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IF2 > Chapter 10- Policy Wording > Flashcards

Chapter 10- Policy Wording Flashcards

1
Q

What does a policy schedule contain

A

Usually contains all the variable info concerning the insured and the risk insured and usually signifies which sections of the policy are operative

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2
Q

As a general rule what are the 7 basic structure for all general policies incorporate

A
  1. Heading
  2. Recital clause
  3. Signature
  4. Operative clauses
  5. Exceptions
  6. Conditions
  7. Info and facilities
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3
Q

What is the recital clause

A

The coming together to form the contract.

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4
Q

What 3 things will the recital clause contain

A
  1. Policy conditions
  2. A claim being rejected
  3. Proposal confirmation
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5
Q

Why must the insured check the proposal confirmation

A

Failure to provide correct info can result in:

  1. Policy being invalidated
  2. Claim being rejected
  3. Claim not being paid in full
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6
Q

What are the operative clauses in regards to policy documents

A

They describe the scope of the cover in detail outlining cover

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7
Q

How are conditions stated in policies

A

Either implied or express

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8
Q

What 4 things does it mean by implied conditions under policy documents

A

The insured must:

  1. Act if uninsured
  2. may be required to advise the appropriate authorities
  3. Must take reasonable action (I.e attempt to distinguish a fire)
  4. Must not hinder insurers in their investigation of a claim
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9
Q

What is the difference between implied and expressed conditions

A

Implied conditions exist whether or not they appear in the policy

Express conditions are included in the policy wording

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10
Q

What 10 things are included in a policy schedule

A
  1. Insureds name
  2. Insurers address
  3. Policy period
  4. Premium
    5: details of the subject matter
  5. Sum insured or limit or liability
  6. Territorial limits
  7. Policy number
  8. Any special exclusions conditions etc
  9. Operative sections of the policy
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11
Q

What is meant by the term market exclusions

A

These are general exclusions common to all insurance policies

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12
Q

Why are war and related perils excluded

A

They are considered to be a fundamental risk applying to the community at large and therefore uninsurable

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13
Q

What is pool Re

A

A mutual reinsurance policy that offer all risks perils to terrorism

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14
Q

What is the only way pollution can be covered under PL policies

A

Must not be a gradual operating cause and has to be a sudden identifiable event

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15
Q

What is a marine policy exclusion

A

Exclusion is standard in all property insurance policies for material damage to the property

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16
Q

What is contractual liability an exclusion of

A

All motor and liability policies

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17
Q

What is the alteration policy common condition

A

Found in most property insurance policies- duty of fair presentation to notify of any changes

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18
Q

What is the action by the insured in the event of a claim common condition

A

Sets out the procedures to be followed in the event of a claim

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19
Q

What is the fraud policy Common condition

A

In the event of any fraudulent, false or exaggerated claims being made:

  1. The policy may be cancelled
  2. Claim may be rejected
  3. Insured may retain any premiums paid
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20
Q

What is the reasonable precautions common condition

A

The insured must minimise the risk of loss or damage

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21
Q

What is meant by the average condition

A

For property insurance, indemnity requires the insurer to pay the full value of the loss but only if the insured has declared the full value of the insured risk.

The average condition reduces claims payments to the proportionate amount if under insurance

22
Q

What is the subrogation common condition clause

A

It’s the right of the insurer to take over he insurers rights following payment of a claim

23
Q

What is the arbitration common condition

A

It’s intended to deal with any disputes or hat arise as to the amount to be paid in settlement of a claim

24
Q

The insured may be able to receive a refund under the cancellation condition if the insurer exercises its right to cancel by which way

A

A pro rata refund

25
Q

What happens if the insured cancels the policy under the cancellation condition

A

If the policy hasn’t stated the insurer will return any premium paid in full

Within 14 day so the insured receiving the policy docs the insurer will return any premium paid less an admin fee

After 14 days the insurer will return any premium paid less an admin fee and the amount for the period the policy has been in force

26
Q

What did the deregulation act 2015 do in respect of motor insurance

A

Don’t have to return motor cert

27
Q

What do market exclusions often relate to

A

Situations where the insurer does want to become involved because of the catastrophic nature of any potential damage

28
Q

What are the 5 things insurance do for info and facilities

A

1- definitions. They will refund a single word

2- customer service standards statement

3- complaints procedures

4- claims info

5- privacy notice

29
Q

Why will insurers issue a privacy notice

A

Under the data protection act 1998 they will summarise how the insurer will handle the info gathered

30
Q

What is an excess

A

The first amount for each and every claim for which the insured is responsible

31
Q

What is given the name for a large excess

A

A deductible

32
Q

What is a franchise in respect to excess

A

It’s a fixed amount or period that acts as a threshold to determine whether claims are payable

33
Q

What are time franchises sometimes found in

A

Engineeeing BI cover and sickness cover

34
Q

What is meant by a warranty

A

There may be important aspects of the risk that must be stated

35
Q

What must warranties be

A

Strictly and literally complied with

36
Q

What is essentially a warranty

A

A promise made by the insured relating to facts or performance concerning the risk

37
Q

What is a warranty an undertaking that the insured:

A

Something will or won’t be done

A certain fact exists or doesn’t exist

38
Q

What is a continuing warranty

A

Where the insured promises that they will do something or things will continue

39
Q

What happens under the Insurance Act 2015 is there is a breach of warranty

A

An insurer will not repudiate liability for a loss under a consumer contract

Also that warranties should become suspensive conditions- in other words the insurer will not be liable for losses occurring whilst there is a breach

40
Q

Under the insurance act 2015 what is the summary for breach of warranties

A

Basis of contract clauses are prohibited so any warranty in a policy must be expressly agreed

An insureds breach of warranty merely suspends the insurers liability under a policy

An insurer my not rely on a breach of warranty where the warranty relates to a risk that is irrelevant to the type of loss

Warranties are written into the policy

41
Q

What policy is an implied warranty found in

A

Marine insurance

42
Q

What is a condition precedent to the contract

A

These are conditions that just be fulfilled prior to the formation of the contract itself

43
Q

What 3 matter will render a policy void under policy conditions

A

1- no insurable interest

2- a fundamental mistake

3- an illegal contract

44
Q

What is meant by a continuing conditions precedent

A

In motor insurance is it usual to have a condition relating to the roadworthy of the vehicle. It is an ongoing requirement

The insurer can set aside the whole contract if there is breach

45
Q

What are the two options available for an insurer under a continuing conditions precedent

A

Avoid the policy from the date of breach

Waive its right and leave the whole contract in force

46
Q

What are conditions precedent to liability

A

Conditions that must be complied with if there is to be a valid claim.

If a condition precedent is not observed insurers can void liability but they may not repudiate the contract as a whole

47
Q

What happens if a term is breached

A

Must be related to the loss that occurred for the insurer to rely join

48
Q

What is representation

A

Made during the negotiation period what is disclosed

49
Q

What does there wall notice do

A

Shows any proposed changes in terms.

Premium to renew

Last years premium

50
Q

For renewals between 1 and 3 years what needs to be included in consumer renewal notices

A

The renewal premium

Last years premium

The total premium inc any MTA

A statement to say that the insurerd should shop around

IF2 (15 decks)

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