C12 - Insurance on Property - Midterm Exam Questions with Correct Answers Latest Update
2025/2026
Defining Property Insurance - Answers -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 - Answers R: buildings or land (can't be moved)
P: office desk or machinery (can be transported)
Promise that Property Insurance is based on - Answers -Insured promise to pay a premium
-Insurers promise to protect and indemnify
Five elements of an Insurance Contract - Answers 1. Agreement (offer and acceptance)
2. Capacity to contract
3. Consideration
4. Genuine intent
5. Legality
Additional Features of Insurance Contract - Answers 1. Insurable interest
2. Indemnity
3. Principle of utmost good faith
Insurance Policy - Answers -Formal agreement between parties
-Outlines the terms and conditions
-One year term
-Claims
2 Types of Classes of Insurance - Answers 1. Personal (habitational)
,2. Commercial (building, equipment, stock)
Classes of Insurance - Answers 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 - Answers 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 - Answers 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 - Answers -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 - Answers -Specific circumstances
-Temporary or permanent
-May exclude part of the coverage
-Restricts
The 2 Groups of Basic Fire Policy Exclusions - Answers 1. Exclusions of legislative
, considerations
2. Exclusions for underwriting and rating considerations
Group 1: Exclusions for Legislative Considerations - Answers 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 - Answers 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 - Answers 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 - Answers 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 - Answers 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
2025/2026
Defining Property Insurance - Answers -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 - Answers R: buildings or land (can't be moved)
P: office desk or machinery (can be transported)
Promise that Property Insurance is based on - Answers -Insured promise to pay a premium
-Insurers promise to protect and indemnify
Five elements of an Insurance Contract - Answers 1. Agreement (offer and acceptance)
2. Capacity to contract
3. Consideration
4. Genuine intent
5. Legality
Additional Features of Insurance Contract - Answers 1. Insurable interest
2. Indemnity
3. Principle of utmost good faith
Insurance Policy - Answers -Formal agreement between parties
-Outlines the terms and conditions
-One year term
-Claims
2 Types of Classes of Insurance - Answers 1. Personal (habitational)
,2. Commercial (building, equipment, stock)
Classes of Insurance - Answers 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 - Answers 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 - Answers 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 - Answers -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 - Answers -Specific circumstances
-Temporary or permanent
-May exclude part of the coverage
-Restricts
The 2 Groups of Basic Fire Policy Exclusions - Answers 1. Exclusions of legislative
, considerations
2. Exclusions for underwriting and rating considerations
Group 1: Exclusions for Legislative Considerations - Answers 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 - Answers 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 - Answers 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 - Answers 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 - Answers 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
