RIBO CH 4

Loss

The amount an insurer must pay due to a covered event (peril)

Claim

A demand by the insured for indemnity or restitution for injury or damage, arising from negligence or contractual rights

Accident

Unexpected event, narrower in scope than occurrence

Occurrence

Event or repeated exposure to an unfavorable situation

Claims - Made

Coverage triggered when a claim is made during the policy term

Impact of Loss Date

The date a loss occurs can affect which policy covers the claim, especially for liability claims (occurrence, accident, or claims-made basis)

Forfeiture

Loss of rights due to non-performance of obligations

Prescription

Legal time limit for bringing a claim (statute of limitations)

Salvage

Remaining value of damaged property, which can reduce claim costs

Subrogation

Insurer’s right to recover losses from liable third parties after paying a claim

Contribution

When multiple policies cover the same risk, losses are divided equitably (depending on the agreed share of each insurer)

Coinsurance

Clause to encourage insureds to carry adequate amounts of insurance on their (commercial) property by requiring them to bear a portion of every loss. Usually expressed as a % as shown on the policy

Key functions of Adjusters

Verify coverage, investigate loss, assess damage, negotiate/deny claim, settle, recommend payment, review recovery possibilities

Agents / Brokers (Intermediaries)

First point of contact for insureds and may have claims handling authority (within limits)

Independent Adjusters

Hired by insurers for complex claims or high volume (must be licensed)

Public Adjusters

Represent insureds, mainly for large property claims

Staff Adjusters

Salaried employees of insurers (not always needs to be licensed)

The prescription period in Ontario and Quebec for automobile claims are

One year in Ontario and two years in Quebec

Coinsurance is mostly applied to these types of contracts

Commercial

Telephone Adjusters

Typically handle smaller and straight forward losses

An implied contract is one which

The parties have acted in such a way that it is understood that an agreement exists