CAIB 1 Definitions

Speculative Risk - Answer- The chance of financial loss or gain Contract - Answer- an agreement between 2 or more people which creates and obligation to do or not do something Indemnity - Answer- -Indemnity is measured by the value of the insured property as it existed immediately prior to the loss Security against damage, loss, or injury. 2. An exemption from liability for damages resulting from specified conduct, as in a contract indemnifying a party for the performance of certain actions. 3. Compensation for damage, loss, or injury suffered 4. application of the principle of indemnity ensures people receive the actual amount of their loss, no more and no less Insurable Interest - Answer- 1.Required in all insurance contracts 2. Must show that they would suffer financially by a loss 3. examples - own the business, mortgage holder, bailee or someone that would be held legally responsible to a third party for injury or damage Fiduciary - Answer- One who occupies a special position of trust or confidence in the handling or supervising in the affairs or funds of others Additional living expenses - Answer- Coverage that provides for additional cost of living elsewhere when the dwelling is damaged by an insured peril and the damage is sufficient to make the dwelling unfit for occupancy. Also covers fair rental value if part of the dwelling was rented or being held for rental at the time of the loss. Payment is made only for: The reasonable time that is required to repair or rebuild the dwelling. If the insured decides to permanently relocate, the reasonable time required to settle elsewhere. Vandalism - Answer- The wilful or ignorant destruction of property Theft - Answer- All means of taking property without the owners consent. Condominium - Answer- A system of separate ownership of individual units in a multiple unit building Peril - Answer- The cause of loss ie fire, water Vacant - Answer- Refers to circumstances where, regardless of the presence of furnishings, all occupants have moved out with no intention of returning and where in a new building no one has taken up residence Direct loss - Answer- Occurs when the peril insured actually attacks the object of insurence Negligence - Answer- The omission to do what a resonable man, guided by those ordinary considerations which ordinarily regulate human affairs, would do, or the doing of something wich a reasonable and prudent man would not do.