Chapter 10 – Insurance Documents and Processes Summary Notes Download
Chapter 10 - Quiz view
Terms | Definitions |
|---|---|
 What is the purpose of an insurance application? | the purpose is a request for insurance coverage. |
| What is an oral application? | one in which the applicant gives the information orally to the agent/broker who writes it down and submits to an insurer. |
| Define coverage. | term used for insurance protection |
| When is temporary insurance useful? | It is useful when the insurer may agree to insure the risk but simply does not yet have certain information or confirmations to issue the policy. |
| Distinguish between a cover note and a binder. | a binder is an agreement to insure that is issued by the insurer and a cover note is a document issued by agents/brokers that tells the insured that the insurance has been effected. |
| What is a deductible? | is the amount of a loss which the insured must pay. |
| How is a binder cancelled? | a temporary insurance document is issued for a fix period of time. |
| Define an insurance policy. | is an instrument evidencing a contract. It states the exact terms and provision of that contract. |
| What are the basic parts of an insurance policy? | -Declarations (introduction) -Insuring agreements -Statutory conditions/Quebec general conditions -Policy conditions -Signature clause |
| What is contra proferentem? | It means against the offeror. It means that if there is any disagreement as to the meaning or interpretation for a policy, the court would interpret it in such a way as is most advantageous to the insured. |
| What is a warranty? | is a promise by the insured as part of the contract that a specified state of affairs will continue to exist for the duration of the policy. |
| What is a representation? | is a statement of existing fact at the time it was made. |
| What is pro rata cancellation? | is the cancellation of a policy when the return premium paid is the full proportionate part due for the unexpired term. |
| What is short rate or short date cancellation? | is applicable when the policyholder cancels before a policy reaches its natural expiration. |
| When is a reinstatement endorsement used? | will put a previously cancelled policy back in force upon agreement of the insured and insurer. |
| How does a policy lapse? | It is lapsed when the policy is not renewed. |
| What is an expired policy? | It is expired when the term has been completed and it has not been renewed. |
| What factors influence the standardization of insurance policies? | - legislation - may specify an enitre policy wording or may just set certain guidelines with respect to eh contents of a policy. - general usage - most personal lines and many mercantile risks have similar exposures and lend themselves well to standard policies. - court decisions - have established the meaning of phrases used in certain policies and insurers may be reluctant to change them. |
| What is a manuscript policy? | one that is specifically designed for a particular risk. |
| What is the purpose of a certificate of insurance? | it is the verification of insurance to a third party. i.e. owner wants confirmation of insurance by contractor. |
