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