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RIBO > Day 8 Midterm > Flashcards

Day 8 Midterm Flashcards

1
Q

Sharing the losses of a few people amongst the many

A

Insurance

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2
Q

What are the objectives of the IBC (Insurance Bureau of Canada)?

(key: activities, forum, legislation)

A
  1. Engaging in activities to promote a better understanding of the insurance business
  2. Provides a forum for the discussion of general insurance
  3. Studies legislation and legislative proposals that affect insurance companies
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3
Q

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.

A

Indemnity

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4
Q

to compensate a loss, to pay out, to return to a pre-loss value

A

Indemnity

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5
Q

The price of a unit for insurance for a period of one year

A

Rate

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6
Q

failure to use the degree of care expected from a reasonable and prudent person

A

Negligence

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7
Q

What are the responsibilities of brokers (intermediary)?

A

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

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8
Q

When someone is interested in buying insurance what needs to be completed to determine pricing options?

A

Application?

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9
Q

states that the client is responsible for paying the deductible, whether or not they are at fault.

A

Deductible Clause

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10
Q

What clause would affect the amount of settlement an insured would receive following an insured loss

A

Coinsurance clause

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11
Q

the slip is temporary, pending the issuance of a formal policy, not the insurance

A

Temporary insurance

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12
Q

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

A

Contract of Compensation

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13
Q

Co-insurance calculations

A

Review your formula

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14
Q

It would affect a contract of insurance enough to influence an insurer’s decision on whether to accept the risk.

A

Material Fact

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15
Q

A material fact can change one of 3 things:

(APC)

A

The acceptability of risk

The amount of premium to be charged

The conditions applicable to accepting risk (that is, the type of coverage offered)

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16
Q

What is covered under a basic fire policy (FLE)

A

Fire
Lightning
Explosion (limited – only coal, natural gas, and manufactured gas)

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17
Q

Fire policy will pay the least of three amounts - what are those

A

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

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18
Q

What can endorsements do?

(MART)

A

Modify
Add
Reduce
Take away

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19
Q

It changes the coverage; it amends the terms of the policy.

A

Endorsement

20
Q

the reserve which earned and unearned premium is kept in until the policy expires. This is kept to pay claims

A

Unearned Premium Reserve

21
Q

Types of Insurance Providers

A
  1. Stock Companies
  2. Mutuals
  3. Crown corporations
  4. Captive Insurers
22
Q

Organizations operating for the profit of their owners

A

Stock Companies

23
Q

Co-operative organizations operating for the benefit of their members only

A

mutuals

24
Q

Government insurance organizations

A

Crown corporations

25
Q

the policy holders of the captive are usually limited to the parent company and its subsidiaries

A

Captive insurers

26
Q

A legal wrong is also known as ______

A

tort

27
Q
A

Precedent

28
Q

What elements determine enforce-ability of a legally binding contract

LCC

A

Legality of Purpose

Capacity to Contract

Consideration

29
Q

Functions of Insurance

(SALSAS)

A

Spread of risk
Aid to security
Loss prevention activities
Source of Capital
Aid to credit
Source of employment

30
Q

What is the contract under the civil code of Quebec called?

A

Mandate

31
Q

This clause states the insured must take all reasonable steps in and about the recovery of lost insured property

A

Sue and Labour Clause

32
Q

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.

A

Mortgage clause

33
Q

What do the Extended Coverage perils cover?

(LIVERSWWF)

A

Fire
Windstorm and hail
Water escape/rupture/freezing
Falling object
Lightning
Impact by aircraft or land vehicle
Vandalism and malicious acts
Explosion
Riot
Smoke

34
Q

The coverages for a homeowner policy are:

A

A – Dwelling

B – Detached Private Structures

C – Personal Property

D – Additional Living Expenses

35
Q

The coverages of a Condo policy are

A

A1 – Condo Unit

A2 – Loss Assessment

A3 – Improvements and Betterments (that you make to your own unit)

C – Personal Property

D – Additional Living Expenses

36
Q

The coverages of a tenant policy are:

A

C – Personal Property

D – Additional Living Expenses

37
Q

The maximum amount of coverage an insurer has for the insured

A

Limit of Liability

38
Q

Know where to find definitions under certain sections of the Homeowners policy

A

-Review homeowners manual-

39
Q

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

A

Statutory Conditions

40
Q

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

A

Comprehensive/Specified perils?

Based on mock test question, liability, comp and 44 are present and there is coverage minus the deductible

41
Q

What is Section 5 of the OAP for?

A

Section 5 deals with identified automobiles

uninsured motorist

42
Q

What are the requirements to claim under Section 6 of the OAP1?

A

The three qualifications for claiming DCPD (Section 6)
Section 6 only applies to

  1. Accidents that happen in Ontario
  2. Also, another vehicle must be involved in the accident
  3. Also, at least one other vehicle in the accident must have insurance coverage in Ontario
43
Q

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

A

Send an invoice so an endorsement could be added to cover its full value

43
Q

What coverage is provided for transportation replacement following an auto theft and what are the terms for claiming

A

-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

44
Q

Property Damage under Section 3 is used to cover what

A

Damage to property of third party

45
Q

How do you insure a snowmobile?

A

OAP 1 with snowmobile endorsement

46
Q

If a car was vandalized a couple of days ago, how much time does the insurance company has to pay this loss?

A

Up to 60 days after receivin g proof of loss

Up to 15 days with an appraisal

RIBO (6 decks)

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