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.
