C12 property Final Exam 1-10 Questions and Answers Latest Update 2025/2026
Define property insurance. - Answers Property insurance
Protects the owner or user of property for its loss or loss of income-producing ability
Offers financial protection to an insured and to lending institutions
Covers occurrences or events that are sudden and accidental in nature
Property can include dwellings and detached buildings; personal property; and commercial
buildings, stock, and equipment.
Insurable interest - Answers —person or company stands to benefit from the continued
existence of the property or be prejudiced by its loss
Policy - Answers formalizes the agreement, contains terms, clauses, stipulations, and
requirements
Deductible - Answers the insured's portion of a covered loss
Types and classes of insurance - Answers Personal lines vs commercial lines
Special types: marine, aviation, builders risk, crop insurance
Specialized coverage: flood, earthquake, and equipment breakdown
Elements of policy - Answers The name of the insurer, insured, and to whom money is payable
The premium, the subject matter of insurance, the indemnity
The effective date and expiry date
Types of property covered, types of perils covered, exclusions of coverage
,Describe the evolution of property insurance. - Answers First type of property insurance was fire
insurance
As the needs and wants expanded, additional perils were added to fire policies
Fire policies have become property policies
The basic fire policy is rarely sold today
Exclusions - Answers provision in an insurance policy eliminating coverage for certain risks or
limiting coverage
Statutory conditions apply to - Answers all fire insurance contracts
Multi-peril policies combine - Answers the policy forms, covering various classes of business in
package policies
Basic Fire Policy - Answers named perils
- fire
-lighting
-explosion of natural, coal or manufactured gas
exclusions
-electrical devices
- application of heat
-war risk
- nuclear incident
- excluded property
- alterations and additions
- vacancy, unoccupancy or disuse
-volatile substances
,-by law
extensions
- removed of insured property
-debris removal
Expansion of Fire Policy into Property Insurance - Answers Additional Perils: Extended Coverage
(EC)
- Explosion (enhanced coverage)
- Impact by aircraft, spacecraft, or land vehicle
- Riot, vandalism, or malicious acts
- Smoke
- Leakage from fire-protective equipment
- Windstorm or hail
other additional perils
- Falling object
- Glass breakage
- Water damage
- Theft
- Loss in transit
who and what are covered in property insurance. - Answers The named insured may be one or
more people or a business
(Commercial policy—the owners of a business are entitled to coverage under the policy)
(Habitational policy—coverage applies named insured, spouse, other relatives, dependants)
Mortgage clause of the property policy protects mortgagee's interest
, Lenders usually insist that there be insurance on the property
The subject matter of the insurance must be described so that there is no uncertainty
Property insurance is concerned with direct loss—the value of the physical property that is
damaged or destroyed
key concepts that are reflected in property policies. - Answers A policy that limits the indemnity
must be clearly marked
Insurance on a particular item or object responds as first-loss insurance
Property policies contain the location of the property but may respond if location is not
identified in the policy declarations
Warranties restrict coverage specifically regarding the use, condition, or maintenance of the
insured property, such as alarm, jewellery in a vault, backwater valve, woodstove warranties
(Courts do not usually allow warranties to delete fundamental coverages such as fire, even
when violated such as fire insurance)
Automatic reinstatement
After claim is paid, policy limits are restored to the full amount on the declarations page
Payment of claim does not affect refund of premium if the policy on cancellation
Contract terms must be waived in writing and signed by a person authorized for that purpose by
the insurer
Loss must be fortuitous—accidental and not bound to happen in the ordinary course of events
Insureds must show that an insured peril was the proximate cause of the loss
Define property insurance. - Answers Property insurance
Protects the owner or user of property for its loss or loss of income-producing ability
Offers financial protection to an insured and to lending institutions
Covers occurrences or events that are sudden and accidental in nature
Property can include dwellings and detached buildings; personal property; and commercial
buildings, stock, and equipment.
Insurable interest - Answers —person or company stands to benefit from the continued
existence of the property or be prejudiced by its loss
Policy - Answers formalizes the agreement, contains terms, clauses, stipulations, and
requirements
Deductible - Answers the insured's portion of a covered loss
Types and classes of insurance - Answers Personal lines vs commercial lines
Special types: marine, aviation, builders risk, crop insurance
Specialized coverage: flood, earthquake, and equipment breakdown
Elements of policy - Answers The name of the insurer, insured, and to whom money is payable
The premium, the subject matter of insurance, the indemnity
The effective date and expiry date
Types of property covered, types of perils covered, exclusions of coverage
,Describe the evolution of property insurance. - Answers First type of property insurance was fire
insurance
As the needs and wants expanded, additional perils were added to fire policies
Fire policies have become property policies
The basic fire policy is rarely sold today
Exclusions - Answers provision in an insurance policy eliminating coverage for certain risks or
limiting coverage
Statutory conditions apply to - Answers all fire insurance contracts
Multi-peril policies combine - Answers the policy forms, covering various classes of business in
package policies
Basic Fire Policy - Answers named perils
- fire
-lighting
-explosion of natural, coal or manufactured gas
exclusions
-electrical devices
- application of heat
-war risk
- nuclear incident
- excluded property
- alterations and additions
- vacancy, unoccupancy or disuse
-volatile substances
,-by law
extensions
- removed of insured property
-debris removal
Expansion of Fire Policy into Property Insurance - Answers Additional Perils: Extended Coverage
(EC)
- Explosion (enhanced coverage)
- Impact by aircraft, spacecraft, or land vehicle
- Riot, vandalism, or malicious acts
- Smoke
- Leakage from fire-protective equipment
- Windstorm or hail
other additional perils
- Falling object
- Glass breakage
- Water damage
- Theft
- Loss in transit
who and what are covered in property insurance. - Answers The named insured may be one or
more people or a business
(Commercial policy—the owners of a business are entitled to coverage under the policy)
(Habitational policy—coverage applies named insured, spouse, other relatives, dependants)
Mortgage clause of the property policy protects mortgagee's interest
, Lenders usually insist that there be insurance on the property
The subject matter of the insurance must be described so that there is no uncertainty
Property insurance is concerned with direct loss—the value of the physical property that is
damaged or destroyed
key concepts that are reflected in property policies. - Answers A policy that limits the indemnity
must be clearly marked
Insurance on a particular item or object responds as first-loss insurance
Property policies contain the location of the property but may respond if location is not
identified in the policy declarations
Warranties restrict coverage specifically regarding the use, condition, or maintenance of the
insured property, such as alarm, jewellery in a vault, backwater valve, woodstove warranties
(Courts do not usually allow warranties to delete fundamental coverages such as fire, even
when violated such as fire insurance)
Automatic reinstatement
After claim is paid, policy limits are restored to the full amount on the declarations page
Payment of claim does not affect refund of premium if the policy on cancellation
Contract terms must be waived in writing and signed by a person authorized for that purpose by
the insurer
Loss must be fortuitous—accidental and not bound to happen in the ordinary course of events
Insureds must show that an insured peril was the proximate cause of the loss
