C12 - Insurance on Property – Midterm Exam Questions and Answers 100% Pass

C12 - Insurance on Property – Midterm Exam Questions and Answers 100% Pass Defining Property Insurance - Correct 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 - Correct Answer ️️ -R: buildings or land (can't be moved) P: office desk or machinery (can be transported) Promise that Property Insurance is based on - Correct Answer ️️ --Insured promise to pay a premium -Insurers promise to protect and indemnify Five elements of an Insurance Contract - Correct Answer ️️ -1. Agreement (offer and acceptance) 2. Capacity to contract 3. Consideration 4. Genuine intent 5. Legality Additional Features of Insurance Contract - Correct Answer ️️ -1. Insurable interest 2. Indemnity 3. Principle of utmost good faith Insurance Policy - Correct Answer ️️ --Formal agreement between parties -Outlines the terms and conditions -One year term -Claims 2 Types of Classes of Insurance - Correct Answer ️️ -1. Personal (habitational) 2. Commercial (building, equipment, stock) Classes of Insurance - Correct 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 - Correct 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 - Correct 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 - Correct 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 - Correct Answer ️️ --Specific circumstances -Temporary or permanent -May exclude part of the coverage -Restricts The 2 Groups of Basic Fire Policy Exclusions - Correct Answer ️️ -1. Exclusions of legislative considerations 2. Exclusions for underwriting and rating considerations Group 1: Exclusions for Legislative Considerations - Correct 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 - Correct 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 - Correct 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 - Correct 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 - Correct Answer ️️ -Broadening of the basic polic