CAIB 1 - Chapter 1

The chance of financial loss that an object of insurance is exposed to.

<p>True</p> Signup and view all the answers

<p>An agreement between two or more persons creating an obligation to do or not do something.</p> Signup and view all the answers

<p>5</p> Signup and view all the answers

<p>An applicant must know that if they do not promptly return the policy to the insurer, it is possible that courts might rule that they have accepted the policy.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>The government ensures financial stability and solvency by granting licenses to insurers who meet certain financial standards and continuously monitoring their financial strength and stability through ongoing audits and annual reports.</p> Signup and view all the answers

<p>The Insurance Act in each province requires that fire insurance policies must include certain basic coverages, standard exclusions, statutory conditions, and other legislated requirements.</p> Signup and view all the answers

<p>Standard exclusions remove coverage for specific types of losses that are considered uninsurable or covered by specialized coverages.</p> Signup and view all the answers

<p>The 15 Statutory Conditions are a set of legal provisions that outline the rights, responsibilities, and procedures involved in insurance contracts. They cover various aspects, including misrepresentation, property of others, change of interest, material change, termination, requirements after loss, fraud, who may give notice/proof, salvage, entry/control/abandonment, disagreement of value, when loss is payable, replacement, action, notice, and general conditions.</p> Signup and view all the answers

<p>An honest mistake is a genuine error, while fraud is a deliberate attempt to deceive for personal gain.</p> Signup and view all the answers

<p>The Material Change Condition aims to address any changes in the risk or control of the insured property that occur after the policy is issued and increase the chance of loss.</p> Signup and view all the answers

<p>Contracts can be terminated by either the insurer or the insured. The insurer can terminate the contract by providing a certain amount of notice, either registered mail or personally delivered, or the insured can terminate the contract at any time, with no reason required.</p> Signup and view all the answers

<p>The &quot;Salvage&quot; Condition encourages the insured to take reasonable steps to prevent further damage to the damaged property and minimize potential losses, which can help reduce the insurer's overall financial payout.</p> Signup and view all the answers

<p>The Appraisal Process involves both insured and insurer each selecting an appraiser to assess the property value, with the final decision resting with the umpire, who is chosen by the two appraisers. Both parties must pay their respective appraiser's fees, with costs shared equally.</p> Signup and view all the answers

<p>Direct Writing System</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>The Direct Writing System is characterized by having producers who are employees of the insurer, working exclusively with the insurer's products.</p> Signup and view all the answers

<p>Some prominent examples of direct writers in Canada include Co-operators General Insurance Company, Federated Insurance Company of Canada, Prudential of American General Insurance Co. (Canada), and State Farm.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>The Insurance Bureau of Canada (IBC) plays a vital role in collecting insurance statistics, providing actuarial analysis for members, drafting policy forms, managing inter-company agreements, monitoring legislation, and working closely with government agencies to develop insurance legislation. The organization also focuses on providing consumer information, promoting loss prevention, and operating a consumer phone-in service across Canada.</p> Signup and view all the answers

<p>The &quot;No Benefit to Bailee&quot; condition clarifies that insurance policies are designed to protect the interests of the insured, not any parties who may be holding or transporting the insured property for other purposes, like a carrier or bailee.</p> Signup and view all the answers

<p>The &quot;Pair and Set&quot; condition states that if a part of a set or a paired item is lost or damaged, the insurer is only liable for a reasonable and fair share of the total value of the set, not the entire value, acknowledging that the remaining part still holds value.</p> Signup and view all the answers

<p>A deductible is an amount that the insured must pay out-of-pocket for each covered loss before receiving any reimbursement from the insurer.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>The &quot;Removal Coverage&quot; condition extends coverage to insured property that is removed from its designated location on the policy, primarily for the purpose of preventing further loss or damage. This includes the insured property being moved to a different location, but the insured must notify the insurer if the property is moved for this purpose and exceed seven days.</p> Signup and view all the answers

<p>To recover losses from parties responsible for the loss</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>Notice in insurance contracts typically involves providing written communication, either delivered personally or sent via registered mail, to the insurer's designated office or the insured's last known address. This could involve situations like policy terminations, appraisal requests, or legal actions against the insurer.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>The 15 Statutory Conditions aim to standardize the procedures and legal frameworks for insurance contracts, ensuring fairness, transparency, and clarity in both the responsibilities of the insurer and the insured's rights.</p> Signup and view all the answers

<p>The two main types of private insurers are proprietary insurers, which focus on generating a profit, and non-proprietary insurers, which operate on a non-profit basis.</p> Signup and view all the answers