CAIB 1: Chapter 3.2 - Textbook Questions

Fine Arts Endorsement (IBC 1113)

Provides broader coverages than are available under most habitational forms and a more equitable basis of settlement

Personal Articles Endorsement (IBC 1141)

Provides broader coverages than are available under most habitational forms for high valued personal property items

Increased cost Demolition or Construction Endorsement (IBC 1180)

• Changes the basis of settlement to reflect the increased costs to comply with existing building by-law, law or ordinance after a loss.

• Coverage can be purchased for either or both of the following:

  • Sprinkler by-law extension

  • Demolition or construction extension

Residence Glass Endorsement

Adds accidental glass breakage coverage to buildings. Most frequently used as a means of reducing the deductible for glass breakage under the policy

Sewer Back-Up Endorsement

Broadens the coverages provided under most habitational policies to include loss or damage caused by the backing up or escape of water from a sewer or drain, sump, septic tank, eavestrough for downspout (endorsement varies from insurer to insurer)

Travel Trailer Floater

Provides coverage for owned trailers and their contents (normally excluded by habitational policies)

what items are insured under the Outboard Motor and Boat policy

• Coverage can be purchased for either or all of the following items:

  • The boat, including permanently attached equipment (except outboard motors)

  • The motor(s), including fuel containers, starting equipment and controls supplied by manufacturer

  • Other boat equipment including batteries, battery chargers, oars, flares, life preservers

2 important coverages provided in the “all risks” policy of Outboard Motor and Boat

• Coverage is provided for "all risks" including:

  • Transportation losses

  • Collision with rocks and floating objects

5 exclusions in the Outboard Motor and Boat policy

• 1: accumulation damage, however caused

• 2: wear and tears, gradual deterioration, latent defect, mechanical breakdown, corrosion, rust, dampness of atmosphere, freezing or extremes of temperature

• 3: work done on insured property, except for resultant damage caused by fire or explosion

• 4: dishonesty of persons to whom the insured property is entrusted, except carriers for hire

• 5: while insured property is rented or leased to others, used to carry passengers for compensation or being operated in a race or speed test

Explain the Loss or Used coverage in Outboard Motor and Boat policy

Loss of use coverage is limited to $20/day ($200 limit during policy period) for rental of boat and/or motor when the insured watercraft is damaged by an insured peril

Explain the basis of settlement in the event of a loss to watercraft

Coverage is available on either of an actual cash value or replacement cost basis

Explain why boat and motor policies normally contain a minimum retained premium provision

As watercraft are generally not used 12 months each year, the minimum retained premium provision helps to ensure that the insurer receives adequate premium for those months whether there is the greatest potential for loss