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213 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is meant by “spread of risk?” |
The ability to contribute to a fund-to share the losses of the few among the many |
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Five functions of insurance-What is the basis of Credit system? |
Consumer access to insurance frees up credit |
What is |
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Five functions of insurance- what is Eliminates worry-encourages entrepreneurship? |
The availability of insurance allows people to engage in many ventures without having to set money aside for future losses |
Five functions of insurance |
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Five functions of insurance- What is Loss prevention and Loss reduction? |
In addition to paying for losses, the industry works hard to prevent losses and to reduce their severity’s |
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Five functions of insurance- What is Source of employment and investment capital? |
Canadian insurers employ or contract services from more than 100,000 people, including independent brokers, adjusters, and actuaries. |
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Define Risk |
“The object of insurance” ie building |
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Define Peril |
“The cause of loss” ie fire, wind of hail |
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Three types of insurance included within the broad area of “property and casualty insurance “ |
Auto, property and liability |
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What is another name for Property and casualty insurance? |
General insurance |
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What are the two major types of insurers? Identify and provide examples of organizational differences |
Private and Government. Private: Owner by shareholders and Policy holders. Main purpose is to derive a profit from their investment Government: Provided by the government. Compete directly with private insurance. |
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Two methods used by insurers to sell their products: |
Direct writing system: Producers are employees of the insurer and are limited to selling only those products provided by the insurer. Independent brokerage system: Not employees of insurers and choose to represent more than one company
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How does the direct writing system deal with remuneration? |
Salary or commission base |
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How does an independent brokerage deal with remuneration? |
They are paid a commission by the insurer on all the business it writes . |
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How does the direct writing system deal with the ownership of client files? |
The insurer owns all of the business written and performs all administrative functions. |
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Which distribution method is most common for insurance? |
Independent brokerage system |
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Identify 3 major categories of insurance needs |
Personal risk, property risk and liability risk |
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Identify 4 options an insured may use in dealing with risk . Which is least practical? |
Avoidance, controlling, retention and transfer Least practical is avoidance |
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What are two types of risk, and describe. |
Speculative risk:possibility of either financial loss or gain Pure risk: the chance of financial loss with no chance of financial gain
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Which risk is insurable? Speculative or Pure? |
Pure |
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Define contract |
An agreement between two or more parties which is enforceable at law. |
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Identify 5 elements required to be present in all contracts |
Agreement, consideration, legality of object, legal capacity of the parties to contract and genuine intention |
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Identify the 3 additional elements which are unique to insurance contracts and which must be present if an insurance contract is to be enforceable at law |
Insurable interest, utmost good faith, indemnity |
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In the insurance business, it is common for brokers to “bind” an insurer on a risk. Explain. |
The broker has committed the insurer to provide a contract of insurance on the subject matter under discussion (oral or written) |
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Identify two documents or sources which brokers can refer to in order to determine the extent of “binding authority “ given to them. |
Oral and written contracts |
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Identify three types of insurance forms used by insurers to make changes to an existing policy State the purpose of each |
Endorsements or riders: Acknowledges a change in the terms of the contract Floaters: Provides coverage for property having a high degree of mobility. Separate policies: To provide additional coverages needed by insureds |
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Explain the role of the Property and Casualty insurance compensation corporation when an insurer becomes insolvent (role of gov in the industry section) |
When a bankruptcy occurs and claims can not be paid, the corporation pays all valid claims. All participating insurance companies are then charged an assessment to cover the total amount of the claims |
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Insurance is “fiduciary “ in nature. Define “fiduciary” |
One who handles other people’s money |
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Explain the fiduciary obligations of insurers and brokers |
Insurers: They will retain a certain portion of all premiums collected in order to pay claims Brokers: When premiums are paid, they will be forwarded to the insurance company |
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Briefly summarize the provisions of the “removal” clause contained in policies of fire insurance |
The insurer may remove said property to another location to prevent damage to it, and still be covered |
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State the meaning of “subrogation” and indicate how this right is exercised by the insurer |
The law provides that once having paid the claim, the insurer is entitled to the same rights of recovery against the responsible party as rested with the insured. The act allows the insurer to place itself “in the insured’s shoes” in respect of their right to recover the amount of the loss from the responsible party. |
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How can a term or condition of the insurance contract be waived by an insurance broker? Explain |
Only under the signature of a “ person authorized for that purpose by the insurer “ Normally an officer of the insurance company |
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Your clients received their policy one month ago. It has not yet been paid for. Yesterday, they had a fire loss. What affect does the delivery of the policy have on the obligations of the insurer? |
It shall be binding on the insurer as if the premium had been paid. |
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Identify three coverages required to be provided on all policies of fire insurance |
Fire, lightning and explosion of natural gas, coal or manufactured gas |
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Explain and provide an example of: Friendly fire and Hostile fire Which one is insured by a fire policy? |
Friendly fire: is one that is contained in its proper receptacle. It is where it is supposed to be Hostile fire: A fire which escapes from its receptacle or originates outside of any such receptacle is a hostile fire. Only Hostile fires are insured by the fire policy |
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State the risk of the broker in the insurance process |
Represent clients interest. Brokers may choose to represent one insurance company, but in most case they offer a choice of more |
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Identify the most common cause of errors and omissions claims |
Inadequate coverage (50% of all claims) |
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Who are underwriters, and what is their primary role? |
Underwriters are employees of insurance companies. Their primary role is to select those risks likely to be most profitable for the insurer |
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Identify three sources of information used by underwriters when making a decision regarding the suitability of a risk |
Application, broker, loss experience data and inspection reports |
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Explain the term Physical hazard and provide an example |
Conditions relating to the premises which may cause a peril to occur ie type of building construction, occupancy, housekeeping |
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Explain the term “moral hazard” and provide an example |
Subjective characteristics of the applicant that could cause a peril to occur ie financial condition, moral character, indifference to loss |
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Identify the two steps normally taken when a loss occurs |
Insured reports claim to brokerage and brokerage reports claim to insurer |
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Explain the difference between “company” adjusters and “independent” adjusters |
A company adjuster is an employee of the insurance company. An independent adjuster is contracted by the insurance company |
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Define Personal property insurance |
Insurance policies provided for property having a personal or non-business use |
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Define commercial property insurance |
Insurance policies provided for property having a business use |
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State the main difference between “named perils” policies and the broader “all risks” policies provided by most insurers |
Named perils cover only perils which are named in the policy. All risks means all causes of loss are insured unless specifically excluded by the policy |
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Identify the types of property insured by policies of personal property insurance |
Dwelling building, detached private structures and personal property |
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Identify the types of property insured by policies of commercial property insurance |
Building , stock and equipment |
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Property policies insure direct damage only. Explain and provide examples of direct damage and indirect damage |
Direct: when the object of insurance is damaged or destroyed by an insured peril ie water damage from firefighters hoses
Indirect: Arise as a consequence of direct losses ie loss of food in a freezer when the electrical motor is damaged by a lightning strike |
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Insurance policies conditions and warranties . Identify two types of conditions |
Statutory conditions such as accident and sickness insurance, auto insurance and all property policies insuring the peril of fire |
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Define warranty |
A promise by insureds that certain facts are truly as they are represented to be and that they will remain so |
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Conditions and warranties: Describe policy conditions |
They deal with important coverage areas |
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Exclusions are common to all property insurance policies. Provide two reasons why insurance policies contain exclusions . |
Potential for catastrophic losses is of concern. War is a loss that could jeopardize the solvency of insurers |
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Define deductible |
A deductible represents the amount the insured is required to pay for each loss before receiving any payment from the insurer |
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How are property claims are settled for one item of a pair or set? |
The item not lost continues to have value and this amount will be deducted from the amount of the claim payment |
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Property claims. Explain how one part of property which consists of several parts is settled |
When there is loss to only one part of property which consists of several parts, the basis of settlement shall be the value of the lost of damages part,, including the cost of installation |
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“Indemnity agreement “- State the three criteria considered by the adjuster in determining the amount of the loss. |
The actual cash value of the property at the time of the loss or damage. The interest of the insured in the property. The amount of insurance specified on the “declarations page” in respect of the property lost or damaged |
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“Indemnity agreement “ - When the value for each of these criteria has been determined, the adjuster will make an offer to the insured. What is the basis of the offer made to the insured? |
ACV=Replacement cost -depreciation |
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“Indemnity agreement” - identify four factors used to determine the amount of depreciation when insured property is lost or damaged |
Condition of the item, obsolescence, resale value, and normal life expectancy |
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Identify three provisions relating to replacement cost coverage |
Replacement shall be effected by the insured with due diligence and dispatch. Replacement shall be on the same site or an adjacent site Settlement on a replacement cost basis shall be made only when replacement has actually been effected |
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What is the basis of settlement when all of the replacement cost policy provisions are not met? |
Settlement will be made on an ACV basis |
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Define “replacement cost “ |
Replacing or repairing, constructing or reconstructing |
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Identify two important provisions to be followed by the insurer when making settlement on a replacement cost basis |
Property was useable for its original purpose at the time of loss and the property was repaired or replaced promptly |
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Explain the basis of settlement under a “ valued” policy |
When insureds have property which cannot be replaced (art, family jewelry) the insurer may agree to provide coverage on a valued basis |
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Who can be a mortgagee? |
Anyone having an insurable interest in the property insured ie bank, trust company , credit union, individual or group of people |
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Identify two guarantees provided to mortgagees by the Standard mortgage clause |
Guarantee of payment when insured breaches any policy conditions. Guarantee that the insurer will not reduce coverages to the prejudice of the mortgagee nor terminate the policy without providing it with the same notice required by law to be given to the insured |
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Identify four persons included in the definition of “you” or “your” and who would be “insureds” under the policy. |
The person named as insured on the coverage summary page and, those living in the same household. ie Spouse/partner or natural or adoptive child living with insured for the period of one year |
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When only one person is named as the insured on the policy and a claim is made by their “spouse” or common law partner, the insurer will agree to pay the claim when certain evidence is provided to it. Identify three ways in which such person might qualify for coverage. |
Proof of marriage, in a conjugal relationship outside marriage continuously for a period of three years, the natural or adoptive parent of a child, living with the named for a period of one year |
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Each homeowners form contains two coverage sections. Identify these coverage sections and the coverages provided by each. |
1. Property coverages : Dwelling building, detached private structures, personal property, additional living expense 2. Liability coverage: personal liability, voluntary medical payments, voluntary payment for damage to property, voluntary compensation for residence employees |
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Identify the items insured under Coverage A- Dwelling building |
The dwelling and attached structures |
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Explain the coverage provided for “outdoor trees, shrubs and plants” |
The insured can opt to apply as much as 5% of the amount of insurance on the “dwelling building “ to outdoor trees, shrubs and plants on the premises |
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State the three insuring agreements included within Coverage C - personal property |
On premises coverage, off premises coverage and property of students |
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Coverage C - personal property. Identify three types of personal property items excluded under this coverage |
Motorized vehicles or their equipment, camper units, truck caps trailers or their equipment and aircraft or their equipment |
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Coverage C- personal property. State the territorial limits provided for personal property which is away from the insureds premises |
Only property which is temporarily removed is insured. Property which is normally kept at any other location owned by the insured is not covered by the policy. |
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Coverage C- Property Identify two types of losses for which “Special limits of insurance “ are provided and give examples |
1. Those which apply to specified property items, regardless of the cause of the loss ie Business property (books, tools, instruments), securities (stocks, bonds), personal property used by any student temporarily living away from home, money including cash cards, garden type tractors, watercraft, computer software 2. Those which apply to specified property items which have been stolen. ie jewelry, watches, fur, collectible cards, bikes |
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Identify the two coverages provided under Coverage D- additional living expense |
Additional living expense and fair rental value |
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Indicate the circumstances under which coverage would be provided for additional living expense |
When the dwelling is damaged by the insured peril and the damage is sufficient to make the dwelling unfit for occupancy |
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State the basis of claim payment for Additional living expense |
Additional living expenses only. Payment is limited to those costs “over and above” what it would normally have cost the insureds to live. |
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Summarize the insuring agreement for Debris removal |
Available when loss or damage is caused by an insured peril. If the amount payable for loss, including expense for debris removal is greater than the amount of insurance, an additional 5% of that amount will be available to cover debris removal expenses. |
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Summarize the insuring agreement for “Property removed” |
The coverage is provided for property which has been removed to protect it from loss or damage for 39 days or until the expiry of the policy, whichever occurs first |
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Summarize the insuring agreement for “Moving to another home” |
Coverage is automatically extended to insure property while in transit to and at another location which is to be occupied by the insureds as their principal residence. Coverage is restricted to Canada and is provided for 30 consecutive days only, or until policy expires. |
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Summarize the insuring agreement for “fire department expenses” |
Up to $1000 for fire department charges is provided. The deductible is not applied to this coverage |
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Summarize the insuring agreement for “Change of temperature “ |
Coverage is provided for loss or damage to personal property due to a change in temperature resulting from physical damage to the dwelling or equipment from an insured peril. |
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Summarize the insuring agreement for “freezer food” |
The homeowners form provide up to $2000 for food contained in a freezer located on the insureds premises when the loss or damage is due to power failure or mechanical failure |
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Summarize the insuring agreement for “tear out” |
There is coverage for the repairs of walls, ceilings, or other parts of insured buildings which must be torn apart before water damage from pipes or a domestic water container can be repaired. |
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State the basis of settlement applicable to Personal property |
Actual cash value |
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State the basis of settlement applicable to Personal property |
Actual cash value |
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State the basis of settlement for Dwelling building and detached private structures |
Insurer pays the cost of repairs or replacement (whichever is less) without deduction or depreciation. |
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Identify two expenses provided by the Mobile home insurance policy for “emergency removal expense. |
Expenses incurred in disconnecting water and power services and towing or transporting costs |
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State the responsibility of the Condominium Corporation respecting the purchase of insurance |
To insure the value of the building and all common elements |
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Explain why the condominium unit owner should purchase “Loss assessment “ coverage. |
If coverage on the Corporation’s policy is inadequate to cover a loss to collectively owned property, a special assessment may be levied against unit owners as members of the corporation |
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State the basic difference between the named perils and broad form policies |
Named perils insures against specific things insured .Broad form insured against “all risks of direct physical loss or damage “ |
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Identify 5 insurance coverages provided by the broad form policy that are not provided by the named perils form |
Vehicle impact damage to insureds buildings, smoke damage, water damage due to freezing or ruptured lines, theft and collapse |
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Identify 5 factors used by insurers in establishing the base rate to be charged for insuring commercial property |
Construction, protection, occupancy, location and claims history |
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Each of “building”, “stock “, and “equipment “ include a number of items, the value of which must be included in the total amounts of insurance purchased . Identify at least 3 other specific types of property which can be insured under the definition of “building”, “stock “, and “equipment .” |
Office furniture, staff room furnishings, portable shelving units and display cases, photocopiers, phones, computers, forklift and tractors |
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Identify the types of losses to which the Co-insurance Clause applies |
Partial losses only |
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Summarize the solution devised by insurers to discourage people from deliberately under-insuring |
The minimum limits of insurance required to be purchased is usually set by the insurer at no less than 80% of the ACV of the property insured. |
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State the formula for the calculation of the settlement amount on policies containing a co-insurance clause |
Did/should x Amount of loss = settlement Did=Amount of insurance purchased Should= Percentage of insurance required |
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Explain the coverages provided for debris removal |
For expenses incurred in the removal of debris of the property insured, occasioned by loss or damage to such property. For expenses incurred in the removal of debris or other property which is not insured by this form but which has been blown by windstorm upon a location specified on the “declarations page” |
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Summarize the provisions of the “reinstatement Clause “ |
Loss under any items of this form shall not reduce the applicable amount of insurance. Insureds shall have as much insurance after a loss as they did before it. |
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While the “Subrogation Clause” recognizes the right of the insurer to collect the amount of any loss paid by it from the party responsible for the loss, the insurer agrees not to exercise that right in all cases. Explain |
The insurer agrees not to exercise the right of subrogation against any party having an insurable interest in the property insured. Insurer agrees not to subrogate against payers, business partners and subsidiary firms |
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Identify 3 obligations placed upon insureds by the “Property Protection Systems” Clause. |
1. Advise the insurance company if any interruption to, or flaw or defect within their knowledge to any system 2. Immediately notify the insurance company when insureds cancel, or fail to renew , any contract providing maintenance or monitoring services. 3. To notify insurer when police may suspend service to premises due to false alarms |
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Summarize the provisions of the “locked vehicle warranty” |
Any vehicle in which property is carried is equipped with a fully enclosed body or compartment, and the insurer shall be liable in case of a loss by theft from an unattended vehicle only as a direct result of forcible entry (visible evidence) |
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Identify the evidence required before the insurer will provide payment for the following policy: Burglary insurance |
Only when there is evidence that force was used to take insured property |
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Identify the evidence required before the insurer will provide payment for the following policy: Robbery insurance |
-Actual or threatened force is used to take insured property form a person having control over it -insured property is taken from a custodian who is killed or rendered unconscious -the custodian witnessed the taking of insured property by a person not authorized to have it |
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Identify the evidence required before the insurer will provide payment for the following policy: Theft insurance |
Insureds need to only show that the insured property was taken without their consent |
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Identify two key coverages provided by a Boiler and Machinery policy |
Loss or damage to buildings resulting from the explosion of boilers or pressure vessels operating in excess of 15lbs/sq inch and Electrical or mechanical breakdown |
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Identify 3 different types of property items insured by the Builders Risk- Broad form (IBC 4042) |
Landscaping, temporary buildings, forms, hoardings and scaffolding |
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The project is not expected to be completed for at least 10 months. The General contractor wants to purchase only $50,000 at the start and to increase that amount as needed. Explain whether the insurer would be prepared to insure the policy on this basis |
Insurers are required to purchase an amount of insurance which is equivalent to it’s completed value. The rate charged by the insurer reflects the gradual increase in value during the period of construction. |
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Identify 4 characteristics common to Business interruption policies |
1.Contract of indemnity (restores lost income after a loss to the level it would have been had the loss not occurred 2. Insures same perils as property Policy (before payment is made, it must be shown that actual damage was caused to insured property by a peril covered by the commercial property insurance policy) 3. Coverage not limited to Policy period (payment will continue to be made even if the insureds commercial property insurance policy expires during the period of interruption) 4. Pay expenses when they reduce the amount of loss (speed up repairs or rent alternate premises) |
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State the basic difference between the Earnings Form and Profits form |
Earnings- Coverage commences at the time of the loss and continues until the property is rebuilt, repaired or replaced Profits- Coverage commences at the time of the loss and ceases when the income I restored to the level it would have been has the loss not occurred |
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State the purpose of Extra Expense insurance |
Insures all necessary extra expenses incurred by insureds in continuing normal business operations after a loss |
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Provide 3 examples of extra costs insured by the Extra Expense insurance |
Rent temporary premises, rent temporary equipment, install telephones, pay overtime salaries, pay bonus for quick service |
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Define “civil law” |
Settling disputes between individuals or other entities in matters not involving a criminal act. |
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What is the goal in a civil action? |
To seek compensation for the amount of the financial loss or damage suffered by the insured party. |
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Identify two main areas of law comprising civil law |
Common law and statute law |
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Define “tort” |
A wrongful act which has negligently caused damage or injury to another |
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Provide 3 examples of torts |
Trespass , nuisance, defamation, false arrest, invasion of privacy, negligence |
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Identify 3 elements required to be present in every tort action |
Duty owed, duty breached and damages suffered as proximate result of defendants actions |
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Identify two types of Torts for which a person might be held responsible |
Intentional and unintentional |
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Define negligence |
The omission to do something which a reasonable person would do or doing something which a reasonable and prudent person would not do |
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Negligence must be proven. In addition to those elements required to be present in every tort action, two additional elements must also be present to prove the tort of negligence. Explain |
Negligence in performance of duty required to be established (if not shown that was not the behaviour one might expect of a reasonable person) Results of insureds negligent conduct required to be foreseeable ( must be shown that the results of negligent conduct were foreseeable) |
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Define Trespasser |
A trespasser is on the premises without the expressed or implied permission of the occupier. |
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Define “visitor” |
Anyone entering the premises other than a trespasser |
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State the legal duty owed by occupiers to the following persons entering onto their premises: Trespasser, visitor, children |
Trespasser: the law places the lower level of duty on the occupier of the premises for the safety of the trespasser (cannot set traps, intentionally cause harm Visitor: The occupiers liability act replaces the common law duty to take reasonable care to ensure that all visitors are reasonably safe in using the premises Children: The occupier of property must ensure that the premises are safe from any danger whatsoever
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Briefly state the legal precedent for Liability of a landlord in building having multiple tenancy |
Landlords are not responsible for ensuring that a building or land rented to others is fit for the purpose for which it is rented unless: they specifically warrant the fitness for such purpose or they conceal any adverse conditions |
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Briefly state the legal precedent for liability of the tenant to landlord |
They are liable for loss or damage to the building |
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Briefly state the legal precedent for liability of a bailee for customers goods |
They are responsible when the duty of ordinary care is breached because of their negligence |
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Briefly state the legal precedent for Liability of an employer a) for torts if their employees b) for injuries to their employees |
Torts- Employers shall be held liable for the torts of their employees while in the course of their employment Injuries- workers compensation act |
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State the legal precedent for Liability of property owners for Torts of an independent contractor |
Occupiers of property are not liable for the negligence of an independent contractor with whom they have contracted to perform work if it can be shown that: Reasonable care was exercised in the selection of the contractor, and it was reasonable that the work the contractor was engaged to so should have been undertaken |
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State the legal precedent for Liability of owners for injury or damage caused by Domestic and wild animals |
Domestic- No “free first bite.” Owners are deemed liable Wild- strictly liable for injury or damage inflicted |
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Briefly state the legal precedent for Liability of children |
Children are responsible for the injury or damage they cause unless it can be proven they were incapable of understanding the consequences of their actions |
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State the legal position regarding the payment of damages when two or more people are held responsible for a tort |
“Joint tortfeasors” Each one liable for an equal amount |
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define bodily injury |
Physical injury sustained, and associated with external causes |
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Define “ property damage “ |
Unintentional damage to the property of others |
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Define “ third party “ |
Anyone or entity that is not named in the policy |
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Payment only when insured legally liable. Who determines the matter of “legal liability ?” |
The courts |
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Define “occurrence” |
An event which occurs suddenly and unexpectedly or which occurs over a long period of time |
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Explain the purpose of “compensatory damages” |
Those which are intended to compensate the third party (plaintiff) for the injury or damage caused by the insured (defendant) |
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State the duties owed by the insured to the insurer in the event of an occurrence, claim, or action |
Provide them with prompt notification if any occurrence which may lead to a claim or action |
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What is the purpose of “Supplementary Payments?” |
The additional expenses incurred by insurers and insureds in investigating , settling, and defending a claim are provided under this separate insuring agreement |
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Identify four examples of Supplementary payments |
Cost of defence, expenses occurred by the insured at the insurers request to assist in the investigation, court costs, interest from the date the judgment was rendered |
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The liability coverages provided by the Homeowners forms are also designed to be used with other habitational insurance forms. Identify these other forms. |
Homeowners package, Tenants Package form, Condominium Unit owner Form and mobile Homeowners Form |
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The liability coverages provided by the Homeowners forms are also designed to be used with other habitational insurance forms. Identify these other forms. |
Homeowners package, Tenants Package form, Condominium Unit owner Form and mobile Homeowners Form |
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State the four coverage Sections under Section 11 Liability Coverage |
E- Personal Legal Liability F- Voluntary Medical Payments G-Voluntary Payment for Damage to Property H- Voluntary Compensation for Residence Employees |
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The liability coverages provided by the Homeowners forms are also designed to be used with other habitational insurance forms. Identify these other forms. |
Homeowners package, Tenants Package form, Condominium Unit owner Form and mobile Homeowners Form |
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State the four coverage Sections under Section 11 Liability Coverage |
E- Personal Legal Liability F- Voluntary Medical Payments G-Voluntary Payment for Damage to Property H- Voluntary Compensation for Residence Employees |
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Provide a brief summary of the coverage provided by insuring Agreements E-H |
E- Personal liability. Insure the legal liability of insureds in their role as private citizens while anywhere in the world. H- Voluntary Compensation for Residence employees. Covers residence employees with limited benefits should they be injured or die while working for the insured. |
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Discuss the coverage,limitations, and exceptions in respect of liability arising out of the following: owned/non-owned watercraft Owned/non-owned motorized vehicles |
Owned/non-owned watercraft: Coverage automatically provided. Watercraft no more than 12kW in outboard motor, or any other type of motor of not more than 38kW and not more than 8 metres in length Owned/non-owned motorized vehicles: Not more than 19kW |
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The liability coverages provided by the Homeowners Forms are not intended to insure injury or damage arising out of the insureds business activities. State three exceptions |
Slander, malicious prosecution, wrongful entry or eviction, discrimination |
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Identify 3 work-related benefits provided by Workers Compensation plans |
Health care costs, medical or vocational rehabilitation programs, replacement for lost earnings and death benefit |
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Indicate who would purchase an individual Accident and Sickness insurance policy |
Self employed, people without group plans at work, high income employees and people seeking better coverage |
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Define “disability “ (accident and sickness insurance) |
Unable to return to work in any occupation, regular occupation and own occupation. Insured is unable to perform important duties of their regular occupation |
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Define “Elimination period” (accident and sickness insurance) |
The period of self-insurance between the onset of the disability and the commencement of disability benefits |
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Identify 3 types of information about the applicant which are important in determining the premium to be charged. |
Claims costs (age, sex,occupation ), Operating expenses, investment earnings |
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Identify who has insurable interest under an individual contract of Accident and sickness insurance |
Child or grandchild, spouse , employee, any person in whom they have a pecuniary interest and any person upon whom they depend for support or education |
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What is the effect on coverage when such insurable interest is not present |
Contract is voided |
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Summarize the “incontestability” provision |
Statements made on the application form a part of the policy and are incontestable after two years, except for fraudulent statements and misstatement of age |
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Indicate the term(s) of travel accident policies |
Single trip or annual basis. Single covers one specific trip lasting no longer than 180 days. Annual can be purchased covering an unlimited number of trips lasting for up to 30,60,90 or 180 days per trip |
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Indicate the factors used to rate travel accident policies |
Whether it is an individual or family plan, Single or Annual policy, the number of trips, the duration of the trips , area of travel, policy limits , age and health of the individuals |
Indicate the factors used to rate travel accident policies z |
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Indicate who would qualify as a dependent |
Children under the age of 20 (26 if attending an accredited education facility), unmarried, residing with or receiving full support from the applicant |
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Summarize the Pre-existing condition provision |
Coverage does not automatically extend to hospitalization or medical treatment resulted for any illness or injury that existed prior to the commencement of travel |
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Automobile insurance is not the same in all provinces. In some provinces, automobile insurance is provided exclusively by private insurers. In these provinces, unacceptable drivers are referred to the Facility Association. Explain how Facility Associations work. |
All insurers writing automobile liability insurance are members and share in the pooled results. When persons insured are able to qualify for coverage in the marketplace, they are removed from the pool |
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Explain the role of private insurers in provinces having compulsory government automobile insurance plans |
Private insurers are permitted to compete with government plan for excess coverage only |
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Why is the following information requested by the insurer in an application for automobile insurance? Full name and address of applicant |
Driving history and territory the vehicle will be stored |
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Why is the following information requested by the insurer in an application for automobile insurance? Full name and address of applicant |
Driving history and territory the vehicle will be stored |
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Why is the following information requested by the insurer in an application for automobile insurance? Particulars of described automobile |
Different types of vehicles cost more to replace or repair |
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Why is the following information requested by the insurer in an application for automobile insurance? Full name and address of applicant |
Driving history and territory the vehicle will be stored |
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Why is the following information requested by the insurer in an application for automobile insurance? Particulars of described automobile |
Different types of vehicles cost more to replace or repair |
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Why is the following information requested by the insurer in an application for automobile insurance? List of all drivers |
To have all drivers listed on policy and driving history |
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Why is the following information requested by the insurer in an application for automobile insurance? Driver, license and insurance history |
To ensure that insurance is not provided to people with an undesirable driver history |
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Identify three situations where the insureds right to recover under the policy shall be forfeited. (Penalty for False Statement ) |
1. False description of the vehicle 2. Knowingly misrepresents the risk or fails to disclose a required fact 3. Breaches a policy term 4. Commits a fraud 5. False statement in respects of the claim |
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Explain the “priority of payment” rule when a claim is made under Section A- Third Party Liability |
80-90% of the minimum limit required to be carried for third party liability is reserved for bodily injury claims |
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Identify the persons insured under the Section A- Third party liability section |
The named insured and anyone who personally drives the automobile with consent if the insured |
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Identify 3 persons entitled to receive Accident Benefits coverages |
The insured, insureds spouse, dependant family members living with the insured, occupants of the automobile and pedestrians |
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Identify 3 conditions of coverage under Part ll -Loss is income |
Benefits payable on a weekly basis, subject to a 7 day waiting period. Insureds must be able to prove they were employed at the time of the accident, benefits cease at end of 104 weeks |
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Identify those Supplementary payments which the insurer agrees to pay (Auto) |
Medical payments, funeral expenses, |
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Define “uninsured” automobile |
One of which neither the driver nor owner has applicable and collectible bodily injury liability insurance |
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Define “uninsured” automobile |
One of which neither the driver nor owner has applicable and collectible bodily injury liability insurance |
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Define “unidentified automobile “ |
One which causes bodily injury or death to an insured person arising out of actual contact of that automobile with the automobile in which the insured is an occupant |
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Identify four physical damage coverage options available under a policy of automobile insurance |
All perils, collision or upset, comprehensive and specified perils |
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Identify four physical damage coverage options available under a policy of automobile insurance |
All perils, collision or upset, comprehensive and specified perils |
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Provide 3 examples of claims for which the deductible would not be applied |
Fire, lightning, theft of the entire vehicle and in some provinces, collision with wildlife |
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What coverage is provided for damage caused to the automobile when the insured was intoxicated at the time of the accident |
None |
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Briefly discuss the key points of the following statutory conditions : Prohibited Use by Insured/others |
No coverage when insureds allow a member of their household to drive or operate the automobile while such persons license is suspended or while they are prohibited under order of any court from driving an automobile |
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Loss or damage to the Automobile: Describe “Time to file notice and proof of loss” |
Proof of loss must be provided within 90 days of the accident. |
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Loss or damage to automobile: Describe “Obligations upon insured respecting protection of automobile |
Insureds must do what they can to protect the vehicle from future damage or loss after an accident (tow away or repair to move) |
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Loss or damage to automobile: Describe “Obligations upon insured respecting protection of automobile |
Insureds must do what they can to protect the vehicle from future damage or loss after an accident (tow away or repair to move) |
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Loss or damage to the automobile : Describe “Basis of settlement |
Insurer always has the option of making a settlement in the basis of repair or replacement as opposed to the payment of money |
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Loss or damage to the automobile: describe “repair or replacement” |
Except where an appraisal has been made, the insurer , instead of making payment, may repair , rebuild or replace the property damaged or lost if within 7 days after the receipt of the proof of loss, it gives written notice of its intention to do so |
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Loss or damage to the automobile: Describe “disagreement “ |
In case of a disagreement as to the nature and extent of the repairs and replacements required, or as to their inadequacy, or amounts payable , the insurance Act provides that these questions shall be determined by appraisal |
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Auto insurance Statutory conditions: Describe “Time and Manner Of Payment of insurance Money” |
Payment shall be made within 60 days after proof of loss is received by it, or, when an appraisal is made, within 15 days after the award is rendered by the appraisers |
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Briefly summarize the S.E.F No 20 Loss of use endorsement respecting: When coverage applies |
When the damage is such that an automobile can not be operated |
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Briefly summarize the S.E.F No 20 Loss of use endorsement respecting: Expenses insured |
Rental of a substitute automobile or taxicab or public transportation |
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Briefly summarize the S.E.F No 20 Loss of use endorsement respecting: How claims paid |
Coverage limits set to a certain amount per day, with a max limit per occurrence |
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State the purpose of the S.E.F No 27 Legal liability for Damage to Non-Owned Automobiles Endorsement |
Coverage is provided for loss or damage to automobiles not owned by or licensed in the name of the insurer or other persons residing in the same dwelling premises (rental cars) |
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S.E.F No 27- identify 3 important coverage provisions |
Coverage is for the same perils as are insured under Section C, loss of or damage to insured Automobile if the automobile policy. Coverage is restricted to certain types of automobiles. Generally no more than one such automobile may be in an insureds care, custody or control at any one time. Coverage is subject to a max amount in any one occurrence. The automobile is being used with the consent of the owner or lessee |
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State the purpose of the S.E.F No 44 Family Protection Endorsement |
Provides insureds with additional coverage in the event they are injured or killed by an uninsured or under-insured driver. |
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S.E.F No 44- identify 3 persons insured by this endorsement |
The named insured and spouse while residing in the same dwelling premises, and dependent relatives |
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S.E.F No 44- explain how payment would be made when a claim is made |
The difference between Section A- Third party liability limit provided by the insureds automobile policy and the amount of liability insurance carried by the at-fault driver |
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The Insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: Examination result(s) required |
Passing mark varies (must find out BC) |
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The insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: Class of license (types of insurance which can be sold) |
Level 1- all types of general insurance under supervision of level 2 or 3 Level 2- all types of general insurance inside or outside the brokerage premises, but not permitted to own or manage a brokerage Level 3- permitted to sell all types of insurance and qualified to own and manage a brokerage |
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The Insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: Examination result(s) required |
Passing mark varies (must find out BC) |
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The insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: Class of license (types of insurance which can be sold) |
Level 1- all types of general insurance under supervision of level 2 or 3 Level 2- all types of general insurance inside or outside the brokerage premises, but not permitted to own or manage a brokerage Level 3- permitted to sell all types of insurance and qualified to own and manage a brokerage |
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The Insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: License term |
Continuous with annual filing requirement |
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The Insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: Examination result(s) required |
Passing mark varies (must find out BC) |
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The insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: Class of license (types of insurance which can be sold) |
Level 1- all types of general insurance under supervision of level 2 or 3 Level 2- all types of general insurance inside or outside the brokerage premises, but not permitted to own or manage a brokerage Level 3- permitted to sell all types of insurance and qualified to own and manage a brokerage |
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The Insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: License term |
Continuous with annual filing requirement |
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The Insurance Act requires that all persons who sell insurance be licensed. State the rules applicable in your province respecting: License jurisdiction |
Brokers must be licensed in each province in which they do business. |
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Provide three examples of ethical breaches of conduct which can result in the revoking of the brokers license |
Misrepresentation, contravenes any provisions of the Insurance Act or its equivalent, unreasonably fails to pay to an insurer premiums collected and retained beyond the term stipulated in the Agency agreement, places insurance with unlicensed insurers without complying with legislation relating to unlicensed insurers, proves to be incompetent, misuses Trust funds |
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Provide at least one example which indicates the broker 1. Lacks integrity |
Conviction, misappropriating or dealing dishonestly with a clients money, taking improper advantage of a clients inexperience lack of education youth or lack of sophistication, failing to be absolutely frank and candid |
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Provide at least one example which indicates the broker Is incompetent |
When they attempt to act beyond their personal level of competence |
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Provide at least one example which indicates the broker Is providing clients with poor or improper advice |
Giving bold or sweeping general assurances to clients that “everything is covered” when this is not the case, after being terminated - misleading clients about the true reason for re-marketing their coverages on expiry, failing to advise clients of a warranty on a policy without informing them that this is a condition of the coverage being provided. |
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Provide at least one example which indicates the broker |
Is breaching client confidentiality |
Sharing customer information outside of the brokerage |
