COP 101 FUNDAMENTALS OF INSURANCE

EXAM STUDY GIUDE ACTUAL EXAM

QUESTIONS AND ANSWERS WITH
RATIONALES ACCURATELY PREDICTED |
LATEST UPDATED 2024
RISK
IS THE CHANCE OF FINANCIAL LOSS

PERIL

IS THE CAISE OF FINANCIAL LOSS FOR EXAMPLE- FIRE WATER AND EARTHQUAKE

WHAT IS THE MAIN PURPOSE OF INSURANCE

IS TO ALLOW THE SPREAD OF RISK

INDEMNITY

MEANS RESTORING THE INSUREDS TO THE SAM FINANCIAL POSITION AS THEY

WERE IN IMMEDIATELY PRIOR TO THE LOSS.

WHOSE OPTION IS TO OF HOW THEY WANT TO SETTLE A CLAIM?

THE INSURER

INSURANCE INDEMNIFIES

FUTURE AND ACCIDENTAL LOSSES ONLY, NOT THE PLANNED LOSSES

DIRECT WRITERS

IN THIS METHOD PRODUCERS ARE EMPLOYEES OF THE INSURER. THEY ARE PAID
REMUNERIATION BY THE WAY OF SALARY. INSURER OWNS CUSTOMER FILES

INDEPENDANT BROKERAGES

THEY ARE SELF EMPLOYED, THEY ARE NOT EMPLOYEES OF THE INSURANCE
COMPANY THEY REPRESENT. THEY ARE PAID COMMISSION. THE CUSTOMER FILES
ARE OWNED BY THE BROKERAGE

PURE RISK
THERE IS ONY A CHANDE OF FINANCIAL LOSS WITH NO CHANCE OF PROFITING
FROM IT FOR EXAMPLE, FIRE LOSS

SPECULATIVE RISK

THERE IS A CHANCE OF FINANCIAL LOSS AS WEL AS A CHANCE OF FINANCIAL

GAIN

WHAT ARE THE 4 WAYS OF LIVING WITH RISK

AVOIDANCE OF RISK- ACTING LIKE ITS NOT THERE

CONTROLLING OF RISK- GETTING THINGS INSTALLED TO LESSON THE RISK
RETENTION OF RISK- SAVING MONEY TO DEAL WITH RISKS AS THEY COME
TRANSFER OF RISK- PURCHASING INSURANCE

CONTRACT

IS A LEGAL PROMISE MADE BY TWO OR MORE PARTIES WHICH CAN BE

ENFORCED THROUGH THE COURT OF LAW

WHAT ARE THE FIVE ELEMENT OF A CONTRACT

AGREEMENT
CONSIDERATION
LEGALITY OF OBJECT
LEGAL CAPACITY OF PARTIES
GENUINE INTENTION

THE AGREEMENT OF AN INSURANCE CONTRACT

WHEN BOTH PARTIES AGREE ON PARTICULAR POINT

CONSIDERATION OF AN INSURANCE CONTRACT
AN EXCHANGE OF SOMETHING OF VALUE BETWEEN THE PARTIES TO A
CONTRACT
LEGALITY OF OBJECT

FOR WHICH A CONTRACT IS WRITTEN SHOULD BE LEGAL OBJECT

LEGAL CAPACITY OF PARTIES

ALL PARTIES TO CONTRACT SHOULD HAVE LEGAL CAPACITY TO ENTER INTO A

CONTRACT

GENUINE INTENTION
NO INFLUENCE OR VIOLENCE IS USED ON EITHER PARTY TO ENTER INTO A
CONTRACT

BINDER

THE BROKER HAS COMMITTED AN INSURER TO A CONTRACT OF INSURANCE ON

ANY RISK

ENDORSEMENT

IT MEANS TO CHANGE THE TERMS AND CONDITIONS OF AN EXISTING

INSURANCE POLICY

RIDER

THE COVERAGE OF AN ADDITIONAL PERIL OVER AND ABOVE THE EXISTING

PERILS COVERED IN THE POLICY

WHAT DOES THE FEDERAL GOVERNMENT DO

IT MONITORS THE FINANCIAL HEALTH OF FEDERALLY LICENSED INSURERS

WHAT DOES INSOLVENT MEAN

THOSE WHO ARE NOT ABLE TO PAY ALL INSURED LOSSES

WHAT DOES SOLVENT MEAN

THOSE WHO ARE ABLE TO PAY ALL INSURED LOSSES

WHAT HAPPENS WHNE AN INSURED BECOMES INSOLVENT

THE PROPERTY AND CAUSALITY INSURANCE COMPENSATION CORPORATION

TAKES OVER THE BUSINESS AND PAYS THE LOSSES

WHAT DOES THE PROVINCIAL GOVERNMENT DO

THRY APPROVE THE CONTENT OF INSURANCE CONTRACTS

IT LICENSES THE INSURERS OPERATING WITHIN THE PROVINCE INCLUDING
FEDERALLY LICENSED INSURER
IT ALSO MONITORS THE FINANCIAL HEALTH OF THE INSURERS WHICH OPERATE
IN THE PROVINCE ONLY
WHAT IS A FIDUCIARY

SOMEONE THATNHANDELS SOMEONE ELSES MONEY

WHO ARE FIDUCIARIES

INSURERS AND BROKERS

WHY SHOULD BROKER NOT USED UNEARNED COMMISSIONS

SO THAT IT IS AVAILABLE IN THE TRUST ACCOUNT TO BE REFUNDED TO THE

CLIENT IN CASE THE POLICY IS CANCELLED

WHO HAS THE AUTHRITY TO MAKE ALTERATIONS TO THE POLICY

A PERSON WHO IS AUTHORIZED BY THE INSURER, BROKERS ARE GENERALLY

NOT AUTHORIZED

WHAT IS THE REMOVAL CLAUSE

WHEN A PROPERTY IS REMOVED TO AN UNNAMED LOCATION TO PROTECT IF

FROM DAMAGE OR FROM FURTHER DAMAGE IS COVERED UP TO 7 DAYS OR FOR
THE REMAINDER OF THE POLICY, WHICH EVER ONE IS SHORTER
WHEN DOES AN INSURANCE POLICY TAKE EFFECT

AN INSURANCE POLICY STARTS AT 1201AM STANDARD TIME AT THE ADDRESS OF

THE NAMED INUSRED AS STATED HEREIN.

WHAT IS SUBROGATION

WHEN THE INUSRERS CAN SUE THE PARTY RESPONSIBLE FOR THE LOSS OF THEIR
CLIENT TO RECOVER MONEY AFTER PAYING THE CLAIM.

WHAT IS SUBROGATION LIKE?

ITS LIKE PUTTING SOMEONE IN ANOTHER PERSONS SHOES

EFFECT OF A DELIVERY OF AN INSURANCE POLICY

THE INSURED IS ELIGIBLE FOR A CLAIM IF THE DOCUMENTS HAVE BEEN
DELIVERED TO HIM OR HER EVEN IF NO PAYMENT HAS BEEN MADE.
WHAT ARE THE TWO TYOES OF FIRE

FRIENDLY FIRE AND HOSTILE FIRE

WHAT IS FRIENDLY FIRE

WHEN A FIRE STAYS WHERE IT BELONGS, IT IS CALLED FRIENDLY FIRE

WHAT IS HOSTILE FIRE

WHEN A FIRE ESCAPES THE PLACE WHERE IT BELONGS AND STARTS BURNING
OUTSIDE, ITS CALLED A HOSTILE FIRE

WHAT ARE THE THREE THINGS A FIRE POLICY MUST COVER

FIRE ITSELF, LIGHTNING, EXPLOSION OF NATURAL COAL OR MANUFACTURED
GASES.

WHAT ARE THE STATUTORY CONDITIONS

THE 15 CONDITIONS IN THE INSURANCE ACT THE APPLY TO ALL FIRE POLICIES
EVEN IF THERE ARE NOT WRITTEN ON THE POLICY, REQUIRED BY THE
PROVINCIAL GOVERNEMENT. THE CONDITIONS CAN NOT BE AMENDED

WHAT IS MISREPRESENTATION

MISREPRESENTATION IS A STATUTORY CONDITION, IT MEANS MAKING THE

INSURANCE COMPANY BELIEVE THAT THE RISK IS BETTER THAN IT ACTUALLY IS.
IF A LOSS OCCURS THAT WAS DIRECTLY CAUSED BY THE MISREPRESENTATION
THE INSURER HAS THE RIGHT TO VOID THE CONTRACT.

OTHERS PROPERTY IN REGARDS TO STATUTORY CONDITIONS

THE INSURER IS REQUIRED TO COVER THE DAMAGE TO ITS CLIENTS PROPERTY

CHANGE IN INTEREST IN REGARDS TO STATUTORY CONDITIONS

POLICY CAN CONTINUE IF THE OWNERSHIP CHANGED MIS TERM, NO CONSENT

ON THE INSURER IS REQUIRED IF THE OWNERSHIP CHANGES DUE TO DEATH.
HOWEVER IS THE POLICY IS SOLD, THE POLICY CAN CONTINUE WITH THE
CONSENT OF THE INSURER.

MATERIAL CHANGE IS REGARDS TO STAUTORU CONDITIONS

MATERIAL CHANGE IS SOMETHING THAT GREATLY INCREASES THE CHANCES OF
SOME RISKS
WHEN CAN THE INSURER TERMINATE
15 DAYS NOTICE BY REGISTERED MAIL OR 5 DAYS NOTICE IN WRITING IF
PERSONALLY DELIVERED. REFUND IS CALCULATED ON A PRORARA NO
CHARGING BASIS

REQUIREMENTS AFTER LOSS

TO GIVE FORTHWITH NOTICE OF LOSS TO THE INSURER IN WRITING, HAND OVER
THE PROOF OF LOSS TO THE INSURER AS SOON AS POSSIBLE

WHO MAY PROVIDE NOTICE AND PROOF OF LOSS

WHEN THE INSURED IS ABSENT OR IS NOT ABLE TO GOVE NOTICE OF PROOF OF
LOSS, OTHERS MAY DO IT ON HIS BEHALF. IS THE INUSERED IS NO INTERESTED IN
MAKING A CLAIM, MORTGAGEES OR OTHER LOSS PAYABLES MAY MAKE A CLAIM.
WHAT IS SALVAGE

IS THE REMAINS OF THE ASSETS AFTER THE OCCURRENCE

ENTRY CONTROL AND ABANDONMENT IN REGARDS TO STATUTORY

CONDITIONS

IT IS THE RIGHT OF THE INSURER TO ENTER THE INUSRES PROPERTY AFTER

THERE HAS BEEN DAMAGE. CONTROL OF DAMAGED PROPERTY WILL CONTINUE
WITH THE INSURED. THE PROPERTY CAN NOT BE ABANDONED BY THE INSURED

APPRAISAL IS

IT IS ESTIMATE OF LOSS MADE BY AN EXPERT APPRAISER, APPRAISAL IS

REQUIRED WHEN THERE IS A DISAGREEMENT BETWEEN INSURER AND THE
INSURED AS TO THE AMOUNT OF LOSS.

WHEN IS THE LOSS PAYABLE

INSURER MUST PAY THE CLAIM TO THE INSURED WITHIN 60 DAYS OF PROOF OF
LOSS BEING SUBMITTED BY THE INSURED

REPLACEMENT IN REGARDS TO STATUTORY CONDITIONS

IT IS THE OPTION OF THE INSURER TO PAY CLAIM AS THE SUM OF MONEY OR

REPAIR OR REPLACE THE DAMAGED PROPERTY. IF THEY OPT TO REPAIR OR
REPLACE COMMUNICATION TO THE INSURER IN WRITING WITHIN 30 DAYS

HOW LONG AFTER THE DATE OF LOSS DOES THE INUSRED HAVE TO TAKE
ACTION AGAIN THE AT FAULT PARTY

ON YEAR

WHO SHOULD THE INUSRED SEND THE PRROF OF LOSS TO

THE INUSRED SHOUD SEND NOTICE TO THE HEAD OFFICE OF THE INUSRER AND
THE INUSRER SHOULD SEND NOTICE TO THE LAST KNOW ADDRESS OF THE
INUSRED

WHAT ARE BROKERS AND AGENTS

NOT A PARTY TO THE INUSRANCE OCNTRACT. THEY WORK AS A MIDDLE MAN

BETWEEN THE INSURER AND THE INUSRED

DUTUES OF THE BROKER/AGENT

PROVIDE ALL IMPORTANT INFORMATION AND THE INUSRED TO THE INSURER,

AND PROPERLY IDENTIFY CLIENTS LOSS EXPOSURE AND PROVIDE RIGHT ADVICE
MORE THAN 50%OF ERROR AND OMISSION CLAIMS ARE DUE TO

INADEQUATE COVERAGE

UNDERWRITERS ARE EMPLOYED BY WHO?

INSURER
WHAT ARE UNDERWRITERS PRIMARY FUNCTION

SELECT THE RISK THAT ARE MOST LIKELY TO BE PROFITABLE TO THE INUSER

UNDERWRITERS MAY REQUIRE THIS BEFORE DECIDING TO INSURE A RISK,

AND TO IDENTIFY HAZARDS IN A RISK

INSPECTION
WHO DOES THE INSPECTIONS FOR UNDERWRITERS

IAO- INSURED ADVISORY ORGANIZATION

HAZARDS CAUSE WHAT TO OCCUR

FOR A PERIL TO OCCUR.

WHAT ARE THE TWO TYPES OF HAZARDS

PHYSICAL AND MORAL HAZARD

WHAT IS A MORAL HAZARD

THESE RELATE TO THE APPLICANT, EXAMPLE- POOR FINANCIAL CONDITION,

INDIFFERENT ATTITUDE AND PROIR CLAIMS HISTORY

WHAT IS A PHYSICAL HAZARD

THOSE RELATE TO TE CONDITION OF THE PROPERTY, EXAMPLE CONSTRUCTION,

LOOSE WIRING, SMOKING, MATERIAL

FOR PROPERTY POLICIES, NAMED/SPECIFIED PERILS

COVERAGE IS PNLY FOR THOSE PERILS WHICH ARE IDENTIFIED. THOSE PERILS
WHICH ARE NOT SPECIFICALLY IDENTIFUED WILL NOTE BE COVERED

ALL RISK BROAD FORM FOR PROPERTY POLICIES

COVERAGE IS PROVIDED FOR ALL RISKS OF DIRECT PHYSICAL LOSS OR DAMAGE

SUBJECTED TO THE POLICIES CONDITIONS AND EXCLUSIONS

WHAT IS DIRECT PHYSICAL LOSS

DAMAGE CAUSED DIRECTLY BY THE INSURED PERIL TO THE PROPERTY

WHAT IS INDIRECT LOSS

WHEN DAMAGE TO THE PROPERTY IS DUE TO INSURED PERILS, INCOME LOSS

WILL BE AN INDRECT LOSS

IN PROPERTY POLICIES WHAT PROPERTY IS EXCLUDED

· AUTOMOBILES AND OTER MOTORIZED VEHICLES

· WATERCRAFT
· PROPERTY VACANT FOR MORE THAN 30 DAYS
· MONEY AND SECURITIES
· BOOK AND CCOUNTS
· PETS

IN PROPERTY POLICIES, WHICH PERILS ARE USUALLY EXCLUDED

· WAR
· FLOOD
· NUCLEAR INCIDENT
· EARTHQUAKE
· RADIOACTIVE CONTAMINATION
· THEFT DURING EXHIBITION
· SEWER BACK UP

CONDITIONS IN A PROPERTY POLICY ARE

IT IS A CLAUSE IN A APOLICY THAT REQUIRE THE INSURED TO DO OR NOT TO DO
SOMETHING. A BREACH OF A CONDTION DOES NOT REDULT IN THE DENAIL OF A
CLAIM AS LONG AD THE LOSS WAS NOT CAUSED DIRECTLY BY SUCH BREACK

WARRANTIES ON PROPERTY POLICIES

IT IS A PROMISE MADE BY THE INUSRED THAT CERTAIN FACTS ARE TRULY AS

THEY ARE REPRESENTED AND WILLREMAIN SO FOR THE DURATION OF THE
POLICY . THE INUSRED IS NOT ENTITLED TO A PAYMENT AFTER A LOSS IS A
WARRENTY IS BREACHED

WHAT IS THE DEDUCTIBLE

THE AMOUNT INSURED IS REQUIRED TO ABSORD FOR EACH LOSS

ALL PROPERTY INSURANCE POLICIES DESCROBE THE METHOD USED TO PAY

CLAIMS. THE INUSRER WILL PAY THE LEASET OF THREE AMOUNTS IN THE
EVENT OF A CLAIM
· ACTUAL CASH VALUE (REPLACEMENT COST LESS DEPRECIATION)
· INSUREDS INTEREST IN THE PROPERTY
· POLICY LIMIT

WHAT IS THE CHIEF OBJECTIVE OF REPLACEMENT COST INSURANCE

IS THAT NO DEDUCTABLES ARE APPLIED FOR DEPRECIATION

TO QUALIFY FOR SETTLEMENT ON A REPLACEMENT COST BASIS, THE

INSURED MUST COMPLY WITH ALL OF THE FOLLOWING

· REPLACEMENT SHALL BE EFFECTED BY THE INUSRED WITH DUE DILIGENCE

AND DISPATCH
· REPLAEMENT SHALL BE ON THE SAME SITE OR AN ADJACENT SITE
· PAYMENT OF THE LOSS ON A REPLACEMENT COST BASIS SHALL BE PROVISED
ONLY AFTER THE INUSURED HAS ACTUALLY REPAIRED OR REPLACED THE
PROPERTY

WHAT ARE MORTGAGEES

ARE PEOPLE THAT HAVE INSURABLE INTEREST IN THE PROPERTY FOR EXAMPLE,
CREDIT UNIONS, LEASING COMPANIES, BANKS, INDIVIDUALS

WHAT IS A STANDARD MORTGAGE CLAUSE

PROVIDES A GUARANTEE TO THE MORTGAGEE THAT EVEN IF THE INSURED

BREACHED A CONDITION OR WARRANTY, THE MORTGAGEES INTEREST WILL
STILL BE PROTECTED BY THE INSURER.

WHO IS DEEMED TO BE INUSRED ON A HOMEOWNERS POLICY

· SPOUSE
· THE INUSRED COMMON LAW SPOUSE WHO HAVE BEEN LIVING TOGETHER FOR
OVER 5 YEARS
· RELATIVES WHO ARE LIVING WITH THE INSURED
· ANY PERSON UNDER 21 IN THEIR CARE
ARE TENENATS COVERED UNDER A HOME INUSREANCE POLICY

NO

EXTENSIONS OF COVERAGE ON A HOME INSURANCE POLICY

· PROPERTY REMOVAL- REMOVED TO ANOTHER LOCATION UP TO 30 DAYS TO

PROTECT IT
· MOVING TO ANOTHER HOME- PROPRTY IS INSURED IN TRANSIT WHEN MOVING
YO A NEW HOMW WITHIN CANADA FOR30 DAYS
· FREEZER FOOD($2000)- COVERAGE IS PROVIDED WHEN THERE IS AN
ACCIDNETAL INTERRUPION OF ELECTRICAL POWER ON OR OFF THE INUSREDS
PREMISES
· CHANGE IN TEMPERATURE- WHEN A CHANGE IN TEMPERATURE HAPPENS
INSIDE THE DWELLING AT THE TIME OF LOSS
· LOCK REPLACEMENT- WHEN THE KEYS HAVE BEEN STOLEN AN REPORTED TO
THE POLICE, 500 IS AVAILABLE FOR REPLACEMENT.

WHAT ARE IN COVERAGE SECTION 1 IN HOME INSURANCE

· COVERAGE A- DWELLING BUILDING- AMOUNT OF COVERAGE IS DETERMINED

BY USING VALUATION GUIDE
· COVERAGE B-DETACHED PRIVATE STRUCTIRES- 10% OF COVERAGE A-
DWELLING BUILDING WHICH IS IN ADDITION TO THE AMOUNT OF INSURANCE
STATED FOR COVERAGE A
· COVERAGE C- 80-100% OF COVERAGE A- COTENTS OF THE BUILDING, PERSONAL
PROPERTY WHICH IS TEMPERARLY REMOVED OFF PREMISE IS COVERED
ANYWHERE IN THE WORLD
· COVERAGE D- ADDITIONAL LIVING EXPENSES- 20%OF COVERAGE A- INCREASES
THE COST OF EVERYTHING THAT DOES NOT SERVE TO RAISE THE STANDARD OF
LIVING OF THE INSURED, LOSS OF RENTAL INCOME IS COVERED.

WHAT ARE THE SPECIAL LIMITS ON PERSONAL PROPERTY FOR HOME

INURANCE POLICIES.

· BUSINESS PROPERTY (2000)

· SECURITIES (2000)
· MONEY AND BULLION (200)
· RIDING LAWN MOWER (5000)
· COMPUTER SOFTWARE (2500)
· THEFT LOSSES JEWELRY, GEN, WATCHES, FUR GARMETS (2000)

IN HOMEOWNERS BASIC COVERAGE (IBC 1151) WHAT SMOKE DAMAGE IS AND

IS NOT COVERED

SMOKE DAMAGE FROM FIREPLACE IS NOT COVERED, ONLY SMOKE FROM

SUDDEN, UNUSUAL AND FAULTY OPERATION OF HEATING AND COOKING UNITS
ON THE PREMISES IN INSURED.

IS DAMAGE BY VEHICLE IMPACT COVERED UNDER HOMEOWNERS BASIC

COVERAGE (IBC 1151)
NO VEHICLES IMPACT CAUSED TO THE PROPERTY WHEN OPERATED BY CLIENT
OR CLIENTS EMPLOYESS IS COVERED UNDER HOMEOWNERS BASIC COVERAGE
(IBC1151)

IS DAMAGE DUE TO VANDALISM OR MALICIOUS ACTS COVERED UNDER

HOMEOWNERS BASIC COVERAGE (ICB 1151)

· YES DAMAGE DUE TO VANDALISM AND MACHIVOUS ACTS IS COBERED UNDER

THIS FORM
WHEN IS WATER DAMAGE COVERED UNDER HOME OWNERS BASIC
COVERAGE (IBC 1151)
· WHEN THE CLIENT HAD DAMAGE DUE TO FREEXING WHEN THEY'VE BEEN
AWAY FROM THE DWELLING FOR MORE THAN 4 DAYS , ITS NOT COVERED, BUT IS
THEY COME BACK BEFORE THEN, HAVE SOMEONE CHECK ON THE HOUSE, OR
SHUT THE WATER MAIN OFF

DAMAGE DUE TO THE FOLLOWING PERILS ARE EXCLUDED UNDER

HOMEOWNERS BASIC COVERAGE (IBC 1151) (4) INVOLVE WATER

· SEEPAGE OR LEAKAGE
· SEWER BACK UP
· SURFACE WATER
· GROUD WATER
WHEN IS DAMAGE TO THE DWELLING COVERED DURING A WIND/RAIN
STORM UNDER HOME OWNERS BASIC COVERAGE (IBC 1151)
WHEN THERE IS OPENING CREATED BY THE STORM THAT ENDS UP DAMAGING
THE INSUDE OF THE HOUSE, THEN IT IS COVERED UNDER HOMEOWNERS BASIC
COVERAGE.

WHAT TYPE OF GLASS DAMAGE IS COVERED UNDER HOMEOWNERS BASIC

COVERAGE (IBC 1151)

WHEN GLASS IS FORMING APART OF THE BUILDING IT IS COVERED, THERE IS NO

COVERAGE FOR GLASS FORMING PART OF PERSONAL PROPERTY (GLASSES,
DISHES ETC)

WHAT IS COVERED AND WHAT IS NOT COVERED UNDER HOMEOWNERS

COMPREHENSIVE COVERAGE (IBC 1155)

· PROPERTY IS INSURED ON AN ALL RISK BASIS

· SMOKE DAMAGE FROM FIE PLACE IS COVERED
· COLLAPSE FROM SNOW LOAD IS COVERED
· DAMAGE TO THE BULDING FROM BIRDS, INSECTS OR ANIMALS IS NOT
COVERED

WHAT IS AND WHAT IS NOT COVERED UNDER THE EMERGENCY REMOVAL

EXPENSES OF MOBILE

· 5% OF INSURANCE ON MOBILE HOMES IS USED FOR REMOVAL EXPENSES LIKE

TOWINIG AND DISCONNECTING UTILITIES, WHOEVER THERE IS NO COVERED IF
THE DWELLING IS DAMAGED WHILE BEING MOVED
WHAT IS COVERED UNDER CONDOMINIUM INSURANCE

· PEROSONAL PROPERTY
· IMPROVEMENT AND BETTERMENTS
· LOSS ASSESSMENT

WHAT IS A LOSS ASSESSMENT WITH CONCOMINIUM INSURANCE

IT PAYS ALL EXPENSES OF THE INUSRED WHICH WERE ORIGINALLY SUFFERED BY
THE CORPORTION. FOR EXAMPLE WHEN THEN CONDO CORPORATION CARRIES A
LARGE DEDUCTABLEON ITS POLICY OR COLLECTIVELY OWNED PROPERTY IS
DAMAGED AND THE CORPORATION DOES NOT HAVE SUFFICIENT INSURANCE,
LOSS ASSESMENT WILL STEP IN.

WHAT ARE THE TWO TYPES OF COMMERCIAL POLICIES

· NAMED/SPECIFIED PERILS POLICY

· ALL RISKS/BROAD FORM- IT INSURED ALL RISKS OF DIRECT PHYSICAL LOSS OR
DAMAGE SUBJECTED TO THE POLICY CONDITIONS AND EXCLUSIONS

WHAT ARE THE MAIN ADVANTAGES OF BROAD FORM FOR COMMERCIAL

POLICIES
· DAMAGE DUE TO IMPACT OF VEHICLE DRIVEN BY INUSRED OR EMPLOYEE IS
COVERED
· ALL TYPES OF SMOKED DAMAGE IS COVERED EXCEPT SMOKE FROM
AGICULTURAL SMUDGING OR INDUSTRIAL OPERATIONS
· WATER DAMAGE RESULTING FROM RUPTURED OR FREEXING WATER PIPES IS
COVERED

WHAT IS FACTORED INTO DETERMINE THE PREMIUM ON COMMERCIAL

POLICIES

· CONSTRUCTION
· PROTECTION (PUBLIC AND PRIVATE)
· OCCUPANCY
· CLAIMS HISTORY

WHAT DOES IT MEAN WHEN YOU LOAD COVERAGE

· AN ADDITIONAL RATE OR PREMIUM CHARGED BY THE INUSRER TO ADD MORE

PERILS INSURED UNDER COMMERCIAL PROPERTY INSURANCE

WHAT ARE THE THREE THINGS COVERED UNDER A STANDARD COMMERCIAL

PROPERTY CLAUSE

· BUILDING
· STOCK
· EQUIPTMENT.

UNDER THE STANDARD COMMERCIAL PROPERTY CLAUSE WHAT IS COVERED

UNDER BUILDING
· THE BUILDING ITS SELF
· BUILDING MATERIALS THAT ARE ON THE PROMISE FOR MAINTENANCE OR
REPAIRS
· GROWING TREES/SHRUBS/PLANTS AND FLOWERS MEANT FOR DECORATION

UNDER THE STANDARD COMMERCIAL PROPERTY CLAUSE WHAT IS COVERED

UNDER STOCK

· THE STOCK ITS SELF- SOMETHING THAT FLUCTATES ON A ADAILY BASES

· ADVERTISING MATERIALS
· PACKING AND WRAPPING MATERIALS
· SIMILAR PROPERTY OF OTHERS FOR WHICH THE INSURED IS LEGALLY.

UNDER THE STANDARD COMMERCIAL PROPERTY CLAUSE WHAT IS COVERED

UNDER EQUIPMENT
· ANYTHING USUAL OT THE CLIENTS BUSINESS WHICH IS NOT COVERED IN THE
DEFINITION OF THEBUILDING AND STOCK
· ANY TENANT IMPROVEMENT AND BETTERMENTS MADE BY THE INUSRED TO
THE BUIDLING WHEN THE INSURES IS NOT THE OWNER OD THE BUILDING

WHAT IS A REINSTATMENT CLAUSE

· AFTER A LOSS HAS BEEN PAID, THE AMOUNT OF INUSRNACE STATED ON THE
POLICY DOES NOT CHANGE NOR DOES THE INSURED HAVE TO PAY AN
ADDITIONAL PREMIUM.

WHAT IS THE PURPOSE OF CO INSURANCE

· IT LIMITS THE CAIM PAYMENT AFTER A PARTION LOSS WHEN THE INURER FINDS
THAT THE INUSRED HAS DELIBERATELY UNDERINSURED THE VALUES

WHEN IS CO INSURANCE APPLICABLE

· CO INUSRANCE IS ONLY APPLICABLE ON PARTIAL LOSSES. IF THE INSURED

BUYS LESS INSURANCE THAN 80% HE/SHE MAY BE PAID A CLAIM LESS THAN THE
AMOUNT OF DAMAGE AS PER THE CO INSURANCE CLAUSE FORMULA

WHAT IS THE CO INSURANCE CLAUSE FORMULA

· CLAIM = (DID/SHOULD) x LOSS

· SHOULD (80Xacv)

WHAT ARE THE RESPONSABILITIES OF THE INSURED WITH LOCK VEHICLE

WARRANTY

· THE INSURED PROPERTY MUST BE STORED IN A METAL COMPARTMENT

· VEHICLE SHOULD BE LOCKED WHEN THE INUSRED IS AWAR FROM IT
· CLAIM WILL BE PAID ONLY IF THE INUSRED IS ABLE TO SHOW THAT FORCE WAS
USED TO GAIN AN ACCESS TO THE VEHICLE

TEMPORARY LOCATION WITH COMMERCIAL POLICIES

· A LOCATION WHICH IS NOT OWNED RENTED OR CONTROLLED BY THE INSURED
IN WHOLE OR IN PART IS TEMPORARY LOCATION OF THE PORPERTY

VALUABLE PAPERS AND RECORD INSURANCE

· THE CLAIM IS PAYABLE FOR THE BLANK VALUE OF PAPER AND THE COST TO
TRANSCRIBE
WHAT IS COVERED UNDER BUILDERS RISK INSURANCE
· IT COVERS ALL MATERIALS WHICH ARE GOING TO BECOME ONE WITH THE
FINAL STRUCTURE
· COVERAGE LIMI PURCHASE MUST BE NO LESS THAN 100% OF THE COMPLEETD
VALUE OF THE PROJECT
· COVERAGE AUTOMATICALLY ENDS WHEN THE BUILDING IS OCCUPIED OR IF
THERE HAS BEEN NO WORK CONDUCTED FOR MORE THAT 30 DAYS
· TOOLS EQUIPMENT ARE NOT COVERED UNDER THIS FORM
WHAT IS COVERED UNDER INSTALLATION FLOATER

· IT INSURES THE INSTALLER PROPERTY WHILE IS TRANSIT, WHILE STORED AT

THE JOB SITE, AND ON AND AFTER THE INSTALLATION TILL THE WOR IS HANDED
OVER TO THE OWNER
WHAT IS COVERED UNDER GLASS INSURANCE

· IT INSURES GLASS FORMING PART OF THE BUILDING FROM ALL PERILS

EXCLUDING
o FIRE
o WAR
o NUCLEAR HAZARDS

WHAT IS THEBROADEST TYPE OF CRIME INSURANCE

THEFT INSURANCE

WHAT IS COVERED UNDER MONEY AND SECURITIES BROAD FORM

· ACTUAL DESTRUCTION
· DISAPEARANCE
· WORNGFUL ABSTRACTION
WHAT IS COVERED UNDER BURGLARY INSURANCE

· UNLAWFUL TAKING OF PROPERTY WHEN BUSINEDD IS CLOSED

· UNLAWFUL ENTERING THE EXISTING THE INSURED PERMISES
· CLAIM IS PAYABLE ONLU IF THE CLIENT IS ABLE TO SHOW VISIBLE SIGNS OF
FORCE

WHAT IS COVERED UNDER SAFE BURGLARY INSURANCE

· THE CONTENTS STORED IN SAFE

· IS THE SAFE IS REMOVED FROM THE INUSRED PREMISES, IT IS ALSO COVERED.
· SAFE SHOULD BE EQUIPPED WITH THE COMBINATION LOCKS

WHAT IS COVERED UNDER ROBBERY INSURANCE

· UNLAWFUL TAKING OF PROPERTY FROM A SUCTODIAN WHO HAS BEEN

RENDERED UNCONSCIOUS OR KILLED
· ACTUAL OR THREATENED VIOLENCE WITH CUSTODIAN

WHAT ARE THE TWO TYPES OF BUSINESS INTERRUPTION INSURANCE

· GROSS EARNING FORMS

· PROFITS FORM

WHAT IS THE DIFFERENCE BETWEEN GROSS EARNINGS FORM AND PROFIT

FORM

· GROSS EARNINGS FORM- PAYMENT UNDER THIS FORM STARTS ON THE DATE OF
THE LOSS AND CONTNIES UNTIL THE PROPERTY HAS BEEN REINSTATES
HOWEVER NOT EXCEEDING 12 MONTHS
· PROFIT FORM- PAYMENT UNDER THIS FRM STARTS ON THE DATE OF THE LOSS
AND CONTINUES UNTIL THE INCOME IS RESTORED TO THE LEVEL THAT WOULD
HAVE RESULTED HAD THE LOSS NOT OCCURRED

WHAT IS EXTRA EXPENSE INSURANCE FOR

· FOR BUSIENSS THAT NEED TO RESTART RIGHT AWAY, LIKE LAWYERS OFFICES
AND DOCTORS OFFICES

WHAT IS CIVIL LAW

· SETTLES DISAGREEMENT BETWEEN INDIVIDUALS THAT DOES NOT INVOLVE A

CRIMINAL ACT. IT PROVIDES CONPENSATION FOR A WRONG DONE BY ANOTHER

WHAT IS A PLAINTIFF
· A PERSON WHO FILES LEGAL ACTION AGAINST DEFENDANT

WHAT ARE THE TWO BRANCHES OF CIVIL LAE

· CONTRACT LAW
· TORT LAW

WHAT ARE THE THREE TYPES OF TORTS

· INTENTIONAL- CRIMINAL ACTS

· UNINTENTIONAL- NEGLIGENCE
· STRICT LIABILITY- DEFENDANT IS PROSUMED TO BE GUILTY UNTIL PROVEN
INNOCENT.

PEOPLE CAN BE FOUND LIABLE FOR A TORT UNDER WHICH LAWS (2)

· COMMON LAW
· STATUTE LAW

PEOPLE WHO OCCUPY A PREMISE OWE LEGAL DUTIES TO OTHER, WHAT DO

OWERS A PROPERTY OWE TO TRESPASSERS

· OCCUPIERS DO NOT OWE AN LEGAL DUTY, BUT CAN NOT INTENTIONALLY

HARM THEM

PEOPLE WHO OCCUPY A PREMISE OWE LEGAL DUTIES TO OTHER, WHAT DO

OWERS A PROPERTY OWE TO LISENSEES

· OCCUPIERS MUST POINT OUT DANGERS THAT ARE KNOWN TO BE DANGEROUS

PEOPLE WHO OCCUPY A PREMISE OWE LEGAL DUTIES TO OTHER, WHAT DO

OWERS A PROPERTY OWE TO INVITEES
· OCCUPIERS MUST PROTECT THE INVITEE FROM ANY DANGERS THE OCCUPIER
IS AWARE OF OR SHOULD HAVE BEEN AWARE OF

PEOPLE WHO OCCUPY A PREMISE OWE LEGAL DUTIES TO OTHER, WHAT DO

OWERS A PROPERTY OWE TO CHILDREN

· OCCUPIERS MUST KEEP CHILDREN SAFE FROM ALL DANGERS

INDEPENDENT CONTRACTORS ARE ALWAYS RSPONSIBLE FOR THEIR OWN

TORTS, UNLESS

· PRINCIPLE CONTROLS INDEPENDENT CONTRACTRORS WORK

· GIVEN WORK IS DANGEROUS
· PRINCIPLE PROVIDES TOOLS WHICH CAUSED INJURY

WHO IS A BAILEES FOR HIRE

· SOMEONE WHO HAS TEMPORARY CUSTODU OF A CUSTOMERS PERSONAL

PROPERTY FOR THE PURPOSE OF REPAIR, STORAGE, CLEANING.

WHAT KINF OF LEVEL OF CARE SHOULD A BAILEE OF HIRE EXERCISE

· ODINARY LEVEL OF CARE

WHEN ARE EMPLOYERS NOT RESPONSIBLE FOR THE TORTS OF EMPLOYEES

DURING JOB

· WHEN INJURIES OR DAMAGES ARE CAUSED BY EMPLOYEES WHO ARE ON A

FROLIC OF THEIR OWN
· WHEN THEY DELIGATE WORK TO DESIGNATED TO OTHERS AND INJURY OR
DAMAGE RESULTS
· WHEN AN EMPLOYE USES PROPERTY WITHOUT AUTHORITY FOR THEIR OWN
PURPOSE

WHAT IS WITH CHILDRENS TORTS

· CHILDREN ARE LIABLE FOR THERE OWN TORTS, HOWEVER THERE PARENT ARE
FINANCIALLY RESPONSIBLE FOR INJURY OR DAMAGE CAUSED BY THEIR
CHILDREN WHEN THEY ARENT SUPERVISED, PARENT HAVE GIVEN THEM
SOMETHING DANGEROUS, CHILD IS ASSITING IN PARNETS BUSINESS, CHILD IS
ACTING ON PARENTS INSTRUCTION S
WHO HAVE THE POWER TO IMPOSE LEGAL LIABILITY

· THE COURTS

WHAT IS AN OCCURNECE IN REGARDS TO LIABALITY INSURANCE

· IT MEANS ACCIDENTAL INCLUDING THE CONTINUOUS OR REPEATED EXPOSURE
TO SUBSTANTIALLY THE SAME GENERAL HARMFUL CONDITIONS

WHAT IS BODILY INJURY

· PHYSICAL INJURY TO THE BODY, DEATH RESULTING FROM THESE PHYSICAL

INJURIES, DIDEASE OR SICKNESS RESULTING FROM THESE PHYSICAL INJURES

WHAT DOES PROPERTY DAMAGE INCLUDE

· IT INCLUDES DAMAGE TO THE PHYSICAL PROPERTY SUCH AS BUILDING, CAR,

ETC

WHAT DOES LIABILITY COVERAGE NOT COVER

PUNITIVE, NOMINAL AND EXEMPLARY DAMAGES, THEY ONLU COVER

COMPENSATORY DAMAGE

LIABALITY POLICIES ALSO PAY SUPPLIMENTARY PAYMENTS, WHAT IS

INCKUDED UNDER THAT

· COURT COST, DEFENSE COST, INVESTIGATION EXPENSE, LOSS OF INTEREST TO

THE PLAINTIFF WHEN DEFENDANT PREPERS TO APPEAL THE COURT DECISION

WHAT IS THE PURPOSE OF AN UNBRELLA POLICY

· TO BROADEN COVERAGE AND TO INCREASE THE LIMIT

WHAT DO YOU NEED TO HAVE TO BE ELIGIBLE FOR AN UMBERALLA POLICY

· AN ALREADY EXISTING POLICY

WHEN WILL THE UMBRELLA POLICY PAY

· WHEN THE INSURED PRIMARY POLICY DOESN'T HOLD ENOUGH INSURANCE,

THE UNBRELLA POLICY WILL PAY THE EXCESS, OR WHENT THE PRMARY POLICY
DOESN'T COVER THAT PERIL.

WHAT ARE THE FOUR COVERAGE IN SECTION 2 OF THE HOMEOWNERS

POLICY

· COVERAGE E- PERSONAL LIABLITY

· COVERAGE F- VOLUNTARY MEDIAL PAYMENTS
· COVERAGE G- VOLUNTARY PAYMENT FOR DAMAGE PROPERTY
· COVERAGE H- VOLUNTARY COMPENDATION FOR REDIDENCE EMPLOYEES

WHAT DOES COVERAGE E INSURE

IT INSURES THE INUSRED ANYWHERE IN THE WORLD WHILE ACTING AS A
PRIVATE CITIZEN. EMPLOYEES ARE COVERED, BUT PEOPLE IN THE HOUSE ARE
NOT

WHAT DOES COVERAGE F INSURE

· NO NEED TO SHOW THAT THE CLIENT WAS LEGALLY LIABLE, MAXIMUM PAID TO
THE INSUERE IN 1000 AND MAXIMUM FOR ONE YEAR AND WITHIN CANADA

WHAT DOES COVERAGE G INSURE

ONLY DAMAGE TO PROPERTY BY UNINTENTIONAL ACTS IS COVERED, BUT IT

COVERS INTENTIONALS ACTS OF CHILDREN AGED 12 AND UNDER

WHAT DOES COVERAGE H INSURE

PRODIVES MINIMAL BENEFITS TO COVER INJURIES TO TEMPRARY RESIDENCE
EMPLOYEES

UNDERCOVERAGE H WHEN DO THEY COVER GOLD CARTS

WHEN THEY ARE USED ON THE GOLD COURSE

WHAT ARE THE THREE COMMON BUSINESS EXPOSURES

· PREMISES LIABILITY CLAIM- INJURY DUE TO CONDITIONS OF PREMISE

· PRODUCT LIABILITY CLAIM- INJURY CAUSED BY PRODUCTS SOLD
· LIABILITY ARISING FROM PERSONAL INJURY- INJURY RESULTING FROM LIBEL
OR SLANDER

WHAT IS LIBEL INFO

· WRITTEN INFORMATION

WHAT IS SLANDER INFORMATION

SPOKEN

WHAT ARE THE TWO SPECIALIZED BUSINESS EXPOSURES

· MALPRACTICE INSURANCE- FOR HEALTH CARE PROVIDERS
· ERRORS AND OMISSIONS- BUSINESS PROVIDING ADVICE AND COUNSELLING
PREMIUM RATING FOR TRAVEL INSURANCE IS WEIGHED BY

· BY AGE, HEALTH, LENGH OF TRIP, DESTINATION, COVERAGE AMOUNT

HOW IS BODILY INJURY AND PROPERTY DAMAGE SPLIT ACCORDING TO THE

PRIORITY OF PAYMENT RULE
· BODILY INJURY IS 90%
· PROPERTY DAMAGE IS 10%

WHEN ARE ACCIDENT BENEFITS PROVIDED

· ON A NO FAULT BASIS

WHO IS ELIGEBLE FOR ACCIDENT BENEFITS

· INSURED
· INSURED SPOUSE
· OTHER OCCUPANTS OF THE VEHICLE
· CYCLISTS OR PEDESTRIANS HIT IN CANADA ONLY

WHEN AN INSURED IS KILLED WHAT IS THE SURVIVING SPOUSE INTITLED

TOO

· THE SURVIVING SPOUSE AND DEPENDANT GET AN INITIAL LUMP SUM AMOUNT
AND WEEKLY PAYMENTS OF UP TO 104 WEEKS

WAGE LOSS BENEFITS, HOW DOES IT WORK WITH GROUP ACCIDENT OF

SICKNESS POLICIES

· IF THEY REDUCED THE AMOUNT OF THE MONEY THEN IT IS REDUCED FROM

ICBC TOTAL, THE CLIENT WILL NEVER PROFIT FROM HAVING MORE THAN ONE
INSURANCE COMPANY PROVIDING THEM WITH COVERAGE, THE INSURANCE
COMPANIES ALL WORK TOGETHER TO PROVIDE SUFFICIENT COVERAGE

HOW DO YOU BECOME ELIGIBLE FOR WAGE LOSS BENEFITS

· TO BE ELIGIBLE FOR BENEFITS, INSURED MUST BE ABLE TO SHOW THAT THEY

WERE EMPLOYED AT THE TIME OF THE ACCIDENT OR HAD WORKED FOR AT
LEAST 6 OF THE 12 MONTH PRIOR TO THE ACCIDENT.

HOW DO PAYMENT WORK WITH THE WAGE LOSS BENEFITS

· PAYMENTS START ON THE 8TH DAY OF THE ACCIDENT AND CONTINUE TO THE
DURATION OF THE DISABILITY OR WHEN THE PERSON REACHES THE AGE OF 65,
WHICHEVER COMES FIRST

WHEN IS THE WAGE LOSS POLICY PAYABLE

· WHEN THE INSURED IS COMPLETELY DISABLED

WHAT IS THE UNDERINSURED MOTORIST PROTECTION

· WHEN AN AT FAULT DRIVER DOES NOT HAVE ENOUGH INSURANCE FOR THE
BODILY INSURY OF DEATH CLAIM. THE BASIC AUTO PLAN WILL COVER TO A MAX
OF 1MILLION PER PERSON

HOW ARE YOU COVERED UNDER YOUR BASIC AUTOPLAN COVERAGE FOR
HIT AND RUNS

· YOU PAY THE FIRST $750 AND ICBC WILL PAY THE REST, OR THE DEDUCTABLE
THAT WAS CHOSEN UNDER OWN DAMAGE
WHAT DOES INVERSE LIABILITY COVER

· IT COVERS THE INSURE THOUGHOUT CANADA AND THE US BUT NOT BEYOND
THE BORDER OF MEXICO

WHAT IS THE ROAD STAR PACKAGE (5)

· PEOPLE NEEDS TO HAVE THE HIGHEST LEVEL OF DISCOUNT, IT INCLUDES

· ROAD STAR RENTAL VEHICLE COVERAGE- FOR A RENTAL NOT EXCEEDING 30
DAYS
· ROAD STAR LOSSS OF USE COVERAGE- PAYS FOR RENTAL VEHICLE COSTS
WHILE YOURE IS BEING REPAIRED
· ROAD STAR VEHICLE TRAVEL PROTECTION- COVERS ADDITIONAL EXPENSES
FOR WHEN YOUR VEHICLE IS DAMAGED WHILE ON A TRIP
· AND ROAD STAR LOCK AND REKEYING-
WHAT KIND OF COLLISION IS NOT COVERED UNDER THE COLLISION
COVERAGES
· COLLISION WITH AN ANIMAL

WHAT DOES COMPRESENSIVE INSURANCE COVER

· INSURES ALL LOSSES OTHER THAN COLLISION OR UPSET, INCLUDES COLLISION
WITH AN ANIMAL LIVING OR DEAD

FACTORS AFFECTING PREMIUMS (5)

· MODEL MAKE AND YEAR OF THE VEHICLE

· USE OF VEHICLE
· TERRITORY IN WHICH THE VEHICLE IS USED IN
· CALIMS HISTORY
· AMOUNT OF DEDUCTABLES

THEFT OF A DEHICLE MUST BE REPORTED TO THE POLICY IN THE FIRST

48 HOURS
WHEN IS THE EXCESS SPECIAL EQUIPMENT ENDORSMENT REQUIRED

· WHEN EQUIPMENT HAS BEEN INSTALLED INTO THE VEHICLE BY A PRIVATE

SOURCE.

WHAT IS INSURED UNDER THE SPECIAL EQUIPMENT ENDORSEMENT

· SOUND RELATED EQUIPMENT (1000)

· CUSTOME PAINT (5000)
· PERMANENTLY ATTACHED EQUIPMENT (SPECIAL WHEEL, TIRED ETC) (5000)

WHAT IS A BINDER FOR OWNERS INTERIM CERTIFICATE OF INSURANCE USED

FOR

· WHEN A BC RESIDENT PURCHASES A VEHICLE OUT OF OF THE PROVINCE OR IN

ANOTHER COUNTRY, WHO WISHES TO BRING IT BACK TO BC FOR LICENSING, ITS
IDDUES FOR A MAX OF 31 DAYS
WHAT IS INSURED UNDER UNLICENSED VEHICLE POLICY

· UNLICENSED VEHICLE IN STORAGE

· UNLICENSED MOTOR CYCLE WITH AN ENGINE CAPASITY OF 110CC OR LESS
USED BY AN UNDERAGED OPERATOR
WHAT ARE THE THREE FUNCTIONS OF INSURANCE COUNSIL OF BRITISH
COLUMBIA

· LICENSING
· HANDLING COMPLAINTS
· DISCIPLINING OF BROKERS