Practice Exam Flashcards
deductible
a deductible represents the amount the insured is required to absorb for each loss for which insurance coverage is provided before receiving any payment from the insurer.
pure risk
pure risk involves the chance of financial loss which does not, at the same time, offer a chance of financial gain
endorsement
an endorsement is an extra sheet(s) or slip(s) of paper attached to the policy indicating in writing that the insurer and the insured have agreed to a change in the terms of the insurance contract
civil law
civil law is that branch of law concerned with settling disputes between individuals or other legal entities in matters no involving a criminal act
unidentified automobile
an unidentified automobile is one which causes bodily injury or death to an insured person arising out of actual contact of that automobile with the automobile in which the insured is an occupant.
the identity of either the owner or the driver of such automobile cannot be ascertained.
your clients suffered a fire loss totaling $87,555. when making the proof of loss, they claimed $1,500 for a stereo unit which they never owned. in the event that the fraud is discovered by the insurer, what portion of the claim, if any, is required to be paid under the policy?
when an insurer is able to prove fraud, they are entitled to deny the entire claim, and not just that part which was fraudulent
the insurer always has the right to decide on how the claim will be settled. it may make payment in the form of cash or rebuild, repair or replace the lost or damaged property. when must the insurer provide the insured with its notice of intention to rebuild, repair or replace?
if the insurer decides to repair, rebuild or replace the lost or damaged property, it must advise the insured in writing within 30 days of the receipt of the proof of loss
your client filed a proof of loss 15 days ago. in this case, how much time does the insurer have remaining before the claim must be paid?
the loss is payable within 60 days after completion of the proof of loss, unless the contract provides for a shorter period. in this case, as the proof of loss was filed 15 days ago, the claim must be paid within the next 45 days.
Your clients home is insured under a homeowner’s comprehensive form. the dwelling is insured on a guaranteed replacement cost basis.
briefly state the guarantee provided by this endorsement
the insurer agrees to pay the full cost or repairs or replacement of the dwelling even if it is more than the amount insurance purchased
Your clients home is insured under a homeowner’s comprehensive form. the dwelling is insured on a guaranteed replacement cost basis.
indicate whether this guarantee of the insurer would extend to include the payment of additional costs to rebuild in compliance with an existing by-law regulating rebuilding after a loss. state yes/no and explain reason
NO - additional costs to comply with building by-law are not insured
Your clients home is insured under a homeowner’s comprehensive form. the dwelling is insured on a guaranteed replacement cost basis.
what obligation does the insured have to the insurer when improvements, extensions or additions have been made to the dwelling building?
when any changes are made to the dwelling building, the insured must notify the insurer within 90 days of the start of work
your client lives in a condominium in a local suburb. indicate whose responsibility it is to insure the following property items:
i) the building
ii) unit improvements and betterments
iii) the common elements
iv) contents contained in each condominium unit
i) the condominium corporation
ii) the unit owner
iii) the condominium corporation
iv) the unit owner
loss assessment coverage is designed to pay for those special assessments against unit owners when coverage provided under the corporation’s policy is inadequate. provide 2 examples of inadequate coverage which might occur under the condominium corporation’s policy
- under insurance
- application of a co-insurance penalty
- cause of the loss is not an insured peril or is specifically excluded
- breach of policy condition
there are three elements required to be present in every tort action, if any one element is lacking, no tort has occurred.
identify the three elements required to be present in every tort action and provide a brief explanation of each
legal duty owed
this element pre-supposes that one party has the right to not be harmed intentionally and the other party has a duty to refrain from causing harm
duty breached
there must be either a violation of the right to be free from harm or a breach of the duty not to harm
the plaintiff suffered damages as a proximate result of the defendant’s negligence
only those damages which arose as a directly out of the insured’s negligent actions will be paid by the policy… i.e. other damages which resulted from other intervening causes are not insured by the policy
as a part of the physical damage coverages provided by the automobile policies, the insurer also agrees to include payment for automobiles not specifically insured by the policy. for example, under the Additional Agreements of Insurer, the insurer agrees to provide payment for physical damage caused to a temporary substitute automobile. when does an automobile belonging to others qualify for coverage under the insured’s policy as a temporary substitute automobile?
an automobile belonging to others qualifies for coverage as a temporary substitute automobile only if the described automobile cannot be used because of its breakdown, repair, servicing, loss, destruction or sale.
