Property Insurance C12 Chapter 1 Study Guide

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Property Insurance - C12 - Chapter 1
What is uberrimae fidei? - CORRECT ANSWER-Utmost good faith

Define property insurance - CORRECT ANSWER-First-party insurance that
indemnifies the owner or user of property for its loss, or the loss of its income
producing ability, when the loss or damage is caused by a covered cause of loss.

Define Insurable interest - CORRECT ANSWER-An interest that a insured must
have in the subject matter of insurance purchased, so that in the event of a loss,
the I sure will suffer a pecuniary loss.

In other words, to recover for loss or damage that is covered, one must stand to
benefit or suffer from its loss.
I.e Lender

Define insureds or policyholders - CORRECT ANSWER-When someone obtains
insurance from an insurance company or an insurer

Define Principle of indemnity - CORRECT ANSWER-The principle is that the
insured shall not receive more than the actual loss suffered. The objective is to
return the insured back to it's original financial position prior to the loss.

Define contract (Common Law) - CORRECT ANSWER-An agreement or promise
between two or more persons that is intended to be legally enforceable.

In Common Law, what are the key elements needed in a legal contract? -
CORRECT ANSWER-1. An agreement
2. between legally capable parties
3. for consideration
4. demonstrating intent
5. to do something that is legal

Define contract (Civil code of QB) - CORRECT ANSWER-An agreement of wills
by which one or several persons obligate themselves to one or several other
persons to perform a prestation.




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Prestation : a duty, service, or payment

Define utmost good faith - CORRECT ANSWER-This is the basis of all insurance
contracts, it calls for the highest standards of integrity from the insured and the
insurer. Both parties are bound to exercise good faith and do so by a full
disclosure of all information material to the proposed contract.

Uberrimae fidei

Define insurance policy - CORRECT ANSWER-It is a formalized agreement
between the buyer and the seller of insurance (the insured and insurer). The
policy contains terms, clauses, stipulations and requirements.

The terms of the policy state what the insurer will do and what coverage will be
provided, and what the insured will do and what coverages he will receive.

Name some classes of insurance (9) - CORRECT ANSWER-1) Habitational
2) Commercial
3) Aviation
4) Boiler
5) Builders risk
6) Crop
7) Earthquake
8) Flood
9) Marine

Define peril - CORRECT ANSWER-The event that caused a loss covered by the
policy.

Ex. fire, windstorm

What are the elements of property insurance policy? - CORRECT ANSWER-1)
The name of the insurer
2) The name of the insured
3) The name of the person or persons to whom the insurance money is payable
4) The amount or method of determining the amount, of premium for insurance




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