Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
69 Cards in this Set
- Front
- Back
|
Define: Risk |
The chance of loss. Specifically, the possible loss or destruction of property or the possible incurring of a liability. Sometimes referred to as the subject of an insurance contract |
|
|
Define: Peril |
Apparel is an event that may cause injury, loss, or destruction. It may be a natural or a human made event. Apparel may or may not be insurable |
|
|
Define: Named-perils policy |
A policy in which the perils ensured against our listed, as opposed to one that inspires against "all risks" |
|
|
Define: All-risks policy |
A name given to an insurance policy that covers each and every loss except for those that are specifically excluded. If not sure does not exclude it, then it's automatically covered. This is the broadest type of policy that can be purchased |
|
|
Define: Specified perils |
Peril's insured against that are specifically named in a policy; losses resulting from The perils listed are covered under the policy. This is the flip side of all-risks coverage, where losses resulting from The perils listed are excluded |
|
|
Compare and contrast named perils and all risks: |
Named perils insures against - direct physical loss or damage - caused by only the listed perils All risks insures against - direct physical loss or damage - caused by any peril - provided that the peril is not excluded and that - the insured satisfies the other conditions of the policy ----- Named perils onus is on the insured - to prove loss or damage was caused by an insured peril and that - no exclusion of coverage applies All risks onus is on the insured - to prove that loss or damage to ensured property at an insured location occurred during the policy term and that - the loss was fortuitous --- All risks onus is on the insurer - to prove that an exclusion applies - otherwise, the physical damage is insured |
|
|
What are the two types of exclusions on a policy? |
- The types of property that are not insured - The perils that are never insured against or sometimes not insured against |
|
|
What are the named perils in IBC habitational forms (14)? |
- fire - lightning - explosion - smoke - falling object - impact by aircraft or land vehicle - riot - vandalism or malicious acts - water damage windstorm or hail - glass breakage - transportation - windstorm or hail- glass breakage- transportation- theft, including damage caused by attempted theft- electricity - theft, including damage caused by attempted theft - electricity |
|
|
Define: Fire |
Combustion manifested in light, flame, and heat for useful purposes (friendly fire) or destructive purposes (hostile fire) |
|
|
Describe the named peril: Fire |
Fire includes any uncontrolled or unintentional ignition, howsoever caused. By provincial statute, a fire insurance policy may only exclude fire if it results from: - property undergoing a heat process - riot, civil commotion, war, invasion, active for an enemy, hostilities, civil war, rebellion, revolution, insurrection, or military power - a collection of perils often called war risks - radioactive contamination |
|
|
Describe the named peril: Lightning |
A fire insurance policy must cover loss due to lightning, but loss to electrical devices or appliances caused by lightning or other electrical currents is not covered unless the fire originates outside the article itself - and then only lost caused by that fire is covered |
|
|
Describe the named peril: Explosion |
Explosion of natural, coal, or manufactured gas in a building not forming part of a gas works, whether fire ensues or not Does not apply if a result of riot, civil commotion, or any other excluded causes listed for the fire peril Explosion excludes water hammer |
|
|
Describe the named peril: Smoke |
Smoke means smoke due to a sudden, unusual, and faulty operation of any heating or cooking unit in or on the premises but not smoke from fireplaces |
|
|
Describe the named peril: Falling object |
Falling object means any falling object that strikes the exterior of the building: for example, a tree blowing down during a storm and striking the building, causing damage to the building and property inside Also includes a strike by meteorite or by any object ejected from an aircraft or from part of a decayed satellite |
|
|
Describe the named peril: Impact by Aircraft or Land Vehicle |
Impact means loss of or damage to insured property caused by being struck by an aircraft or a land vehicle. Animals are not covered under this peril This peril excludes lost caused by any vehicle owned or operated by the insured or any of the insurance employees |
|
|
Describe the named peril: Riot |
Riot is not defined but has a precise legal meaning, which can be briefly stated as: - an act or threat of violence by one or more persons who are part of an assembly of three or more persons - that might give rise to damage to property or injury to persons |
|
|
Describe the named peril: Vandalism or Malicious Acts |
Vandalism means willful or malicious destruction of or damage to property. Examples of vandalism include graffiti, breaking windows, cutting off power, and deliberately plugging a sink and turning water on The IBC named perils form specifically excludes vandalism or malicious Acts - occurring while the building is under construction, even if a builder's risk endorsement has been issued - occurring while the building is vacant, even if a vacancy permit has been issued - perpetrated by any insured - Caused by theft or attempted theft |
|
|
Describe the named peril: Water Damage |
In the IBC named perils forms, water damage encompasses loss of or damaged to insured property caused by only the following four scenarios: 1. sudden and accidental escape of water from a water main 2. sudden an accidental escape of water or steam from within a plumbing, heating, sprinkler, or air conditioning system or domestic water container located within the dwelling - excluding such loss within any unheated portion of the dwelling or caused by freezing in the heated portion of the dwelling if the insured has been away from more than 4 days unless the insured has either shut off and drained all the pipes and domestic water containers or arranged for a competent person to inspect the dwelling daily to ensure that the heat is still on 3. Sudden and accidental escape of water from a domestic water container located outside the dwelling - freezing is specifically excluded 4. Entrance of water through an arbiter caused concurrently with another insured peril |
|
|
Define: Personal property |
Legally, any property of an insured other than real property. More often used to refer to the personal property of family members insured under a homeowner's policy |
|
|
Define: Real property |
Land and any property that is tangible and usually fixed or attached to the land |
|
|
Describe the named peril: Windstorm or Hail |
In the IBC named perils forms, neither Windstorm nor hail is defined; instead, the scope of the peril is established by exclusions. Windstorm includes tornadoes and hurricanes, but the wind storm or hail peril does not include loss or damage caused by waves, floods, or the weight, pressure, or melting of ice or snow Outdoor antennae and satellite receivers are not insured property with respect to the peril of wind storm or hail |
|
|
Describe the named peril: Glass Breakage |
Glass breakage means accidental breakage of the building glass or doors however caused, unless the breakage results from an excluded peril The IBC named perils forms specifically exclude glass breakage - occurring while the building is under construction, even if a builder's risk endorsement has been issued - occurring while the building is vacant, even if a vacancy permit has been issued |
|
|
Describe the named peril: Transportation |
The transportation peril encompasses loss of or damage to insured personal property caused during the transportation of the property by collision of the automobile transporting the property Other perils that may occur to the automobile or trailer conveying the property include upset, overturned, derailment, stranding, or sinking The transportation peril also extends to personal property that is temporarily removed from the premises, as well as to building fixtures and fittings that are temporarily removed from the premises for seasonal storage |
|
|
Describe the named peril: Theft, Including Damage Caused by Attempted Theft |
The theft apparel does not include loss or damage - occurring at any other dwelling or detached private structure which the insured owns or rents, or occupies, unless the insured is temporarily living there - from the part of the dwelling or detached private structure rented to others caused by theft or attempted theft, by any tenant, tenants employee, or member of the tenants household - caused by theft or attempted theft, of property or building materials from any dwelling or the detached private structure under construction until the dwelling is completed and ready for occupancy - to animals, birds, or fish - caused by voluntary partying of property via false pretense |
|
|
Define: Theft |
The wrongful taking of the property of another. It is a broad term and includes larceny, pilferring, hold up, robbery, and pickpocketing |
|
|
Describe the named peril: Electricity |
Electricity means sudden and accidental damage from artificially generated electrical current. The most common example is a power surge of artificially generated electricity that causes damage to electrical appliances and. The damage must be sudden and accidental rather than, for example, a burnout due to wear and tear during the normal use of an electrical appliance |
|
|
What are the non-standardized perils commonly assured against under all risks property insurance (12)? |
- Wildfire - hurricane - tornado - collapse - accidental breakage of property - Earth movement - sewer backup - sump pump failure - flood - ice damming - water seepage - mold and wood rot |
|
|
Describe the non-standard peril: Wildfire |
Wildfire is an uncontrollable or destructive fire especially in a forest Wildfire falls within the fire peril insured against under a property policy. Thus, it is covered whether the property is insured against named perils or all risks |
|
|
Describe the non-standard peril: Hurricane |
Hurricanes fall within the wind storm or hail peril |
|
|
Describe the non-standard peril: Tornado |
Tornadoes fall within the wind storm or hail peril |
|
|
Describe the non-standard peril: Collapse |
Collapse is not one of the named perils so not covered under a named perils form. A common scenario is the collapse of roof due to snow load. |
|
|
Describe the non-standard peril: Accidental Breakage of Property |
No coverage for this under a named perils form.
Under an all risk form, coverage is excluded in the following instances: - for breakage of fragile or brittle articles in less caused by a specified peril, accident to a land vehicle, watercraft, or aircraft, or theft or attempted theft - too personal property undergoing any process or while being worked on, where the damage results from such process or work, but resulting damage to other property is insured
|
|
|
Define: Earth movement |
A general term that includes earthquake, landslide, snow slide, and volcanic eruption, among other phenomena |
|
|
Describe the non-standard peril: Earth movement |
All of these perils are excluded but lost or damage due to fire that results from Earth movement is covered. Possible to add these coverages on by endorsement |
|
|
Describe the non-standard peril: Sewer backup |
Damage caused by the backing up or escape of water from a sewer or septic tank is excluded. Coverage can be added by endorsement |
|
|
Describe the non-standard peril: Sump pump failure |
Damage caused by the backing up or escape of water from a sump system or by groundwater or the rising of the water table is excluded Coverage may be added by endorsement |
|
|
Describe the non-standard peril: Flood |
Flood means waves, tides, tidal waves, tsunami, dam breaks, seiche, or the rising, the breaking out, or the overflow of any body of water or water course, whether natural or human-made. This coverage is excluded Coverage can be added via endorsement |
|
|
Define: Fluvial flooding |
The overflow of a river |
|
|
Define: Pluvial flooding |
Flooding caused by rain |
|
|
Describe the non-standard peril: Ice damming |
Ice damming is the accumulation of snow or ice on the roof or eavestrough. Excluded Can be added via endorsement |
|
|
Describe the non-standard peril: Water seepage |
Damage caused by a continuous or repeated seepage or leakage of water is excluded. |
|
|
Describe the non-standard peril: Mould and wood rot |
Damage caused by rust or corrosion, wet or dry rot, and fungi, spores, or mould is excluded. |
|
|
Define: Hazard |
1. A risk or probability that the event insured against might occur 2. A condition that engenders or increases the chances of a loss |
|
|
Define: physical hazard |
A hazard arising from the physical condition or characteristics of the object that is insured For example, it's construction type, whether it is protected by a fire department or a burglar alarm, or whether it is located in a high crime area |
|
|
Define: Moral hazard |
A hazard arising from the character, interest, habits, and lack of integrity of the insured or person concerned An attitude of the owner of the property to be insured, a possible willingness to try to profit from the property policy by bringing loss on him or herself, or being less diligent and trying to avoid it |
|
|
What are the key peril hazards(6)? |
- fire hazard - lightning hazard - water periks hazards - wind or hail hazard - roof collapse hazard - earthquake hazard |
|
|
What are the key condition hazards? |
- fuel oil hazard - concentration of values hazard - collections hazard - hoarding hazard - vacancy hazard - age hazard - theft hazard - neighborhood hazard - unusual hazards |
|
|
Key peril hazard - Fire |
The key is to keep the ignition sources safe and prevent fire from breaking out of the area intended for it Adequate and functional smoke detectors are essential to discovering fire in its incipient stage, when it can be extinguished before it becomes serious. |
|
|
What are some common domestic fire hazards? |
The following are some common domestic fire. If they cannot be eliminated, then they should be controlled or reduced as much as possible- cooking hazards - you should be minimized by keeping the cooking area clean and uncluttered, with all combustibles removed.- unattended portable heaters - these can overheat; they can also malfunction if they are knocked over. - clothes dryer lint - most dwellings have clothes washers and dryers; it is essential that the dryer be properly vented and the lint trap be cleaned after every use - overloaded electrical circuits - circuit breakers that trip or fuses that blow are a sign of either a malfunctioning appliance or an overloaded circuit - faulty or old, outdated wiring - arcing from worn insulation or a loose connection is another possible ignition source - unattended candles - these cause unnecessary tragedies around the country every year. A naked flame must never be left unattended. - wood fireplaces and wood stoves - adequate clearance of the chimney from combustible installation and wood framing is required by fire codes, so fireplaces and stoves require professional installation - careless smoking and children playing with matches |
|
|
What are the two basic categories of Fire Protection? |
- public Fire Protection (such as the local fire department) - private Fire Protection - this includes smoke alarms, fire extinguishers, and sprinklers |
|
|
Key peril hazard - lightning |
If the insured property is the tallest structure around, then it is prudent to equip it with lightning rods and grounding wires, as is common practice for farm houses in otherwise flat fields. |
|
|
Key peril hazard - water damage |
The more domestic water containers the dwelling has, the greater it's exposure to water damage. |
|
|
Key peril hazard - flood |
Flood plains are easy to build on because they are level and the soil conditions make it easy to excavate a basement. The problem is that, with more frequent and severe weather events, coastal properties can experience Storm surges and properties constructed on a floodplain are prone to more frequent flooding |
|
|
Key peril hazard - sewer backup |
Properties with a basement are much more exposed to sewer backup than those without a basement Properties at a lower elevation haven't even greater exposure than those higher up Areas with a history of sewer backup are likely to see more of it unless municipalities take steps to help prevent it |
|
|
Key peril hazard - sump pump |
Properties with a basement close to or below the water table face damage from groundwater if the sump pump fails or is turned off. |
|
|
Key peril hazard - ice damming |
I've damming occurs when snow that has melted on the roof during a thaw, then freezes again at night, clogging the eavestrough downspouts and eventually the eavestroughs themselves. Subsequent thawing causes melted snow to run from the roof down into the clogged Eavestroughs with no other means of egress. It can back up under the shingles. Water than penetrates under the shingles, and into the structure causing water damage to contents and structural damage to the roof and building itself |
|
|
Key peril hazard - wind or hail |
Certain types of roof covering are more susceptible to lifting from wind events or damage from hail events and thus represent an increase exposure, especially as they age |
|
|
Key peril hazard - roof collapse hazard |
This exposure is increased for flat and low peaked roofs where the snow is allowed to accumulate. |
|
|
Key peril hazard - earthquake - shockwaves |
the damage from an earthquake can affect a very large area. The exposure to damage from shock waves during an earthquake increases with proximity to an extreme or high earthquake zone. But there are other important factors that can make the exposure even greater - the underlying geology of the insureds premises - the method of construction - the age of the structure - the height of the structure |
|
|
Define: Conflagration |
1. A fire involving two or more risks or extending over a wide area 2. Any unusually large fire |
|
|
Fuel oil hazard |
Dwellings that are heated by fuel oil pose additional exposure: -external fuel tanks are exposed to theft, vandalism, and impact that can lead to an oil leak - if there is a fire, then the oil represents a fuel source, and the tank could explode - oil can be spilled during filling by the delivery truck; it can be spilled if the tank is overfilled and overflows; and it can leak from faulty connections or a rusty tank. Oil spills are extremely expensive to clean up |
|
|
Define: Sublimit |
A limitation in an insurance policy on the amount of coverage available to cover a specific type of loss |
|
|
Concentration of values hazard |
Since the insurer has no way of knowing what personal property the insured has, the property policy does limit the insurers exposure with maximum limits, called sublimits, on certain types of property (furs, jewelry, coin collections, sports card collections, etc) |
|
|
Collections hazard |
The property policy has sublimits on certain types of property. But there are many other types of collection that are not restricted. For example, the value of the homeowner attaches to the following collections could differ from the value of claims adjuster would attach to them: - records - snow globes from around the world - beer cans from around the world - thimbles and teaspoons - stuffed animals |
|
|
Hoarding hazard |
People sometimes accumulate large amounts of property of certain types to which they feel some attachment or that they feel could become useful to them. Such accumulations can be significant sources of fuel in the event of a fire, as well as obstacles to firefighters as they try to move about the dwelling. |
|
|
Vacancy hazard |
Premises that are clearly not occupied each day invite other problems like vandalism, that, and potentially arson Any absence longer than four consecutive days requires either that the water system and water containers be drained or that arrangements be made for a competent person to enter the dwelling daily. |
|
|
Age hazard |
Buildings need maintenance. Building systems need to be maintained and, when they are past their design lives, replaced - roof waterproofing material - domestic water containers - the plumbing system must be properly maintained - wiring must be properly maintained - the furnace must be properly maintained and replaced once it has reached its design life - food freezers must be properly maintained and replaced once they have reached their design lives. The building structure itself must be maintained: - what services must be painted to prevent wood rot and water penetration - window frames must be replaced if rotten - damage from impacts must be repaired - damaged load-bearing members must be replaced - insect infestations must be eliminated and damaged structural members replaced - graffiti and vandalism must be removed |
|
|
Theft hazard |
The exposure to theft increases with other hazards: - vacancy - neighborhood - police protection - luxury items - children - physical protection |
|
|
Neighborhood hazard |
The proximity of dwellings to each other increases the exposure to spread of fire and damage by explosion. In order of increasing exposure: - detached dwellings - closely spaced detached dwellings - semi-detached dwellings - presence of basement apartment in dwelling - townhomes - apartments
The proximity of the dwelling to other hazards also increases the exposure to loss: - a river increases flood exposure - a road increases exposure to damage by vehicle impact - a railroad increases exposure to damage by vehicle impact, as well as explosion due to derailment - an airport runway increases exposure to damage by aircraft impact - factories increase exposure to damage by fire and explosion, depending on the type of factory - other commercial ventures may increase exposure to theft or vandalism or malicious Acts
The quality of public fire protection will increase or decrease the fire exposure
Local law enforcement and the visible presence of police patrols help to deter theft. |
