C12-INSURANCE ON PROPERTY - MIDTERM NEW EXAM QUESTIONS AND
CORRECT ANSWERS FOR TOP PERFORMANCE
Defining Property Insurance - ANSWER -Protection against
loss/damage to property
-First party insurance
-Premium exchanged for protection
-Fortuitous losses (sudden and accidental)
-Insurable interest
-Intangible product
Real vs Personal Property - ANSWER R: buildings or land (can't be
moved)
P: office desk or machinery (can be transported)
Promise that Property Insurance is based on - ANSWER -Insured
promise to pay a premium
-Insurers promise to protect and indemnify
Five elements of an Insurance Contract - ANSWER 1. Agreement (offer
and acceptance)
2. Capacity to contract
3. Consideration
4. Genuine intent
5. Legality
Additional Features of Insurance Contract - ANSWER 1. Insurable
interest
2. Indemnity
3. Principle of utmost good faith
Insurance Policy - ANSWER -Formal agreement between parties
-Outlines the terms and conditions
-One year term
-Claims
2 Types of Classes of Insurance - ANSWER 1. Personal (habitational)
,2. Commercial (building, equipment, stock)
Classes of Insurance - ANSWER 1. EBI - large machinery
2. Crop growing of crops
-
3. Aviation aircrafts-
4. Earthquake
5. Flood
6. Marine goods in transit
-
7. Builders risk COC -
Elements of the Property Policy ANSWER 1. Name of insurer / insured
-
2. Names to whom the insurance money is payable
3. Premium
4. Subject matter of insurance
5. Indemnity for which insurer may become liable
6. Events / perils of which liability will accrue
7. Effective / expiry date
Deductible definition - ANSWER An agreed, specified amount that the
insured must pay on a claim before the insurance company will cover
the rest of the claim
Evolution of Property Insurance - ANSWER -First insurance policy = fire
policy.
It covered fire, lightning and limited explosion
-Then it evolved into additional perils. So insurance against named perils
or all risks
Purpose of Exclusions ANSWER -Specific circumstances
-
-Temporary or permanent
-May exclude part of the coverage
-Restricts
The 2 Groups of Basic Fire Policy Exclusions - ANSWER 1. Exclusions
of legislative considerations
2. Exclusions for underwriting and rating considerations
Group 1: Exclusions for Legislative Considerations - ANSWER 1.
Electrical devices
2. Application of heat
3. War risks
4. Nuclear incident (exclusions also applies to radioactive material)
, Group 2: Exclusions for Underwriting and Rating Considerations -
ANSWER 1. Excluded property
2. Alterations and additions exclusion
3. Vacancy, unoccupancy, or disuse exclusion
4. Volatile substances
5. By-laws exclusion
The Basic Fire Policy: Statutory Conditions - ANSWER Legislation
stipulates:
-Conditions must be printed
-Avoid any changes
-Only applies to fire insurance
Quebec has no equivalent, articles are not enclosed
The Basic Fire Policy Extensions - ANSWER 1. Removal of insured
-
property extends any remaining coverage to insured property removed
-
from insured locations to prevent further damage
2. Debris removal covers the expense of removing ruble or debris from
-
the insured location, as a result of loss or damage by an insured peril
Additional Perils ANSWER Broadening of the basic policy
-
1. explosion (beyond basic fire)
2. Impact by aircraft / spacecraft / land vehicle
3. Riot, vandalism or malicious acts
4. Smoke
5. Leakage from fire protective equipment
6. Windstorm or hail
Other additional perils - ANSWER -Falling object
-Glass breakage
-Water damage
Multi-Peril Policies ANSWER -Combine policy
- forms, covering various
classes of business in package policies
-Perils were on different policies
-Combines perils:
Theft, loss in transit
Mortgages and Mortgagees - ANSWER -Protection for financial lenders
-Mortgage interest in property as security for a debt
=
-Mortgage clause:
CORRECT ANSWERS FOR TOP PERFORMANCE
Defining Property Insurance - ANSWER -Protection against
loss/damage to property
-First party insurance
-Premium exchanged for protection
-Fortuitous losses (sudden and accidental)
-Insurable interest
-Intangible product
Real vs Personal Property - ANSWER R: buildings or land (can't be
moved)
P: office desk or machinery (can be transported)
Promise that Property Insurance is based on - ANSWER -Insured
promise to pay a premium
-Insurers promise to protect and indemnify
Five elements of an Insurance Contract - ANSWER 1. Agreement (offer
and acceptance)
2. Capacity to contract
3. Consideration
4. Genuine intent
5. Legality
Additional Features of Insurance Contract - ANSWER 1. Insurable
interest
2. Indemnity
3. Principle of utmost good faith
Insurance Policy - ANSWER -Formal agreement between parties
-Outlines the terms and conditions
-One year term
-Claims
2 Types of Classes of Insurance - ANSWER 1. Personal (habitational)
,2. Commercial (building, equipment, stock)
Classes of Insurance - ANSWER 1. EBI - large machinery
2. Crop growing of crops
-
3. Aviation aircrafts-
4. Earthquake
5. Flood
6. Marine goods in transit
-
7. Builders risk COC -
Elements of the Property Policy ANSWER 1. Name of insurer / insured
-
2. Names to whom the insurance money is payable
3. Premium
4. Subject matter of insurance
5. Indemnity for which insurer may become liable
6. Events / perils of which liability will accrue
7. Effective / expiry date
Deductible definition - ANSWER An agreed, specified amount that the
insured must pay on a claim before the insurance company will cover
the rest of the claim
Evolution of Property Insurance - ANSWER -First insurance policy = fire
policy.
It covered fire, lightning and limited explosion
-Then it evolved into additional perils. So insurance against named perils
or all risks
Purpose of Exclusions ANSWER -Specific circumstances
-
-Temporary or permanent
-May exclude part of the coverage
-Restricts
The 2 Groups of Basic Fire Policy Exclusions - ANSWER 1. Exclusions
of legislative considerations
2. Exclusions for underwriting and rating considerations
Group 1: Exclusions for Legislative Considerations - ANSWER 1.
Electrical devices
2. Application of heat
3. War risks
4. Nuclear incident (exclusions also applies to radioactive material)
, Group 2: Exclusions for Underwriting and Rating Considerations -
ANSWER 1. Excluded property
2. Alterations and additions exclusion
3. Vacancy, unoccupancy, or disuse exclusion
4. Volatile substances
5. By-laws exclusion
The Basic Fire Policy: Statutory Conditions - ANSWER Legislation
stipulates:
-Conditions must be printed
-Avoid any changes
-Only applies to fire insurance
Quebec has no equivalent, articles are not enclosed
The Basic Fire Policy Extensions - ANSWER 1. Removal of insured
-
property extends any remaining coverage to insured property removed
-
from insured locations to prevent further damage
2. Debris removal covers the expense of removing ruble or debris from
-
the insured location, as a result of loss or damage by an insured peril
Additional Perils ANSWER Broadening of the basic policy
-
1. explosion (beyond basic fire)
2. Impact by aircraft / spacecraft / land vehicle
3. Riot, vandalism or malicious acts
4. Smoke
5. Leakage from fire protective equipment
6. Windstorm or hail
Other additional perils - ANSWER -Falling object
-Glass breakage
-Water damage
Multi-Peril Policies ANSWER -Combine policy
- forms, covering various
classes of business in package policies
-Perils were on different policies
-Combines perils:
Theft, loss in transit
Mortgages and Mortgagees - ANSWER -Protection for financial lenders
-Mortgage interest in property as security for a debt
=
-Mortgage clause:
