Day 8 Midterm Flashcards
Sharing the losses of a few people amongst the many
Insurance
What are the objectives of the IBC (Insurance Bureau of Canada)?
(key: activities, forum, legislation)
- Engaging in activities to promote a better understanding of the insurance business
- Provides a forum for the discussion of general insurance
- Studies legislation and legislative proposals that affect insurance companies
A contract, expressed or implied, to repay in the event of a loss.
The insured must neither gain nor lose; they are put back into the same financial position they were in immediately before the loss.
Indemnity
to compensate a loss, to pay out, to return to a pre-loss value
Indemnity
The price of a unit for insurance for a period of one year
Rate
failure to use the degree of care expected from a reasonable and prudent person
Negligence
What are the responsibilities of brokers (intermediary)?
Act within the terms of their contract
Follow instructions as to types of businesses that may be written
Collect premiums and hold them in trust
Remit premiums
Advise the insurer of business written promptly
Advise the insurer promptly of all claims notified
When someone is interested in buying insurance what needs to be completed to determine pricing options?
Application?
states that the client is responsible for paying the deductible, whether or not they are at fault.
Deductible Clause
What clause would affect the amount of settlement an insured would receive following an insured loss
Coinsurance clause
the slip is temporary, pending the issuance of a formal policy, not the insurance
Temporary insurance
specifies that a stated amount is payable on occurrence of the event insured against. (e.g., life insurance, accident and sickness)
Not subject to salvage, subrogation, and contribution
Contract of Compensation
Co-insurance calculations
Review your formula
It would affect a contract of insurance enough to influence an insurer’s decision on whether to accept the risk.
Material Fact
A material fact can change one of 3 things:
(APC)
The acceptability of risk
The amount of premium to be charged
The conditions applicable to accepting risk (that is, the type of coverage offered)
What is covered under a basic fire policy (FLE)
Fire
Lightning
Explosion (limited – only coal, natural gas, and manufactured gas)
Fire policy will pay the least of three amounts - what are those
The ACV of the property at the time of destruction or damage
The interest of the insured in the property (that is, the building value)
The amount of insurance applicable to the item
What can endorsements do?
(MART)
Modify
Add
Reduce
Take away
It changes the coverage; it amends the terms of the policy.
Endorsement
the reserve which earned and unearned premium is kept in until the policy expires. This is kept to pay claims
Unearned Premium Reserve
Types of Insurance Providers
- Stock Companies
- Mutuals
- Crown corporations
- Captive Insurers
Organizations operating for the profit of their owners
Stock Companies
Co-operative organizations operating for the benefit of their members only
mutuals
Government insurance organizations
Crown corporations
the policy holders of the captive are usually limited to the parent company and its subsidiaries
Captive insurers
A legal wrong is also known as ______
tort
Precedent
What elements determine enforce-ability of a legally binding contract
LCC
Legality of Purpose
Capacity to Contract
Consideration
Functions of Insurance
(SALSAS)
Spread of risk
Aid to security
Loss prevention activities
Source of Capital
Aid to credit
Source of employment
What is the contract under the civil code of Quebec called?
Mandate
This clause states the insured must take all reasonable steps in and about the recovery of lost insured property
Sue and Labour Clause
creates a separate agreement between the bank and insurance company. The bank will get their money even if the insured has done something that breached a Statutory Condition and is not getting indemnified.
Mortgage clause
What do the Extended Coverage perils cover?
(LIVERSWWF)
Fire
Windstorm and hail
Water escape/rupture/freezing
Falling object
Lightning
Impact by aircraft or land vehicle
Vandalism and malicious acts
Explosion
Riot
Smoke
The coverages for a homeowner policy are:
A – Dwelling
B – Detached Private Structures
C – Personal Property
D – Additional Living Expenses
The coverages of a Condo policy are
A1 – Condo Unit
A2 – Loss Assessment
A3 – Improvements and Betterments (that you make to your own unit)
C – Personal Property
D – Additional Living Expenses
The coverages of a tenant policy are:
C – Personal Property
D – Additional Living Expenses
The maximum amount of coverage an insurer has for the insured
Limit of Liability
Know where to find definitions under certain sections of the Homeowners policy
-Review homeowners manual-
Special prescribed and standardized conditions that the provincial / territorial insurance acts require to be included in fire, automobile and accident and sickness policies
these are laws and regulations the insured and the insurer have to abide by
Statutory Conditions
A car parked on Lake Simcoe that sinks, what coverage would need to be purchased to be covered for this type of loss under Section 7
Comprehensive/Specified perils?
Based on mock test question, liability, comp and 44 are present and there is coverage minus the deductible
What is Section 5 of the OAP for?
Section 5 deals with identified automobiles
uninsured motorist
What are the requirements to claim under Section 6 of the OAP1?
The three qualifications for claiming DCPD (Section 6)
Section 6 only applies to
- Accidents that happen in Ontario
- Also, another vehicle must be involved in the accident
- Also, at least one other vehicle in the accident must have insurance coverage in Ontario
If someone asked if their new stereo system, they just installed in their auto would be covered for theft under the OAP1, what would you advise
Send an invoice so an endorsement could be added to cover its full value
What coverage is provided for transportation replacement following an auto theft and what are the terms for claiming
-any reasonable expense for a similar substitute automobile will be paid
-must have all perils, comprehensive, or specified perils
-if you choose not to rent a car, reasonable expenses for taxis or public transport will be paid
-coverage will start 72 hours after the theft has been reported to insurer or the police
-coverage will continue until vehicle is repaired or replaced or paid for with settlement amount
$900 maximum limit
Property Damage under Section 3 is used to cover what
Damage to property of third party
How do you insure a snowmobile?
OAP 1 with snowmobile endorsement
If a car was vandalized a couple of days ago, how much time does the insurance company has to pay this loss?
Up to 60 days after receivin g proof of loss
Up to 15 days with an appraisal
