Study 8 Flashcards
How long does the insurer have to pay the claim once the proof of loss is submitted?
60 days
After 60 days the insured has the right to sue the insurer for payment.
Name 2 actions may the insurance company take after a claim is paid?
subrogation against a third party who is liable for damages; or
salvaged property may have to be sold.
What does a proof of loss include?
all the information required to establish the claim, including the actual amount of the loss.
Define deponent
A witness making sworn or affirmed testimony out of court as part of the discovery process
Who is a commissioner of oaths and what role do they play?
A commissioner of oaths is a provincially or territorially appointed official, often a notary public or government employee
Their role is
- to witness and attests to the deponent ’s oath and signature,
- to ensure the affidavit is properly completed and that the deponent is mentally capable of signing,
- They do not verify the truth of the facts stated in the document.
It is very common for property policies, especially in personal lines, to include a replacement
cost clause. What is a replacement cost clause?
A provision, generally in property insurance coverage, to provide a substitute of the damaged or lost property with something similar, including having the same use but not necessarily identical to the property being replaced, without extra cost to the insured.
What does the functional replacement endorsement in commercial policies entail?
It links the settlement to the building’s functional use at the time of loss, rather than its original style of construction.
It allows for more economical modern construction materials and methods to be used, as long as the replacement serves the same function, ignoring the older, more expensive construction style.
Which type of property do not qualify for replacement cost coverage
Antiques, fine arts, paintings, and statuary, by their inherent nature
Memorabilia, souvenirs, and collectors’ items
How does ACV vs replacement cost differ in Quebec?
2490, 2491 & 2493
Insurer pays ACV unless specifically stated otherwise in the policy
Name the three types of deductible in most personal lines polices
1) a straight deductible applies to each loss.
2) deductibles on certain policies to disappear on losses that exceed a certain threshold.
3) a separate deductible applies to each section of coverage. (therefore, Policy contract wording must be verified when several coverage sections are in play)
Define aggregate deductible
A deductible applied as a whole to all the claims that occur during the policy year.
Once this aggregate deductible is met, the balance of insured claims are paid without a deductible.
Common in larger commercial risks
Exceptions : In some cases, the balance of insured claims may be subject to the deductibles outlined in individual policies.
Define franchise deductible
the insured pays all claims up to the amount set in the franchise.
If any loss exceeds that amount, the insurance company assumes full responsibility for the full amount of the loss, including the franchise amount.
Less common
When a limitation on specified property applies, the limitation is applied to the part of the loss
before or after the deductible is applied?
Before.
Apply deductible first, then up to Limit
What is Valued Policies
It defines how much an insurer will pay upon the total loss of the insured property.
No further proof of value is needed when a loss occurs; the insured collects the total amount of insurance.
What happened in Lieber v. Canadian Group?
Insured admitted claim was inflated and the entire claim was denied
What should an adjuster consider when a contractor / auto body shop submitted additional costs?
1) Did the contractor underprice the job at the estimate stage, perhaps in order to secure the job?
2) Was there a change in the scope of damage? Was there hidden damage? Should hidden damages have been anticipated?
3) Did some items not respond to repairs or cleaning, with the result that replacements were required?
Define IBC’s Agreement of Guiding Principles Rule 1
Rule 1 states that insurance on specifically described property or individually itemized articles is primary.
When do IBC’s Agreement of Guiding Principles Rule 2 apply?
Rule 2 applies where two or more policies insure specifically described property or individually itemized articles, whether or not for a specified amount.
How does the limit of liability rule determine contribution?
Limits are determined as though no other insurance existed and applies what is the least of:
1) amount of insurance
2) amount of loss
3) amount payable after applying any policy limitation
What is the purpose of a mortgage clause or endorsement in an insurance policy?
Protects the mortgagee when the insured breaches a policy condition.
(When the insured has breached a policy condition, the insurer is entitled to subrogate against the insured for any sums paid to the mortgagee)
What is the duty of the mortgagee under mortgage clause
The mortgagee also has a duty to advise the insurer within a specific period of any change in risk that comes to light, including change in ownership or occupancy.
What can the adjuster do when the party who is liable is willing to pay the subrogated demand but has no insurance?
1) Negotiate a repayment plan to enable the person to discharge the debt.
2) Ask the party to sign a promissory note.
3) Refer the file to a collection agency if the party later defaults on payments.
In Ontario, how many days notice do municipalities receive for non-repair?
10d
What is Salvage?
refers to the portion of goods or property that has been saved or remains after a loss such as a fire or water damage loss.
Who pay for the reasonable and proper expenses in connection with protecting and moving salvage?
Common law statutory conditions - insurer contributes proportionately ;
general conditions of a Quebec property policy - insurer
When explaining why a claim is not covered, what must a loss adjuster do or not do?
1) must use specific and clear language to explain why a claim is not covered.
2) Insurance jargon should not be used unless absolutely necessary, and then only when an adequate explanation of the terminology has been provided.
3) Policy entitlements must be stated as clearly and simply as possible.
Define release
An oral or written discharge from an obligation, duty, or demand. To let go of, or give up a legal claim or right to one against whom it could be enforced.
Define Limitation Periods
The time prescribed by law within which a party has the opportunity to bring a legal action.
Created by statute, regulation, and contract.
Define discoverability rule
A rule in tort law stated in provincial legislation that specifies that a limitation period begins when the material facts upon which an action is based had been, or ought to have been, discovered by the plaintiff through due diligence.
How long does an insured have to bring action against the insurer?
Policy wordings generally require 1 yr, some jurisdictions are up to 3 from date of loss
Quebec is 3 and is from 60 days after proof of loss received
Once limitation period is waived, it cannot be invoked again. How to resolve this issue?
keep the options open is to extend the limitation period for a specific length of time.
Define litigants
The parties involved in the dispute
Define pleadings and its purpose?
The formal written allegations or denials by parties in a lawsuit to a tribunal and the remedies or dispositions the parties seek.
To inform both parties to the action about the fact situation and set the boundaries for the litigation.
Define statement of claim
A written statement by a plaintiff detailing the facts that support the claim against the defendant and the relief sought.
Define notice of action
A summons or notice to a party that informs the party of its involvement in a lawsuit; filed at the court and served to the party before the formal statement of claim is issued.
What is the possible reason for people to serve NOC in NB & ON?
if the limitation period is nearly over and there is not enough time to prepare the SOC.
The plaintiff must still file a SOC within a set number of days.
In provinces and territories other than NB & ON, what document is similar to a notice of action.
a writ of summons
Define an affidavit of service
Document issued by the plaintiff to confirm service of the statement of claim to the defendant.
Define Statement of defence
It responds with admissions or denials to the allegations and sets out additional facts, perhaps even including a counterclaim.
the defendant admits or denies the allegations in the statement of claim using factual and legal arguments that will be relied upon in the defence.
In a high court action, a plea in reply to a statement of claim.
Demand of Notice
In some provinces, a demand of notice is filed as an alternative when defendants do not anticipate defending against the action but still want the plaintiffs to present the facts of the case.
What is Counter Claim
a defendant counters by filing a claim against the plaintiff
Cross claim
A demand made against another party on the same side of the lawsuit. The plaintiff may file a claim against another plaintiff, or a defendant may file a claim against another defendant.
Where may plaintiff file notice of action first if the limitation period is nearly over?
NB and Ontario
Define A notice of intent
to defend grants an extension to the deadline for filing a statement of defence
Where may defendant file notice of intent?
NB, Ontario, and PEI
What will a Plaintiff ask for when a claim is not contested,
default judgment
What is a default judgment, and when is it rendered in favor of the plaintiff?
A default judgment is rendered in favor of the plaintiff for the amount of damages stated in the original complaint when the defendant has not responded to a summons or failed to appear before a court of law.
What is “The right of discovery”
The right of discovery is the right by which a party to a civil court proceeding is enabled before the determination of any matter of consequence in those proceedings:
What is “Depositions”
is testimony given under oath and recorded for use in court at a later date.
What is include in a judgement?
1) decisions concerning liability and damage issues raised during the trial.
When may a party appeal a court decision?
if the lawyer shows an error in law or an error in a combination of law and fact.
Where are the jurisdictions of the provincial, territorial, and federal governments set out?
The Federal Constitution Act
What are the two court systems?
the provincial and territorial court system and
the federal court system.
What most provincial and territorial systems are structured into
2 types of trial court (one of which has jurisdiction over small claims) and
an appellate court (also known as appeal court).
What are the main court levels from lowest to highest in ON?
The Ontario Court of Justice;
the Superior Court of Justice (which includes a small-claims court); and
the Court of Appeal. The Divisional Court of the Superior Court of Justice also hears some appeals
What is the statutory requirement when submitting a claim against the Crown?
notice of the claim be made to the right parties within a set number of days.
e.g ON - 10days
What action can a loss adjuster take when they become aware or suspect that a statement of claim has been issued?
a court action search can be initiated to obtain copies of the documentation and confirm that pending litigation exists.
Where an action can be filed?
1) where the defendant lives or where the loss occurred.
2) under certain circumstances, the case can be filed where the plaintiff lives
What is a solicitor–client costs and what do it comprise of?
Costs charged by a lawyer to a client.
Comprise of lawyer’s fees and disbursements
What are party-and-party costs, and how are they assessed by the court?
Party-and-party costs are awarded by the court to a party based on a regulated tariff or schedule of costs.
The costs are further assessed by the court, and the successful party prepares a bill of costs that is subject to review by a court assessment officer or a taxing master.
