Study 10

Question 1

Residential Policy Framework

Answer 1

Homeowners policy: Coverages A, B, C, and D
Tenants policy: C and D
Condominium unit owners policy: C and D

Question 2

The building coverage in a basic homeowners policy includes

Answer 2

the house and
any attached structures,
permanently installed outdoor equipment on the premises, and
outdoor swimming pools and any attached equipment.
(In Quebec, outdoor swimming pools are covered by endorsement.)

Question 3

What constitutes personal property?

Answer 3

Everything the insured has in the house that is usual property to the ownership of a home qualifies as personal property or contents

Question 4

What are the coverage for tenants package policy

Answer 4

personal property,
additional living expenses,
some tenant policy wordings cover dwelling improvements and betterments made at the insured’s expense.

Question 5

What are the coverage for condominium unit owners policy

Answer 5

similar to a tenants package, but modifies coverage, include 3 extensions of coverage
(1) unit improvements and betterments,
(2) loss assessment, and
(3) unit additional protection.

Question 6

condominium corporation is responsible for insurance coverage on which two areas?

Answer 6

the common elements and the standard units

Question 7

What are the other names of condominium corporation in Quebec and BC?

Answer 7

“syndicate” in Quebec ; “strata corporation” in BC

Question 8

Does the condominium unit owners form cover the unit improvements and betterments?

Answer 8

Yes

Question 9

What is a hostile fire

Answer 9

A fire that occurs in or escapes to a place not anticipated.

Question 10

What is a friendly fire

Answer 10

A fire that has been intentionally ignited and remains controlled and confined to its intended size and space, such as a fire in a fireplace or a furnace flame.

Question 11

What questions should the loss adjuster ask to determine if heat, rather than fire, caused the damage?

Answer 11

Has heat been applied?
What resulting products of fire are evident?

Question 12

What must a loss adjuster act quickly to establish to minimize damage.

Answer 12

There may be some urgency to board up exposed areas.

There may be a need to air and deodorize the premises.

Washing walls should be attempted ASAP to determine what painting would be required.

Protective barriers or fencing may be required to limit any trespassing or further damage.

In the case of complex or large losses still under investigation, the property may require on - site security to protect the area.

Question 13

What are the four items that repair activities are categorized in?

Answer 13

Function
Unit amount (area, volume, length)
Cost per unit
Total cost

Question 14

What are the two most common roofs?

Answer 14

Gable roof, Hip roof

Question 15

What are some common examples of falling objects that may cause damage?

Answer 15

falling trees, meteorites, aircraft parts, and debris from blasting operations.

Question 16

What must an insured do to obtain coverage for frozen pipes rupturing if they are away for more than four consecutive days?

Answer 16

The insured arranged for someone to enter the house each day to ensure that heating was being maintained.
Or
The insured shut off the water supply and drained all the pipes and domestic water containers.

Question 17

What are the damages caused by Hail?

Answer 17

roof shingles to split,
will usually be detectable shortly after the storm or once the roof is dry.
Dents may appear in the shingles, but these usually will not split.

Question 18

What are the common roofing problems have nothing to do with hail damage

Answer 18

1) Moisture trapped in the roofing material may cause bubbling.
2) Sheathing that expands and contracts may cause wrinkling.
3) Oils evaporating from the roofing materials may cause an alligator-type pattern on the roofing surface.

Question 19

What are the 6 perils within transportation?

Answer 19

Collision
Derailment
Upset
Stranding
Overturn
Sinking

Question 20

What does “fire” mean in the context of an insurance policy?

Answer 20

rapid type of combustion giving off light, heat, and flame

Question 21

Under the riot peril, when could property damage qualify as a riot?

Answer 21

When at least 3 or more people are involved in damaging property.

Question 22

Define Vandalism

Answer 22

intentional defacement of property

Question 23

Define Malicious mischief

Answer 23

the willful destruction of another’s property

Question 24

What evidence typically suggest the shingles have weathered over time.

Answer 24

splitting and widening

Question 25

What precedent was set in Easton v. Lanark Mutual Co?

Answer 25

policyholder was not required to accept a method of payment that would result in diminishing the value of his home and property.

Question 26

What damages can caused by Hail

Answer 26

Roof shingles to split,
usually be detectable shortly after the storm or once the roof is dry.
Dents may appear in the shingles, but these usually will not split.
If a large percentage of the roof shingle tabs have been broken, it may be necessary to replace the roof covering entirely.

Question 27

What are the restrictions of the theft peril?

Answer 27

Theft from a dwelling under construction
Theft of animals, birds, or fish
When, by fraud or trickery, a change of ownership in property takes place with the insured’s agreement

Question 28

What are the typical extensions of property?

Answer 28

Debris removal of insured property from the premises as a result of an insured loss.

Cost of removing insured property from the premises to protect it from loss for up to 30 days or until the policy term ends, whichever comes first.

Property removed from the insured’s property to protect it from loss or damage is insured by this extension for a specified number of days or until the policy term ends (whichever comes first).

Personal property in transit to another home to be occupied as the insured’s principal residence up to a specified number of days, unless the policy expires sooner.

Assessments levied against the property owner for the services of a fire department

When physical damage to a building caused by an insured peril in turn causes a change in temperature, personal property damaged by the change in temperature

Loss of food in a freezer caused by an interruption of electrical power or mechanical breakdown

Replacement or re-keying of locks if keys are stolen.

Tearing out of walls, ceilings, or other parts of the insured building not otherwise damaged by the water peril but damaged in the course of needed repairs.

Arson conviction rewards in connection with a fire loss on the premises.

Coverage for credit card, debit card, forgery, and counterfeit money

Question 29

What is the difference between vacant and unoccupied?

Answer 29

Vacant = there are no contents and no occupants living in the building.
Unoccupied = there may be contents but no people in the building.

Question 30

What are the coverage provided under ALE

Answer 30

due to an insured loss - live somewhere else while repairs are under way / losing rental income ;
civil authority prohibits access as a direct result of damage to neighboring premises by an insured peril,
, civil order for mass evacuation - increases in living expense

Question 31

What are the additional requirements of theft and burglary claims?

Answer 31

How entry was gained to the premises
Whether visible signs of the entry exist
Confirmation whether doors and windows are kept locked
Whether an alarm system is in place
Whether an alarm system is kept activated

Question 32

What background info can be confirmed from the application?

Answer 32

Name of prior carrier and policy number
Whether the insured had any prior losses
Details of any prior claims
Whether the insured ever had insurance cancelled by insurance company
Details related to why a policy cancellation occurred

Question 33

What are the four items that repair activities are categorized in?

Answer 33

Function
Unit amount (area, volume, length)
Cost per unit
Total cost

Question 34

What are the two ways to calculate P&O?

Answer 34

Straight profit and overhead - multiplying the total by an agreed percentage.
Cumulative profit and overhead - multiplying the total by the agreed overhead percentage and then multiplying that total by another percentage representing the profit allocation.

Question 35

What is the most commonly used roofing material for residential roofs.

Answer 35

Asphalt shingles

Question 36

What is the line at the top of the roof called?

Answer 36

ridge

Question 37

What are the lower edges of a roof called?

Answer 37

eaves

Question 38

What are the conditions of replacement of a home at replacement cost?

Answer 38

Repairs or replacement must take place at the same location.
The same occupancy must be maintained.
Materials of the same quality must be used.
Repairs or replacement must take place within a reasonable time after the loss.

Question 39

What is guaranteed replacement cost called in Quebec?

Answer 39

enhanced replacement cost

Question 40

Why Inflation protection is included under the Basis of Claim Payment section

Answer 40

To ensure that the amount of insurance remains relevant to market conditions,
provides an automatic increase in the amount of insurance from the last renewal date

Question 41

How can the loss adjuster determine if the damage was caused by lightning and not an electrical failure?

Answer 41

Material vaporized: A direct strike can cause physical damage to property by vaporizing material.
Presence of a hole: Lightning damage is sometimes evidenced by a hole in the roof or wall.
Can be tracked: Lightning damage can be tracked through the property.
Defined path: Lightning generally follows a defined path through electrical equipment.
Qualified expert: A loss adjuster may appoint a qualified expert to differentiate between lightning damage and other causes of electrical failure in appliances.