Chapter 7 Endorsements and Floaters Flashcards
The function of an exclusion is:
a) To expand on coverages according to underwriting guidelines
b) To remove exposures according to underwriting & rating guidelines
c) To restrict policy extensions
d) To remove policy conditions
b) To remove exposures according to underwriting & rating guidelines
What legal doctrine applies particularly to endorsements?
a) Utmost good faith
b) Ab initio
c) Contra proforentum
d) Law of large numbers
c) Contraproforentum
Sewer backup coverage limits in areas that are prone to flooding are usually:
a) 25,000
b) 50,000
c) 15,000
d) 10,000
d) 10,000
Which of the following is one of the high risk areas for earthquake in Canada?
a) Alberta
b) British Columbia
c) Saskatchewan
d) Prince Edward Island
b) British Columbia
Musical instruments can be insured on a floater but unless otherwise specified on the declarations page coverage would apply only when:
a) On the insured premises
b) Not being used
c) Being played at an appearance
d) Locked up
a) On the insured premises
Name 2 of the common types of endorsements.
Sewer backup, flood, earthquake, vacancy permit, by-laws, home-based business, identity theft
Explain what coverage is provided by the Identity Theft endorsement
Provides coverage for costs accrued with restoring an insured’s identity.
Legal costs to notify the appropriate authorities
Liaison between the insured and financial institutions
Lost wages for time off work to mitigate the loss; usually $500 per week limit
Loan application fees
Legal fees to defend against lawsuits as a result of identity theft
Long-distance phone charges
a credit-monitoring service for a certain amount of time
limited to a specific amount per occurrence. ranging from $10,000 to $30,000.
Appraisals are often required for property insured under a floater. What 4 things do those appraisals verify?
COVE:
condition,
ownership,
value
existence of the item to be insured
Possessing software that has been illegally acquired is considered copyright infringement or piracy and is in violation of what federal act?
a. Personal Information Protection and Electronic Documents Act
b. Access to Information Act
c. Copyright Act
d. Canadian Anti-Piracy Act
c. Copyright Act
Sewer systems are usually publicly owned and disposes of what kind of material?
a. Recycled material
b. Potable water
c. Waste water
d. Garbage disposal material
c. Waste water
The insurer will not pay for increased costs due to any law regulating the zoning, demolition, repair, or construction of buildings and their related services. Which endorsement will address this limitation and extend coverage?
a. Identity theft endorsement
b. Vacancy permit
c. Home-based business endorsement
d. Bylaws endorsement
d. Bylaws endorsement
The purpose of a homeowners floater is to provide additional coverage for which types of items?
a. Commercial property
b. Personal property on exhibit
c. Movable and portable personal property
d. Stationary personal property
c. Movable and portable personal property
The rates for an earthquake endorsement are based on all of the following factors, EXCEPT
a. Geographic location
b. Building design, construction, and age
c. Occupancy
d. Municipal bylaws
d. Municipal bylaws
What is an endorsement?
a. A coverage to add for highly mobile contents such as jewellery
b. An amendment added to a written document
c. A contract to promote a product
d. An exclusion
b. An amendment added to a written document
Which is the most appropriate concise definition of contra proferentem?
a. Against the insurer
b. Against the insured
c. Against the additional named insured
d. Against the lienholder
a. Against the insurer
Which of the following is a list of items individually covered by a policy?
a. Schedule of insurance
b. Appraisal
c. General personal contents
d. Itemized list of personal contents
a. Schedule of insurance
Which of the following reports shows the value, mechanical condition, safety, and evidence of any physical damage of a watercraft?
a. Watercraft report
b. Boat survey
c. Marine survey
d. Pleasure craft report
c. Marine survey
Which of the following would be covered by Coverage C of the homeowners forms?
a. Aircraft
b. Camper units
c. Canoe
d. Motorized vehicle
c. Canoe
Lost wages as a result of time off work to mitigate the loss is generally limited to what amount?
a. 300 per week
b 100 per day
c. 500 per week
d. 200 per day
c. 500 per week
Which section of the policy covers Detached Structure?
a. A
b. B
c. C
d. D
b. B
Separated from the dwelling by a clear space or connected only by a fence or utility line. such as, Detached garage, Shed, or
greenhouse
Which section of the policy covers Personal Property?
a. A
b. B
c. C
d. D
c. C
Personal property not permanently attached to the dwelling.
Covers belongings temporarily away from home
Which section of the policy covers the dwelling/building?
a. A
b. B
c. C
d. D
a. A
Covers dwelling and any structures attached to the house that is
permanent installed such as fenced, gated gas pipeline
Material and supplies intended for use in construction or repair
Which section of the policy covers Additional living expensed
a. A
b. B
c. C
d. D
d. D
Endorsement is NOT?
a. An amendment added to a written document
b. An agreement between parties alerting its provision
c. Used to override specific terms
d. A clause added for exceptions
d. A clause added for exceptions
Endorsements are meant to what?
An endorsement is an amendment added to a written document, particularly an agreement between parties, altering its provision. Endorsements override specific terms in a policy by:
Removing coverage of certain proper or perils
Adding warranties or additional condition
Alerting or removing policy conditions or limitations
offering permission for activities, occupancy, or parties that may not otherwise be covered
What are the two groups of Exclusions
Property not insured
Loss or Damage not insured
The function of an exclusion is:
a. To remove policy conditions
b. Enhance limits or perils
c. Alerting or removing policy conditions or limitations
d. limit amount paid on a claim
c. Alerting or removing policy conditions or limitations
High-value homes are generally homes greater than:
a. 1 million
b. 2 million
c. 3 million
d. 4 million
a. 1 million
What additinal innovative coverage is included in High value homes
Home appraisal expense
Cash payout option
Increased special limits
Kidnap expense coverage
Equipment breakdown coverage
The purpose of a home appraisal is to what?
Estimate the cost to rebuild the home
Document custom features
to make sure that an adequate amount of insurance is carried on the home.
In what province is the Strata Property Act used?
a. Alberty
b. Quebec
c. Saskatchewan
d. British Columbia
d. British Columbia
What perils are NOT covered even with a vacany permit?
Vandalism
Water damage
What 3 extensions are not found in the Seasonal form
Personal property away from premises
The additional living expense as a result of damage by an insured peril.
additional living expenses because access has been prohibited
What qualifies as a hobby farm
-The primary dwelling has to be owner-occupied
-Has to be less than 25 acres
-Maximum of 5 farm animals
-Maximum of 10 Poultry
-Maximum income from farm $10 000
-No farm employees
-No customer farming
-No boarding of horses
-No training of horses or riding facility
-Max limit of farm equipment $25 000
Maximum limit of farm-related outbuildings $25 000
A Legal doctrine of contrproferentum applies particularly to endorsements. What does this legal document state
a. if there is any ambiguity in the policy wording, it will be in the favor of the insured
b. An endorsement that unreasonably restricts coverage, especially when removing coverage for the fire might be unenforceable
c. The language & intent of an endorsement must be clear in order for the insurer to enforce it.
Common type of endorsement
-Sewer Backup endorsement
-Water Endorsement
-Earthquake Endorsement
-Vacancy Permit
-Bylaws Endorsement
-Work from home
-Home-based Business
- Identity Theft Endorsement
The IBC water endorsements have their own deductible and do not cover loss caused by what 4 perils
Tides or tidal waves
Storm surges
Tsunamis
Seiches
Earthquake rates are based on what factors?
Construction type and Age
Hight of the building and Building design
Geographic location
Occupancy
Soil conditions
Earthquake endorsements include coverage for what?
Mudslides
landslide
Volcanic eruption
Another earth movement that occurs at the same time as an earthquake
Aftershock for a period of time specified in the policy can be from 96-168 hours
High-risk earthquake in Canada includes what provinces?
British Columbia
Quebec (Montreal, Quebec City)
Ontario (Ottawa, St Larence River Vally)
Complying with codes and extend the duration of the repairs which can affect consequential loss such as?
Additional living expense
This is not covered unless the PH has the bylaw indorsement
True or false - Coverage for loss of income due to business interruption on a homeowner’s policy applies only with a home base business endorsement.
False No coverage for business loss of income even with an endorsement. PH would need a commercial business policy
Which of the following would disqualify a risk as a hobby farm?
a. Five cows
b. Tow farm employees
c. Horsed on the premises
d. 5,000 annual farm income
b. Tow farm employees
Equipment breakdown coverage on a high-value home policy provides a specified amount of insurance for the accidental breakdown of equipment even if caused by?
a. Human error
b. Trickery
c. Manufacturer
d. Terrorism
a. Human error
