Term
| Explain the role of the Property And Casualty Insurance Compensation Corporation when an insurer becomes insolvent. |
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Definition
| When insurer is bankrupt, the PACICC pays all valid claims. |
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Term
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Definition
| One who manages money or property of another. |
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Term
Explain the fiduciary obligations of;
1. Brokers
2. Insurers |
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Definition
1. Brokers - commissions not fully earned until expiry of insurance policy. Unearned commisions held in trust and refunded if insured cancels policy prior to expiry date.
2. Insurers - premiums paid to insurers (by Brokers) not fully earned until expiry of insurance policy. Unearned premiums held in trust to be refunded if insured cancels policy prior to expiry date. |
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Term
| Summarize the "Removal Clause" contained in policies of fire insurance. |
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Definition
If property is not located at the insured premises at the time of loss, there is no coverage.
Exception: Coverage is extended when property is moved to location other than insured premises, to reduce further losses. |
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Term
| State the meaning of subrogation and indicate how thisright is excercised by the insurer. |
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Definition
Subroagation means to put oneself into another's shoes.
The Insurance Act allows the insurer to put itself in the insured's shoes, giving them the right to recover the amount of the loss from a responsible 3rd party. Action taken against the responsible party is taken under the insured's name. |
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Term
| How can a term or condition of the insurance contract be waived by an insurance broker. Explain. |
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Definition
| When provided in writing by a person authorized by the insurer. Normally an officer or the insuranc company. |
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Term
| Your clients received their policy one month ago. It has not yet been paid for. Yesterday they had a fire loss. What effect does the delivery of the policy have on the obligations of the insurer? |
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Definition
| Their claim will be binding on the insurer as if the premium had been paid. |
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Term
| Identify 3 coverages provided on all policies of fire insurance. |
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Definition
1. Fire
2. Lightning
3. Explosion of natural gas, coal or manufactured gas. |
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Term
Explain Friendly Fire and give an example.
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Definition
| Friendly Fire is one that is contained in it's proper receptacle, it is where it is supposed to be. An example of Friendly Fire would be fire contained and burning in a wood stove. |
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Term
| Explain Hostile Fire and give an example. |
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Definition
| Hostile Fire is one that has escaped from its receptacle, or originates outside of any such receptacle. Loss of carpet, due to a spark that escaped from a fireplace is an example of Hostile Fire. |
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Term
| Which type of fire, Hostile or Friendly, is the only one covered by insurance policies? |
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Definition
| Insurance policies provide coverage for losses arrising from Hostile Fires only. |
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