30 Questions
What happens if the insured wants someone else to do repair work according to the text?
The insured forfeits the insurance
What does the insurer have the option of deciding regarding indemnity delivery?
The method of payment
For which of the following items does a limit apply only when stolen and not when damaged in an explosion?
Computer software
Which statement is NOT true of all risks policies?
Insurance is against all risks of direct loss or damage
Which of the following is included in the Property Coverages of the Homeowners Basic Form?
Dwelling Building, Personal Property and Seasonal Residence.
What is TRUE of the Fine Arts endorsement?
Provided professional packing supplies are used, coverage will not be affected if the insured packs his fine art himself when he moves.
Which type of property damage would not be covered by Voluntary Property Damage in a Homeowners policy?
Intentional damage done by a fourteen year old
In a liability policy, what does coverage generally apply to?
Being found legally liable for bodily injury or property damage
What is a benefit of a written insurance application?
Reduce the risk of inaccuracies when collecting information
Which coverage under the Homeowners policy would apply to the accidental damage caused by the insured's ten-year-old son to a guest's camera?
Contents coverage
Who has insurable interest in the case of a coffee shop damaged by fire?
The coffee distributor who is unable to sell coffee beans to the shop until it re-opens
What are the different types of professional liability insurance coverage?
Errors and omissions, professional liability and directors and officers liability
What is the proximate cause of loss in insurance?
The immediate and effective cause of the loss
Under Comprehensive personal liability, which scenario would likely be covered?
A guest tripping on a loose step in your home and injuring herself
Which of the following best describes the original purpose of insurance companies mentioned in the text?
To provide mutual aid to policyholders
What does a Commercial General Liability policy cover?
Premises and operations liability only
Why do insurance companies have extensive engineering and training facilities?
To ensure better risk assessment and claims handling
What is one duty of a general agent as mentioned in the text?
Appoint other agents in the assigned province(s)
What does the inspection condition under the general conditions for fire policies in Quebec obligate the insurer to do?
Inspect the premises for purposes other than insurance
Which duty is NOT included in the duties of a risk manager?
Acting as an in-house legal counsel
What is a special program approved by government regulators to protect policyholders from the financial collapse of an insurer?
Global Risk Management
What happens if the insured benefits from recovery available due to another party's negligence?
Title to the property transfers to the insurer
What does empathy require according to the text?
Understanding others' feelings and perspectives
In what circumstances does the insurer need a court order to use a recovery from a responsible party?
To subrogate a right to recover from another responsible person
What is the deductible amount under Specified Perils in the policy?
$300
What would Smith's insurer pay for the damage to Brown's automobile if Smith carries Collision on his own automobile?
$0
In the Additional Agreements of the insurer, what situation would lead to the insured reimbursing the insurer?
Insurer having to pay due to a statute relating to automobile insurance
Under Loss of Use due to Theft, when does the reimbursement end?
Upon either (a) or (b) above, whichever comes first
Who would be responsible for an accident if John Smith is driving Robert Brown's automobile as a temporary substitute and causes damage?
John Smith
Which scenario could potentially be covered as a newly acquired vehicle?
Smith purchases a new car and informs the insurer within 30 days
Study Notes
Subrogation
- The insurer is subrogated to the insured's right to recover the same loss from another person who may be legally responsible
- The insurer must obtain a court order to use any recovery from the responsible party to offset the claim paid
- The insured retains the right to benefit from any recovery available because of another party's negligence
Inspection Condition
- The purpose of the inspection condition under the general conditions for fire policies in Quebec is to state that where the insurer makes an inspection, it does not constitute a warranty that the premises are safe or healthful or comply with laws, codes, or standards
Risk Management
- The duties of a risk manager do not include acting as an in-house legal counsel
- A risk manager's duties include identifying loss exposures, educating other corporate managers, and financing loss
Insurance Protection
- A special program approved by government regulators to protect policyholders from the financial collapse of an insurer is the Property and Casualty Insurance Compensation Corporation (PACICC)
- Facility association is not a program to protect policyholders from the financial collapse of an insurer
Empathy
- Empathy requires understanding and sharing the feelings of another
Insurance Claims
- The insurer has the option of deciding how indemnity will be delivered
- The insurer decided on who will do any repair work – if the insured wants someone else, he forfeits the insurance
All Risks Policies
- All risks policies provide insurance against all risks and all types of damage
- The extent of coverage is determined by the exclusions
- Anything that is not specifically excluded is covered
- Insurance is against all risks of direct loss or damage
Homeowners Policy
- The Property Coverages of the Homeowners Basic Form include Dwelling Building, Detached Private Structures, Personal Property, and Additional Living Expense
- The Fine Arts endorsement requires valuations done by qualified experts
- Voluntary property damage would not respond to intentional damage done by a fourteen-year-old
Liability Policy
- A liability policy covers you for causing bodily injury or property damage
- A liability policy does not cover intentional acts
Professional Liability Insurance
- Errors and omissions, professional liability, and directors and officers liability are types of professional liability insurance coverage
Commercial General Liability Policy
- A Commercial General Liability policy covers premises and operations liability
Written Insurance Application
- A written insurance application assists new agents and brokers with accurate note-taking
- A written insurance application helps the insurer decide whether commission is payable
- A written insurance application serves as a checklist for adjusters when settling a claim
- A written insurance application reduces the risk of inaccuracies when collecting information
Insurable Interest
- The bank that holds a mortgage on the building in which the coffee shop is located has an insurable interest
- The coffee distributor who is unable to sell coffee beans to the shop until the shop re-opens does not have an insurable interest
- An employee who can't work at the store for 6 weeks during repairs has an insurable interest
- A customer who has to walk further and pay more for coffee from a different coffee shop does not have an insurable interest
Proximate Cause of Loss
- The proximate cause of loss is the immediate and effective cause of the loss
General Agent
- One of the duties of a general agent is to appoint other agents in the assigned province(s)
Insurance Policy
- The policy shows a $300 deductible under Specified Perils, the insurer would pay $300
- Under Additional Agreements of the insurer, the insurer agrees to pay court costs taxed against the insured and pay interest on the insured portion of judgements for damages against insureds awardee to plaintiffs
- The insured will reimburse the insurer for any amounts the insurer has to pay because of a statue relating to automobile insurance that the insurer would not otherwise be liable to pay under the policy
Test your knowledge on which section of a Homeowners policy will provide coverage for property damage scenarios involving children. Explore different scenarios and understand the coverage options available under a Homeowners policy.
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