Chapter 10- Policy Wording Flashcards
What does a policy schedule contain
Usually contains all the variable info concerning the insured and the risk insured and usually signifies which sections of the policy are operative
As a general rule what are the 7 basic structure for all general policies incorporate
- Heading
- Recital clause
- Signature
- Operative clauses
- Exceptions
- Conditions
- Info and facilities
What is the recital clause
The coming together to form the contract.
What 3 things will the recital clause contain
- Policy conditions
- A claim being rejected
- Proposal confirmation
Why must the insured check the proposal confirmation
Failure to provide correct info can result in:
- Policy being invalidated
- Claim being rejected
- Claim not being paid in full
What are the operative clauses in regards to policy documents
They describe the scope of the cover in detail outlining cover
How are conditions stated in policies
Either implied or express
What 4 things does it mean by implied conditions under policy documents
The insured must:
- Act if uninsured
- may be required to advise the appropriate authorities
- Must take reasonable action (I.e attempt to distinguish a fire)
- Must not hinder insurers in their investigation of a claim
What is the difference between implied and expressed conditions
Implied conditions exist whether or not they appear in the policy
Express conditions are included in the policy wording
What 10 things are included in a policy schedule
- Insureds name
- Insurers address
- Policy period
- Premium
5: details of the subject matter - Sum insured or limit or liability
- Territorial limits
- Policy number
- Any special exclusions conditions etc
- Operative sections of the policy
What is meant by the term market exclusions
These are general exclusions common to all insurance policies
Why are war and related perils excluded
They are considered to be a fundamental risk applying to the community at large and therefore uninsurable
What is pool Re
A mutual reinsurance policy that offer all risks perils to terrorism
What is the only way pollution can be covered under PL policies
Must not be a gradual operating cause and has to be a sudden identifiable event
What is a marine policy exclusion
Exclusion is standard in all property insurance policies for material damage to the property
What is contractual liability an exclusion of
All motor and liability policies
What is the alteration policy common condition
Found in most property insurance policies- duty of fair presentation to notify of any changes
What is the action by the insured in the event of a claim common condition
Sets out the procedures to be followed in the event of a claim
What is the fraud policy Common condition
In the event of any fraudulent, false or exaggerated claims being made:
- The policy may be cancelled
- Claim may be rejected
- Insured may retain any premiums paid
What is the reasonable precautions common condition
The insured must minimise the risk of loss or damage
What is meant by the average condition
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
What is the subrogation common condition clause
It’s the right of the insurer to take over he insurers rights following payment of a claim
What is the arbitration common condition
It’s intended to deal with any disputes or hat arise as to the amount to be paid in settlement of a claim
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 pro rata refund
