|
 How is the rate of premium calculated for fire insurance policies? | it is commonly expressed as a rate per $100 of the amount of insurance or percentage. |
| How has public fire protection changed premiums charged to insureds? | larger cities with more sophisticated water networks lowers the chance of a complete destruction of building by fire.
|
| How does the construction of a building affect the premium charged to insureds? | buildings made with highly combustible materials attract a higher rating. |
| Describe the four different ways a deductible may be applied. | it may be applied separately, on occurrence basis, above a threshold or a variation of a threshold |
| What is the purpose of coinsurance? | it obligates the insured to maintain a specified minimum of insurance in relation to the value of the property insured or else share in a partial loss. |
| Describe the coinsurance formula. | amount of insurance carried/minimum amount of insurance required * amount of loss = amount recoverable by insured |
| Why is it important for insureds to consider the effect of inflation on property values when deciding how much insurance to buy? | if inflation increases their home prices and they do not increase their insurance, then they may be uninsured and face a coinsurance penalty at the time of partial loss. |
| Why do property policies often include a Waiver of Coinsurance for small losses? | in small losses, it is not economical to calculate the actual cash value to determine if a coinsurance clause applies. waiver normally waives coinsurance clause for losses less than 2% or $5000. |
| What is the difference between the Stated Amount Coinsurance clause and the standard Coinsurance clause? | the minimum amount of insurance is specified in dollars rather than as a percentage of actual cash value insured. |
| When does the Stated Amount clause usually expire, relative to the policy? Why? | it expires 3 months after the policy expires. this allows time to confirm values for the renewal term. |
| Describe the circumstances in which an Average Distribution clause might replace a Coinsurance clause. | in instances of manufacturing or processing, the contents of each building is hard to determine. average distribution covers the building under a blanket basis. |
| How does a Deferred Payment clause affect an insured in the case of loss of a building? | the insured is only partially indemnified until the building is fully repaired. then the rest of the loss payment is given. |
| What is the difference between a mortgage and a chattel mortgage? | when the security is real property, the loan arrangement is called a mortgage. when the security is personal property, it is called chattel mortgage. |
| Define loss payee. | mortgagees are considered loss payees. cheques issued in a loss are drawn jointly in the names of the insured and the loss payee. |
| How does provincial legislation protect the interests of loss payees? | the insurer may not cancel or alter a policy without a notice to the loss payee. |
| What is the main benefit of a Mortgage clause for the mortgagee? | it covers the mortgagee even if the named insured is unable to recover due to a breach of contract. a separate contract between the insurer and mortgagee is made. |
| How does the Mortgage clause amend Statutory Condition 8 in the common law provinces? | it gives the mortgagee the right to give notice of loss to the insurer |
| Describe the evolution of the wording of Mortgage clauses. | many different wordings on mortgage clauses. the IBC created a mortgage clause which was accepted by almost all lending institutions. This clause is standard today. |
No comments:
Post a Comment