Ch7 |10Q| Property Insurance

Which of the following best describes a Comprehensive Tenant Policy?

• It covers theft only.

• It covers theft only, provided there are visible signs of breaking in.

• It is the same as a Homeowner Policy, but it does not cover buildings or outbuildings.

• It covers the insured’s building, summer cottage, and the contents of both.

What is covered under a Condominium Unit Owner Policy?

• The condominium building itself plus the unit owner’s contents.

• Outbuildings.

• The unit owner’s personal property (contents) and any unit improvements and betterments.

• Other structures separated by a clearly defined space.

Answer explanation

condo unit owner coverage includes A, C, & D. The policy does not include B for detached structures. * The tenant policy therefore does not include A or B, for the structure - covered by the aforementioned policy.

An all-risks policy covers:

• Any kind of loss.

• Fire, extended coverage, and earthquake.

• Specified perils, including earthquake and sewer backup.

• Any kind of loss, subject to exclusions.

Which of the following best describes the fire and extended coverage Secondary and Seasonal Residence Forms?

• They are identical.

• The Secondary Residence Form covers more perils.

• The Seasonal Residence Form covers more perils.

• Both automatically include burglary coverage.

Answer explanation

Seasonal dwelling comprehensive policy does not include coverage B or D policy. coverage B and D can be added to the coverage for additional premium. Therefore, the detached structures (B) and the additional living expenses incurred from loss (D) are not within standard seasonal dwelling policy coverage.

Which of the following losses are not covered under a Comprehensive Homeowner Policy?

• Collapse of the roof due to snow load at the seasonal dwelling.

• Additional expenses resulting from a temporary stay in a hotel following bad storm damage to the roof.

• Smoke damage to a light-coloured chesterfield following a kitchen fire.

• Damage caused by a tree falling into the swimming pool and destroying the liner.

Under the Comprehensive Homeowner Policy, which of the following statements is correct?

• House guests’ property is automatically covered for the perils of the policy.

• House guests’ property can never be covered under the policy.

• Only the property of the named insured is covered under the policy.

• None of the above.

Answer explanation

extended coverage can be added with additional premium. The additional coverage would be a rather generous/poor financial decision for the insured to undertake.

The Kumar family has rented the same seasonal dwelling for 20 years, for two months each year. They bring all their clothes, bedding, and supplies (worth $4,000). Unfortunately, a fire destroyed the building in the first week and all was lost. They have a $50,000 Comprehensive Tenant Policy. How much would this policy pay above the $500 deductible?

• Nothing.

• $1,800.

• $3,500.

• $4,000.

Answer explanation

The property is covered since the insured were at the seasonal dwelling and using the property. "Only covers personal property used while on the seasonal dwelling premises.

Covered for;

• Named perils only.

• ACV only."

[IBAO, Contributing Authors]

Shaun plans to renovate his bungalow, which means he has to vacate his home for six months. His coverage for additional living expense will:

• Not provide any coverage.

• Provide coverage for a maximum of two weeks.

• Pay all extra expense incurred during the six-month period.

• Provide coverage only if a loss occurs in those six months.

Jelena is selling her house and moving to a low-rise condominium. She asks you, her broker, what she should do with her current Homeowner Policy. What would you advise her to do?

• Endorse the current policy to the new address, but delete the building and liability coverages because they will be covered under the master policy of the condominium.

• All the building coverages for the new condominium are covered by the master policy, so she needs only a Tenant Policy in her name.

• Make no change, as the Homeowner Policy is just as good as a Condominium Unit Owner Policy. She just needs to change the address.

• The Homeowner Policy must be replaced by a Condominium Unit Owner Policy, which gives certain extra coverages she will need as a unit owner.

Is loss or damage caused by an earthquake insurable?

• Yes — it is one of the insured perils usually covered in a property insurance policy.

• No — it is not available under a property policy.

• No — being an “act of god,” it is never insurable.

• Yes — it can be added to a property policy for an additional premium.

Answer explanation

Never automatically covered perils: floods, earthquakes, sewer backups & repairs or construction due to by laws