  6. damaged by application of heat (ie. clothes damaged in a dryer)
  7. release of fuel oil (ie. spill from an oil furnace)
24
Q

Underwriting homeowners forms - how limits of insurance determined for Section 1 - Property Coverages

A

coverages are based on replacement cost value

Coverage A- Dwelling Building: replacement value
Coverage B- Detached Private Structure: +10% of Coverage A
Coverage C- Personal Property: +70-90% of Coverage A
Coverage D- Additional Living Expenses: +20% of Coverage A
Coverage E- Personal Liability: $1Mill
Coverage F- Voluntary Medical Payments: $1000 per person (no deductible)
Coverage G- Voluntary Property Damage Payments: $500 per occurrence (no deductible)
Coverage H- Voluntary Compensation for Residential Employees: as per schedule
Single Limit Policies: all of the above limits combined into 1

25
Q

Special policies and endorsements which can be added to homeowners forms…

A
  1. watercraft
  2. personal computer
  3. coin & stamp collections
  4. jewelry/furs
  5. antiques/fine arts
  6. cameras
  7. musical instruments, etc
26
Q

Other Habitational Forms

A
  1. Mobile Home
  2. Condo
  3. Tenant’s package
27
Q

Mobile Home Insurance

A

dwelling includes permanently installed furniture or fixtures/equipment

Emergency Removal Expense included: +5% amount of insurance when necessarily removed because of threat of insured peril for expenses for disconnecting power/water & transportation

No coverage while in transit

28
Q

Condominium Unit Owners Insurance

A

Units owned separately forming a strata corporation. Strata’s policy insures original value of building and common elements

common elements includes: parking, walkways, landscaping, recreational areas

29
Q

Other Essential Coverages for condominium unit owners to purchase

A
  1. Unit improvements: $1000 replacement cost
  2. Loss assessment: when the strata’s policy isn’t enough to cover loss to common elements ($5000 or x% of personal property coverage)
  3. Unit Additional Protection: covers value of unit when strata’s insurance isn’t enough
30
Q

Tenants Package Forms

A

covers people who don’t own the residence they occupy

31
Q

Rented Dwellings

A

for rental properties (usually actual cash value only)

usually not offered unless insurer also insures the client’s principle residence

32
Q

Excludes loss caused while the building is under construction or vacant even if permission is given by the insurer

A

Vandalism or malicious acts

33
Q

Covers damage caused from hot water heaters and domestic boilers but not that due to water hammer

A

Explosion

34
Q

Excludes loss or damage to television antennae and satellite dishes

A

Windstorm or hail

35
Q

Coverage is provided only if the object causing the damage first strikes the exterior of the building

A

Falling object

36
Q

Includes damage to electrical devices from a natural source

A

Fire or lightning

37
Q

Excludes loss to watercraft and personal property in a vacation trailer owned by the insured

A

Transportation

38
Q

Excludes damage caused by insureds and injury or death to pets owned by them

A

Theft

39
Q

Excludes coverage when loss caused by tenant, employee or member of the tenant’s household

A

Impact by aircraft or land vehicle

40
Q

Coverage is provided only where loss arises out of the sudden, unusual and faulty operation of certain types of appliances or units

A

Smoke

41
Q

No coverage exclusions apply

A

Riot

42
Q

Personal property items such as vases, lamps and glass ornaments are not covered by this peril

A

Glass breakage

43
Q

Covers losses caused by power surges and brown outs

A

Electricity

Fundamentals of Insurance (13 decks)

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