Study 3 Flashcards
risk
The chance of loss. Specifically, the possible loss or destruction of property or the possible incurring of a liability. Sometimes referred to as the subject of an insurance contract.
named-perils policy
named-perils policy
A policy in which the perils insured against are listed, as opposed to one that insures against “all risks.”
specified perils
Perils insured against that are specifically named in a policy; losses resulting from the perils listed are covered under the policy. This is the flip side of all-risks coverage, where losses resulting from the perils listed are excluded.
fire
Combustion manifested in light, flame, and heat for useful purposes (friendly fire) or destructive purposes (hostile fire).
personal property
Legally, any property of an insured other than real property. More often used to refer to the personal property of family members insured under a homeowners policy.
real property
Land and any property that is tangible and usually fixed or attached to the land.
theft
The wrongful taking of the property of another. It is a broad term and includes larceny, pilfering, holdup, robbery, and pickpocketing.
earth movement
A general term that includes earthquake, landslide, snowslide, and volcanic eruption, among other phenomena.
fluvial flooding
The overflow of a river.
pluvial flooding
Flooding caused by rain.
Hazard
(1) A risk or probability that the event insured against might occur. (2) A condition that engenders or increases the chances of a loss
Moral Hazard
A hazard arising from the character, interest, habits, and lack of integrity of the insured or person concerned.
Physical Hazard
A hazard arising from the physical condition or characteristics of the object that is insured.
Morale Hazard
A hazard that is based on the insured’s attitude toward the insured belongings. This hazard exists when the insured no longer cares about the possessions because they are insured.
Conflagration
(1) A fire involving two or more risks or extending over a wide area. (2) Any unusually large fire.
Sublimit
A limitation in an insurance policy on the amount of coverage available to cover a specific type of loss.
all-risks policy
A name given to an insurance policy that covers each and every loss except for those that are specifically excluded. If the insurer does not exclude it, then it is automatically covered. This is the broadest type of policy that can be purchased.
Who is Onus on in Named Perils?
The INSURED - prove it was caused by an insured peril and no exclusion applies
What is the Onus in All Perils?
On the insured to prove the loss occurred during the POLCIY TERM and the loss was FORTUITOUS
The Onus is then on the INSURER to prove an exclusion applies
Insurers in Canada are free to define their own ____ and ____
Perils and Exclusions (all risk form)
The two ways EXCLUSIONS usually apply to losses
- They list property that is not insured
- they list PERILS that are not insured
What do Fine Arts Endorsement, Personal Articles Endorsement, Scheduled Property Endorsement and COMP policies have in common?
ALL RISK applies
Whats up with Specified Perils in All Risk Policies?
Some of the exclusions that limit coverage are qualified by EXCEPTIONS to those exclusions in the form of SPECIFIED PERILS
Thus, the exclusion applies to all losses EXCEPT a loss that is caused by one of the specified perils
3 examples when FIRE is allowed to be EXCLUDED
- Property undergoing a heat process (resulting dmg covered tho)
- Riot, war, etc aka WAR RISKS
- Radioactive contamination
Other times, NUCLEAR.
Fire following EQ is
COVERED
Fire deliberately set is
Not COVERED
What is innocent co-insureds in context of FIRE
Ex: spouse of the arsonist was not involved in the act they would still be covered for their share of the property dmg.
Does the IBC definition of LIGHTING include SOLAR STORMS?
NO - not covered on named perils form
Explosion in the base IBC Form means–
Explosion of natural, coal, or manufactured gas in a building not forming part of a gas works
What if the explosion is result of riot etc?
Not covered
Is EXPLOSION from WATER HAMMER covered? IBC FORM
NO
What is WATER HAMMER
The shock wave created by closing a faucet or tap
In regards to EXPLOSION, difference with Personal and Commercial Policies
Excluded on commercial for explosion, rupture, or bursting of most boilers and pressure vessels
Smoke definition (named perils)
Smoke due to a sudden unusual and faulty operation of any heating or cooking unit in or on the premises, but NOT SMOKE FROM FIREPLACES
Smoke definition change in All RISKS form
Smoke from agricultural smudging and industrial operations iS NOT COVERED. Why you ask? Because it comes from a FRIENDLY FIRE
Falling Object definition
Any falling object that strikes the exterior of the building. METEORITE YES, object from Aircraft or satellite, YES
Impact by Aircraft or Land Vehicle - are animals covered in Named Perils?
NO
Impact by Aircraft or Land Vehicle - Named Perils - loss caused by any vehicle owned or operated by the insured or any of the insureds employees?
NOT COVERED
RIOT Peril characteristics
- Act or threat of violence by one or more persons who are part of an assembly of THREE OR MORE PERSONS
- That might give rise to damage to property or injury to persons
RIOT PERIL - extend the meaning to include in COMMERCIAL FORMS
- Strikers inside or outside the premises who have quitted work and
- Locked out Employees
In Named Peril form, Vandalism or Malicious Acts 4 exclusions
- while building is UNDER CONSTRUCTION, even if there is a Builders Risk form.
- While building is vacant, even if there is a vacancy permit
- Perpetrated by any insured
- Caused by theft or attempted theft
is WATER DAMAGE an IBC Named Peril?
YES #9
How Many Water damage scenarios are covered?
4
Water Dmg Scenario 1
Water Main - sudden and accidental
Water Dmg Scenario 2
Escape of water or steam from within a plumbing heating sprinkler or air con system or domestic water container in the dwelling
Water Dmg Scenario 3
escape from domestic water container located OUTSIDE the Dwelling (NOT FREEZING)
Water dmg Scenario 4
Entrance of water through an APERTURE created concurrently with ANOTHER INSURED PERIL
What about you leave window open and rainwater comes in?
Not covered!
What about damage to the actual system or domestic water container?
Not covered!
Water Damage Peril exclusions
Continuous Seepage or leakage, Sewer Backup, flood, and hydrostatic pressure
Are outdoor antennae and satellite receivers insured property with respect to WINDSTORM or HAIL PERIL?
NO
is PERSONAL PROPERTY covered by windstorm or hail?
NO - unless it’s after the opening is done and then dmged
Glass Breakage is the 11th IBC Named Peril - which Named Peril forms is it NOT INCLUDED (4 of them)
- Tenants BASIC
- Condo BASIC
- Residential BASIC
- Seasonal Residence
Glass Breakage means ….
accidental breakage of the building glass or doors howsoever caused, unless by an excluded peril
IN IBC NAMED PERILS, Glass Breakage is excluded in these 2 times
- Under construction
- Vacant
Builders risk and vacancy permit dont matta!
TRANSPORTATION PERIL #12 of the IBC Named Perils.
What does it encompass?
Loss or damage to insured PERSONAL PROPERTY caused during the transport of the property by COLLISION of the auto transporting it
TRANSPORTATION PERIL #12 - does it extend to personal property that is temporarily REMOVED from the premises, as well as buildings fixtures and fittings that are temporality REMOVED from the premises for SEASONAL STORAGE?
YES
Q: What NUMBER peril is THEFT, including damage caused by attempted THEFT, in IBC’s named perils?
A: THIRTEENTH.
Which IBC forms do not include THEFT coverage?
A: IBC 1171 RESIDENTIAL BASIC FORM and IBC 1173 SEASONAL RESIDENCE FORM
Q: Does the SEASONAL RESIDENCE FORM have any optional coverage for THEFT?
Yes, it has OPTIONAL COVERAGE for BURGLARY and ROBBERY.
How is the scope of THEFT determined in IBC named-perils forms?
By EXCLUSIONS (since THEFT isn’t defined directly).
Name an exclusion to THEFT coverage for other dwellings.
THEFT isn’t covered if it occurs in another dwelling the insured owns, rents, or occupies (unless they’re TEMPORARILY living there).
Is THEFT by a TENANT or their household covered?
NO, it’s EXCLUDED from coverage.
Are building materials in a dwelling under CONSTRUCTION covered under THEFT?
NO, THEFT coverage doesn’t apply until the dwelling is COMPLETED and READY for occupancy.
Are animals, birds, or fish (e.g., pets) covered under THEFT?
NO, they are specifically EXCLUDED.
Is THEFT by false pretense (i.e., willingly giving property) covered?
NO, it’s EXCLUDED under voluntary parting of property.
Does THEFT coverage extend to damage during an actual or attempted THEFT?
YES, it covers DAMAGE to real and personal property from actual or attempted THEFT (e.g., a broken door or smashed cabinet).
What NUMBER peril is ELECTRICITY in IBC’s named perils?
FOURTEENTH.
Is ELECTRICITY included in ALL IBC named-perils forms?
YES, it’s included in all forms.
What does the ELECTRICITY peril cover?
SUDDEN and ACCIDENTAL damage from ARTIFICIALLY GENERATED electrical current (e.g., power surge).
Is a LIGHTNING strike considered part of the ELECTRICITY peril?
NO, only ARTIFICIALLY GENERATED currents like a power surge (not natural events like lightning).
Does the ELECTRICITY peril cover wear and tear on appliances?
NO, damage must be SUDDEN and ACCIDENTAL (not from normal use or wear and tear).
How does the ELECTRICITY peril differ for COMMERCIAL property forms?
Commercial forms EXCLUDE electrical breakdown, artificially generated current, and arcing (unless FIRE results).
What policy covers EXPLOSION and ELECTRICAL BREAKDOWN for commercial properties?
A specific EQUIPMENT BREAKDOWN policy (separate from IBC’s scope).
