Chapter 11: Valid Claims and Claims Settlement Flashcards
What is the limitation period for a personal injury claim?
3 years.
What is the limitation period for a contract claim?
6 years.
What is the limitation period for a fatal injury/illness claim?
3 years (from date of death or the date which the cause of death is known).
What is the limitation period for a crime?
There are no limitations for crimes save for summary offences (which have a six month limitation period).
On who does the burden of proof rest in an insurance claim?
The insured to prove that an insured peril caused a loss.
What is an ex gratia payment?
A payment made with no admission of liability.
What might be required as supporting evidence to a motor claim where there is a total loss of the vehicle?
A vehicle registration document
What is contribution?
Where a loss is shared by the companies that insure it.
How is contribution calculated?
Sum insured by insurer / total sum insured * loss
What is average?
Where the insured has under-insured the risk and is required to proportionately cover the uninsured part of the risk.
What is the formula for average?
Sum insured / total value at risk * loss
What is the special condition of average (aka average relief clause)?
Average will only apply if the average percentage (i.e. sum insured / total value at risk) drops below 85%.
I.e when the value of the property has increased and so has the extent it is underinsured.
What is subrogation?
The right of an insurer to pursue part of the loss from a causal third party. Only when the insured has been fully indemnified.
What is the ABI personal effects contribution agreement?
An agreement with insurers to waive contribution rights for small contribution claims.
What does the ABI personal effects contribution agreement state about motor claims?
Claims for personal effects damaged in an accident will be covered by the insurer the claim is made against.
What does the ABI personal effects contribution agreement state about all other claims?
The insurer has contribution rights so long as the amount it is trying to get is more than £200 and the other insurer is not a motor insurer.
What are the two agreements the Motor Insurance Bureau operates under?
- Uninsured drivers agreement
- Untraced drivers agreement
What is a bilateral agreement?
Where two insurers in a similar market will agree contribution arrangements with each other.
E.g. Motor Insurance Subrogation Portal
What is the uninsured drivers agreement?
Where the MIB steps in to settle the claim if the insurer has not paid the claim due to a breach of their terms.
No excess applies.
What is the untraced drivers agreement?
Where there is a ‘hit and run’ instance. The MIB will pay the claim if on a balance of probabilities the untraced driver would be liable to pay.
A £300 excess applies.
What are the five methods of claims settlement?
- Payment of money
- Paying for repairs
- Replacement
- Reinstatement
- Payment to third parties
What happens if the property is subsequently recovered after the insured has been indemnified.
The insured can take it back and pay the money back to the insured.
They can refuse though, in which case the insurer can sell the property.
What can the insurer do in the event of a fraudulent claim?
Void the contract, refuse to pay the claim and refuse to pay any subsequent claims.
They will still be liable for claims before the fraud.
What are the three bodies involved in preventing insurance fraud?
- Insurance Fraud Bureau (IFB)
- Insurance Fraud Investigators Group (IFIG)
- Insurance Fraud Register (IFR)
What is the Claims and Underwriting Exchange?
A computerised register of the claims history of different claimants.
What is the ALR?
Art Loss Register.
What is the Motor Insurance Anti-Fraud and Theft Register (MIAFTR2)
A directory of total loss and theft claims for motor insurance.
How soon must an insurer notify the motor database?
- 7 days for private motor
- 14 days for commercial motor
What does the Insurance Fraud Register contain details of?
Details of policyholders, third parties and suppliers if they’ve acted fraudulently towards an insurer.
