C12 - Insurance on Property – Midterm questions with answers

C12 - Insurance on Property – Midterm
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questions with answers |\ |\




Defining Property Insurance - CORRECT ANSWERS ✔✔-Protection
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against loss/damage to property
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-First party insurance
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-Premium exchanged for protection |\ |\ |\




-Fortuitous losses (sudden and accidental) |\ |\ |\ |\




-Insurable interest |\




-Intangible product |\




Real vs Personal Property - CORRECT ANSWERS ✔✔R: buildings or
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land (can't be moved)
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P: office desk or machinery (can be transported)
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Promise that Property Insurance is based on - CORRECT
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ANSWERS ✔✔-Insured promise to pay a premium |\ |\ |\ |\ |\ |\




-Insurers promise to protect and indemnify
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Five elements of an Insurance Contract - CORRECT ANSWERS
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✔✔1. Agreement (offer and acceptance)
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2. Capacity to contract
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3. Consideration
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,4. Genuine intent
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5. Legality
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Additional Features of Insurance Contract - CORRECT ANSWERS
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✔✔1. Insurable interest
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2. Indemnity
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3. Principle of utmost good faith
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Insurance Policy - CORRECT ANSWERS ✔✔-Formal agreement
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between parties |\




-Outlines the terms and conditions
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-One year term
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-Claims


2 Types of Classes of Insurance - CORRECT ANSWERS ✔✔1.
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Personal (habitational)|\




2. Commercial (building, equipment, stock)
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Classes of Insurance - CORRECT ANSWERS ✔✔1. EBI - large
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machinery
2. Crop - growing of crops
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3. Aviation - aircrafts
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4. Earthquake
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5. Flood
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,6. Marine - goods in transit
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7. Builders risk - COC
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Elements of the Property Policy - CORRECT ANSWERS ✔✔1. Name
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of insurer / insured
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2. Names to whom the insurance money is payable
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3. Premium|\ |\




4. Subject matter of insurance
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5. Indemnity for which insurer may become liable
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6. Events / perils of which liability will accrue
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7. Effective / expiry date
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Deductible definition - CORRECT ANSWERS ✔✔An agreed, |\ |\ |\ |\ |\ |\ |\


specified amount that the insured must pay on a claim before the
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insurance company will cover the rest of the claim
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Evolution of Property Insurance - CORRECT ANSWERS ✔✔-First
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insurance policy = fire policy. |\ |\ |\ |\




It covered fire, lightning and limited explosion
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-Then it evolved into additional perils. So insurance against
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named perils or all risks |\ |\ |\ |\




Purpose of Exclusions - CORRECT ANSWERS ✔✔-Specific
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circumstances
-Temporary or permanent |\ |\




-May exclude part of the coverage
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, -Restricts


The 2 Groups of Basic Fire Policy Exclusions - CORRECT ANSWERS
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✔✔1. Exclusions of legislative considerations
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2. Exclusions for underwriting and rating considerations
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Group 1: Exclusions for Legislative Considerations - CORRECT
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ANSWERS ✔✔1. Electrical devices |\ |\ |\




2. Application of heat
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3. War risks
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4. Nuclear incident (exclusions also applies to radioactive
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material)


Group 2: Exclusions for Underwriting and Rating Considerations -
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CORRECT ANSWERS ✔✔1. Excluded property
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2. Alterations and additions exclusion
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3. Vacancy, unoccupancy, or disuse exclusion
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4. Volatile substances
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5. By-laws exclusion
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The Basic Fire Policy: Statutory Conditions - CORRECT ANSWERS
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✔✔Legislation stipulates: |\




-Conditions must be printed |\ |\ |\




-Avoid any changes |\ |\




-Only applies to fire insurance
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