Chapter 7 Flashcards
List four ways endorsements override specific terms of a policy
Removing covers for certain property or perils
Adding warranties or additional conditions
Altering or removing policy conditions or limitations
Offering permission for activities, occupancy, or parties that may not otherwise be covered
Explain what a free form endorsement is
an endorsement may be specifically written to address particular circumstances of a risk, this is called a free form endorsement. A free form endorsement is analogous to the perhaps more familiar term manuscript wording, which typically applies to a policy wording uniquely composed or particular risk
Explain how an endorsement may be unenforceable and give an example
And endorsement that unreasonably restricts coverage, especially when removing coverage from fire, may prove unenforceable.
Define manuscript wording
policy wording that does not conform to the standard wording in general use within the insurance industry and that is unique to the policy involved
Define endorsement
An amendment added to a written document particular in agreement between parties altering its provisions
explain why expanding coverage often results in an increase in premium but restriction of coverage rarely results in a corresponding decrease in premium
or were coverages expanded in favor of the insured. Conversely, premium is rarely reduced when coverage is restricted or eliminated, because restricting or eliminating coverage is usually reflects on an increase in risk
Explain why the water endorsement was created
since the sewer backup endorsement does not cover damage from flooding, many inters in the Canadian market have developed a stinking endorsements for residential risks or have combined various water exposures to one endorsement form.
List four important factors that can affect the amount of premium charge for earthquake endorsement
Geographic location
Building design, construction, and age
Occupancy
Soil conditions
T/F earthquake endorsement covers volcanic eruptions that occur at the same time
True
within how many hours of an earthquake can a mudslide occur to be considered the same event according to IBC endorsement form? What if the consequence if events are more than the length of the time apart?
96 to 168 hours or 4-7 days an event that occurs after the specified. Is deemed a new occurrence and subject to a separate deductible amount if the building sustains additional damage
Explain what liquefaction means
we’re structures are built on Sand and silt base soils, vibration caused by Earth moving causes a phenomenon called liquefaction
Explain why the restriction to rebuild on the same site maybe relaxed for earthquake perils
Following a major earthquake, the insurance ability to rebuild in a timely way may be substantially impeded, even if contractors are available to perform the repairs or replacement. Some inters have therefore eliminated the usual requirement and personal property policies to rebuild the structure on the same site. The other policy requirements remain unchanged. This is because the soil that the building or property was built on is now destroyed or damaged
What happens when a covered building is vacant for more than 30 days? What happens if occupancy is restored?
homeowners forms exclude loss or damage if it occurs after the dwelling has, to the insurds knowledge, been vacant for more than 30 consecutive days. the exclusion is triggered after 30 days of vacancy and applies for as long as the vacancy persist after that. The policy is not terminated, however, and coverage is automatically reinstated as soon as the vacancy ends
Explain what a vacancy permit is and how is it used
if an insurer or agrees to maintain coverage on a vacant building, it must Grant permission for the vacancy by way of a vacancy permit, for which additional premium is usually charged
Why is it important that the insurer make the mortgage aware of a vacancy permit when it is approved?
The policy will cover a mortgage even if the named insured has breached a policy condition and is there for unable to recover for a loss so even if the insurance fails to inform the insurer that the insured building is vacant, a mortgagee who was also unaware of the vacancy may still be entitled to coverage in the event of a loss.
Explain why the bylaws endorsement is valuable to the insurance. How does the endorsement affect the policy limits?
following loss or damage, building repairs are Replacements must be performed according to the applicable building codes. Complying with code May extend the duration of repairs, which affects consequential losses such as additional living expenses and may add considerable cost to the restoration process. But the insurer will not pay increase cost due to bylaws that is, due to any law regulating the zone.
Why is identity theft Insurance desirable to insure it’s? Why is it offered by so many insurers?
It’s desirable and offered to insurds because it is affordable to the insurers
List seven things identity theft can cover. What is the typical loss limit per occurrence
- Legal cost to notify the appropriate authorities
- Liaison between the insured and credit bureaus, credit card companies, and other financial institutions
- lost wages as a result of time off work to mitigate the laws, coverage is limited to a dollar amount, usually $500 per week
- loan application fees
- legal fees to defend against lawsuits as a result of identity theft
- long distance phone charges
- in some cases, a credit monitoring service for a specified. After the identity theft
explain the true meaning of the word floater, as it applies to Insurance period distinguish it from the term endorsement. Why are the two often conflicted
Floater policy defined: additional coverage for movable items, like jewelry or antiques, Beyond what’s included in the basic homeowners policy. Also called a rider or endorsement. A policy designed to cover property that floats, or moves, from location to location
the term floater is less widespread than it was, and coverages that were ones called floaters are now sometimes simply called endorsements. But a distinction between the two terms is still recognized
List three ways floaters operate
- Floaters and hands limits or perils for property insured in the policy wording
- floaters provide coverage for scheduled items - that is, items of certain types of property shown on a schedule of insurance ( schedule of insurance - a list of items individually covered by a policy)
- Floaters offer coverage on property that might not be covered otherwise
List four things appraisals verify for an insurance floater
- The existence of the item to be insured
- It’s value
- It’s ownership
- It’s condition
why, given that fine artists covered under personal property insurance would the insured desire of floater for fine Arts stored in their home?
personal property policy settled property claims on the basis of actual cash value or replacement cost. But the value of a work of fine Art depends on the reputation of the artist and may fluctuate much more than the value of more ordinary property insured on the usual basis. Under the fine Arts floater, the insured me therefore choose to insure the item on an agreed value basis.
Explain what a fragile art object is covered for and what it is not
fine Arts or items a personal property and are there for not excluded by personal property policies. But fine arts are often fragile or easily damaged and personal property policies such as homeowners forms do exclude loss caused by scratching, abrasion, or chipping of personal property or breakage of fragile or brittle articles, unless such loss is caused by specified peril, by accident to a land vehicle, watercraft, or aircraft, or by theft or attempted theft
Why is agreed value basis used to determine policy limits for fine Art floaters
the value of a work of fine Art depends on the reputation of the artist and may fluctuate much more than the value of more ordinary property insured on the usual basis under the fine Arts floater, the ensured May therefore choose to ensure the item on an agreed value basis
