The Business of General Insurance Ch. 5

Question 1

Property and casualty insurance includes insurance products designed to protect policyholders from:(2)

Answer 1

• the loss or damage of property

- legal liability for damages cause to other people or their property.

Question 2

Describe Claim Form- Notice of Loss

Answer 2

Describes how the loss occurred and what property was lost or damaged

Question 3

Describe Claim Form- Proof of Loss

Answer 3

Includes an actual description of the property that was lost or damaged and the amounts being claimed. It is required to be given under statutory declaration, i.e. under oath

Question 4

Define Prescription Period

Answer 4

Insureds do not have the right to make a claim years after there has been a loss. Statutes of Limitations exist in all provinces outlining how long an insured has to make a claim under an insurance policy. This us usually one year from the date of the loss.

Question 5

Define Loss Reserves

Answer 5

Loss reserves: the amount of money the insurance company must set aside to pay all claims

Question 6

Define Unearned Premium Reserves

Answer 6

Consists of the portion of the premium which has not yet been earned on each policy. Funds must be kept available to refund any unearned premium should the policy be cancelled before its term.

Question 7

Describe Subrogation

Answer 7

As a part of the settlement process, the insured agrees in writing to sign over to the insurance company all their rights against the party that caused the loss.

Question 8

What are the salvage rights of an insurer after payment of a property claim?

Answer 8

The insurer has salvage rights after the payment of a property claim, in that if there is some value still remaining in the property, the insurer may pay the claim as if it was a total loss. In that case the remaining property, or salvage, becomes the property of the insurance company. Commonly used for automobile or other personal property claims.