Chapters 7-9 Flashcards
What is an “ Extension”?
It is a feature of policy wording that enhances the coverage offered by the policy. It is (already) a part of the policy wording.
What are the 4 most common habitational property extensions?
1) Extension to provide temporary coverage for increased exposures
2) Extensions increase or add coverage for unforeseen costs
3) Extensions expand or restrict the policy
4) Extensions encourage loss prevention and mitigation.
What is an Endorsement?
An amendment added to a written document, particularly an agreement made between parties. It alters the original provisions of the policy
Define “ Free-Form Endorsement “
It is an endorsement specifically written to address particular circumstances of a risk
What is “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
How do endorsements override specific terms in the policy? (4 ways)
1) removing coverage for certain types of property or perils
2) Adding warranties or additional conditions;
3) altering or removing policy conditions or limitations
4) Offering permission for activities, occupancy, or parties that may not otherwise be covered.
What is covered in the Sewer Backup Endorsement? how much coverage (in dollars) is available?
Property owners have no control over the publicly owned portion of the system. The endorsement seeks to:
1) address the exclusion of SBU (sump, septic, sewer)
2) The among of coverage available is limited to: $10K in areas prone to flood and $25k in other areas
What is covered in the “Flood” endorsement?
Canadian insurers have developed distinct flood endorsements for residential risks or have combined various water exposures into one endorsement. It has it’s own deductibles.
What are the exclusions for the “ flood” endorsement? (4)
1) backing up or overflow of water from within the sewers. sumps, septic tanks, or drains located inside of the buddings
2) Water below the surface of the ground
3) Fire, Explosion, Smoke, Leakage from fire-protective equipment, theft, riot, vandalism, or malicious acts
4) Leakages from a water main
What are 4 things must be taken into consideration with the “eathquake” endorsement?
1) Geographic location
2) Building design, construction and age
3) Occupancy
4) Soil conditions
What does the “earthquake” endorsement cover?
It includes coverage for mudslide, landslide, volcanic eruption, or other earth movement that occurs at the same time as an earthquake. (It includes the aftershocks for a period of time, usually between 96-168 hours following the first event)
what is liquefaction?
when an earthquake temporarily reduces the strength and stiffness of a soil that is both composed of unconsolidated sediments and saturated with water ( softening of soil temporarily due to earthquake)
What is a vacancy permit?
If an insurer agrees to maintain coverage on a vacant building, there must be a permit included that is charged at an additional premium due to the increased risk while vacant.
What is a “ By-law” endorsement? What are 2 considerations for this endorsement?
an insurer usually doesn’t pay increased costs due to by-laws. This endorsement addresses that limitation.
1) Indemnity must be triggered by an insured peril
2) Endorsement does not increase the limits of the policy, and it covers only those costs actually incurred by the policy holder to comply with the minimum code of requirements.
What does section 1 of the By-Law endorsement cover?
Section 1 will pay the cost of demolition and removal of undamaged areas of the building and detached structures. It will also pay the increased costs of repairs to comply with the minimum code requirements as of the date of loss.
