Personal Property Flashcards
Define Subrogation
Assume another legal rights and duties.
Places insurer in the shoes of the insured
Define Indemnity
Outlines how Insurance are going to be made whole
The basis of claim payment clause states the insurer will pay the lessor of:
- actual cash value
- insurable interest
- limits of insurance
Define replacement cost Option:
Replaces property with brand new item of like-kind quality. No depreciation
Define valued basis
Property is appraised and pays just that. No Depreciation.
Specialty items, Fine Art, jewelry, antiques.
True or False
Insurer will pay out full cost if one shoe is lost.
False.
The undamaged portion still has value and won’t be replaced
What are the three forms of misrepresentation?
IA
- False description of property to the Prejudice of insurer
- Misrepresentation of material fact
- Fraudulent omission of a material fact
Is property of others covered?
IA
No coverage unless they have an insurable interest or included in the policy
True or false
Insurance transfers with the property
IA
False
Insurance doesn’t transfer with the property. Unless it was due to Illegal operation, bankruptcy, succession, death.
True or false
You can start a home based business at anytime and be covered by insurance. IA
False. Change of risk. Must notify insurer of any changes. May affect coverage.
How does an insurer terminate coverage?
IA
5 days noticed if hand-delivered
15 days by registered mail
Send Pro rata refund ASAP
How does an insured cancel coverage?
IA
Can cancel anytime. Give notice to broker to forward to ensure. May have short rate refund
What are the requirements of the Insured after loss?
IA
- Notify Insurance in writing immediately
- deliver proof of loss report
- inventory of undamaged property if required
- books of account, inventory, invoices if required and practical ( business)
What’s the difference between a pro-rated refund and a short rate refund
IA
Prorate. Sent by if insurer cancels
Short rate prorate - admin fees, insured request cancelled
What happens if fraud occurs in the proof of loss?
IA
Claim invalid not covered
Who can give proof or notice of claim?
IA
Agent- someone appointed by the insured
Insurable interest holder- lienholder
If unable to they must be either injured or out of country
True or False
You have a hole in your roof. A rain storm hits, you do nothing because all damage will be covered.
IA
False Insured must take reasonable steps to prevent further loss. Ensure will share cost
True or false
Insurer can enter property after lost to adjust but cannot take control
IA
True
How you do you resolve a disagreement in value?
IA
Both parties pick an adjuster, they debate it. If no decision the two appraisers pick umpire. Majority vote wins. Cost of umpire shared.
When is loss payable?
IA
Within 60 days of receiving proof of loss report. Unless contract says otherwise
What can the insurer choose instead of cash payment?
IA
Repair or replacement. Insurer will notify insured within 30 days of proof of loss. Must start with in 45 days of proof of loss
How is notice sent?
IA
Insurers send notice to the last known address of the insured
Insurance sends to Chief agency to provincial head office
Define innocent party exemption
Innocent party is Exempted from the criminal - intentional acts exclusion
- must prove you were completely innocent
What is covered under Section 1 of a personal property policy?
A- dwelling building
B- detached Private Structure
C- personal property
D- additional living expense
What is covered under Section 2 of a personal property policy?
E- personal liability
F- voluntary medical payments
G- voluntary payment for damaged property
H- voluntary compensation for residents employees
What are the six types of property covered under coverage A- dwelling building?
- Dwelling and attach structures
- Permanently installed Outdoor Equipment
- Outboard Pool and attached equipment
- Nearby material and supplies used for construction and repair example carpet or shingles
- building fixtures - temporarily removed for repair / seasonal storage
- outdoor plants
What is the coverage limit for coverage B- detached private structures?
A percentage of A’s limit- can be increased
Name three expenses covered under coverage D?
Additional Living expenses
- Fair rental value
- Extra expenses to maintain normal standard of living
- Prohibited access
Common extensions of coverage in Section 1
Debris removal, moving, fire department charges, freezer food, lock replacement, Terre Haute, inflation, arson conviction reward
What are the three types of homeowners insurance?
Basic
Broad
Comprehensive
Define basic standard form homeowners insurance. Give some examples of what’s covered.
Covers named perils only listed on the policy.
Fire, lightning, explosions, smoke, falling object, riot, wind - hail
What does the comprehensive form on Homeowners policy provide coverage for?
All risks, anything not excluded is covered
What does tenant insurance cover?
Personal property, tenant improvements, liability
What is the limit of coverage D on tenant insurance?
20% of coverage C
Name some common endorsements for personal property policies
Earthquake, business property, fine art, guaranteed replacement cost, inflation protection, Overland water, personal articles, sewer backup, vandalism, watercraft
What are the three unique coverages for condo insurance
- unit Improvement and betterments
- loss assessment
- unit additional protection
Personal property special limits- all peril
What has a limit of $2,000
Business books and tools on premise
Securities
Personal property special limits- all peril
What has a limit of $2,500
Personal property of students away
Software
Personal property special limits- all peril
What has a limit of $1,000
Spare Auto Parts
Watercraft
Personal property special limits- all peril
What has a limit of $200
Money and bullion
Personal property special limits- theft only
What has a limit of $2,000
Jewelry, watches, furs
Personal property special limits- theft only
What has the limit of $1,000
Manuscripts, stamps
Card collection
Personal property special limits- theft only
what has a the limit of $500
I want to ride my bicycle
Give some examples of a domestic motorized vehicle
Lawn mower, snow blower, wheelchair and equipment
What is covered under broad form for home insurance
Basic coverage for C
Coverage for A B D apprehensive
What is covered under an endorsement for personal property fine art
Smoke damage Earthquake Insider theft including tenant or employee Flood, sewer backup, seepage Scratching, breaking can be added
What is excluded under endorsements for personal property, overland water?
Tides, tsunami, storm surges
No guaranteed replacement cost coverage
There are many extensions of coverage automatically provided for Section 1 coverage under debris removal extension will give you a limit of
5% of the dwelling limit
define Warranty
A promise by the insured that certain facts are true and will remain so
The peril of fire, as defined by the insurance act is to mean:
Fire, whether resulting from explosion of natural, coal or manufactured gas.
True or false
Under a basic form
All explosions are covered including water hammer
False.
Water hammers not covered. All other explosions are covered
under a basic form
What kind of smoke damage is covered?
from sudden, unusual and faulty operation of heating or cooking unit. Fireplace is excluded
Under a basic form
When is vandalism/malicious acts excluded:
When property is vacant or under CoC
If damaged by the insured
attempted theft
Under a basic form
When is damage by windstorm/hail excluded:
If damage is to outdoor antennae
ice/snow melt/weight
waves/flood
