Chapter 3- Package Flashcards
Why are package policies sufficient homogeneity of risks
Homogeneity of risks refer to the situation where many risks share similar characteristics and follow similar trends
What are the benefits of package policies
It reduces administrative work to issue standardised wordings and charge a single premium for all classes. The savings are passed on in the form of reduced premium levels
What are the two options for settlement or household claims
Indemnity (or market value) a deduction is made for wear and tear. The amount paid is that required to replace the item with a replacement of the same age and in the same condition
New for old (reinstatement)
What is included under ‘buildings’
The private dwelling including garages, sheds, greenhouses and other outbuildings, swimming pools, tennis courts, walls, gates, fences and paths.
I.e anything that can’t be moved
What is covered under buildings on a package policy
Fire, lightning, explosion and earthquake
Riot, civil commotion
Storm or flood
Falling trees or branches
Escape of water
Escape of oil
Theft or attempted theft
Impact
Subsidence, ground heaven or landslip
Breakage or collapse of television or radio revering aerials
Accidental damage to drains, pipes, cables
Accidental breakage of glass and sanitary fixtures
Legal fees, architects
Loss of rent
Non automatic extension I.e accidental damage
What are the key exclusions from the cover provided for subsidence, ground heave and landslip under a household buildings policy
Normal shrinkage or settlement
Faulty workmanship or design
Demolition or alteration
Coastal or riverbank erosion
Movement of floor slabs
Outside items etc like pools
Under what section are radio and television aerials covered
Contents
Are cash and stamps covered under contents?
Yes but not part of a stamp collection
What are the perils covered under a contents section
Same as buildings except:
Theft or attempted theft of cash, currency, bank notes and stamps generally excluded unless it involves forcible and violent entry or exit
Theft or attempted theft by deception is normally excluded
Theft or attempted theft where the building is lent, let or sub let is excluded unless it involves led forcible and violent entry or exit
Accidental damage cover which may be added
Under contents insurance what is not covered under accidental damage
Clothing, contact lenses, money, stamps, coins, medals. Plants, food and drink, sports equipment and bikes
What are the two limits within contents insurance
Single article limit (usually 5% of the total contents sum insured or no more than a fixed amount say £1,500)
Valuables limit (usually one third of contents sum insured)
What are the 4 elements of cover that are usually automatically covered under contents
Temporary removal- extends to things taken out of the home. Theft or attempted theft is only covered if it’s being taken to a bank, in a building where the insured/ family are temp residing or in the course of removal
Clothing and personal effects- domestic staff minus cash
Accidental breakage
Loss or rent- usually 10-20% of the contents sum insured
Under contents insurance what are the two non automatic extensions
Accidental damage to entertainment equipment
Accidental damage whilst in the course of removal
Under contents insurance what are the 4 specific exclusions
- Property more specifically insured under another policy
- Deeds, bonds, documents and manuscripts
- Medals and coins
- Motor vehicles
- Livestock- other than horses
What is the legal liability for buildings under package
Liability incurred by the insured as owner of the property under the Defective Premises Act 1972 for faults in property
What is the legal liability for contents under package
Protects interest of the insured as:
Occupier rather than owner of the property
A private individual for personal liability
As an employer or domestic employees
Where does legal liability cover under buildings and contents and for how much
Cover is for legal liability for accidental injury and damage to property anywhere in the UK for around about £2 million
What is all risks optional extension in respect to household policies
Covers personal possessions taken outside the property. Single article limit for unspecified items usually about £100 to £500
What are specified items in respect to all risks cover on household policies and what are the exclusions
Anything that exceeds the single valuable article limit.
Exclusions are:
Wear and tear Insects or vermin Corrosion, Rot Any process of heating, dyeing, alteration or repair Mechanical or electoral breakdown Scratching, denting, faulty workmanship Official confiscation Deeds, bonds, documents
What includes money cover on household policies
All risks cover usually covers cash, cheques, postal orders, bankers drafts, postage stamps/ Certs, premium bonds, luncheon vouchers, gift tokens and travel tickets
What does cover relate to on money on household policy
Accidental loss of money and a limit it indemnity between £200- £300 applies with an excess of £50
What are the 2 specific exclusions for money cover on household policies
Shortages due to error or omission
Losses not reported to the police within 24 hours
What is a standard condition of credit card loss or theft under household
Must be reported to the card issuer and police within 24 hours of discovery
What do credit cards cover under household
Included cheque cards, cash cards and charge cards as well as credit limit of liability £500
Under household what are the two exclusions for credit card cover
- Unauthorised use of the credit card by someone in the same household
- Beach of the insurers T&C
What cover are bicycles covered on on a household policy
All risks basis
What is the way bicycles are insured on a household policy
Either a separate sum insured per cycle or a limit per cycle or between £100 and £500 for all cycles owned by the insured and family
Excess of £25- £50 is typical
What are the 3 exclusions of bicycles under household
Loss or damage to parts unless the cycle is damaged at least he same time
Use for racing, pace making it trials
Exclude theft in certain circumstances unless in a locked building etc
When a whole family is involved in cycling on a household policy what happens
Special terms can be agreed as a significant sum to be insured
What are the two reasons insurers cover freezer contents on household policies
Change in temp due to power failure
Contamination as a result of accidental escape of refrigerant fumes
Limit of indemnity usually £300
What are the 4 specific exclusions to freezer contents on a household policy
- Fire, lightning but or explosion damage
- Deliberate restriction of supply by supplier
- Wilful or deliberate act of the insured
- Damaged after the freezer is old
What are the three sections of cover for caravans under a household policy
Caravan and equipment- all risks basis
Clothing and personal effects whilst property is in caravan
Liability- legal liability for bodily injury or damage caused by the caravan
What are the 5 exclusions to caravans under household
- Wear and tear
- Theft whilst left unlocked or unattended
- Hire or reward
4 business use - Storm of flood damage to an awning
What are small crafts
Defined as vessels not exceeding 16 feet and with design speeds not exceeding 17 knots
What 4 sections of cover are applicable to small crafts under household
- Accidental loss or damage to craft, machinery and equipment
- Personal effects
- Salvage charges
- Liability to third party and passengers
What 3 parts of cover is excluded for small crafts under household
- Hire and reward
2, liability to injury to employees
- Theft of outboard motors gears etc
Under sports equipment on household what are the 8 exclusions
1, motor vehicles, trailers, caravans and boats
- Damage whilst equipment is in use
- Living creatures
4 non specialist sports clothing
5 pedal cycles
6 golf balls
7 camping equipment
8 equipment for hazardous pursuits
What is covered under personal accident, hospital cash benefit and crediter insurance on household
Credit instalment payments or mortgage in the event of redundancy
How are horses covered under pets on household
Cover includes death from accident sickness or disease, personal accident to the rider, third party liability and damage to horsebox trailer
How are cats and dogs covered under household
Vet fees Accidental death Loss by theft Kennel fees Advertising and reward Third party liability Holiday cancellation
Under household what 4 things are covered under legal expenses
- Recovery costs
- Civil defence costs
- Prosecution defence costs
- Employment dispute costs
What are the 4 specific exclusions for legal expenses on a household
1, claims relating to events occurring outside GB
- Fines and compensation payments
- Costs and expenses not agreed by the insurer
- Claims arising out of the insurers business
What 3 ways for identity fraud section of a household policy provide cover for expenses incurred by the insured in respect of:
- Administration fees for reapplying for a loan previously refused due to incorrect data at a credit agency
- Attendant costs such as loss of earning arising from taking time off
- The cost of notarising necessary documentation
Overall limit in region of £12,000
How long do travel insurance policies last for
Maximum of three months
Under a travel policy what are the personal accident benefits
Between £10- £20,000 provided for death, loss of eyes or limbs or permanent total disablement following an accident
Death penalty usually reduced for children under 16 years
Under travel what are the 4 medical expenses covered
- Medical treatment such as surgical fees, hospital charges and emergency dental treatment
- Additional hotel/ travel expenses
- Additional cost of bringing home the patient
- Additional expenses of those in the insureds party
What is usually the limit for medical expenses under travel
£10 million
Under travel what are the 5 sections to loss of deposits
Death, illness of the insured
- Jury service
- Unemployment through redundancy
- Unforeseen accumulation of work
- Theft or fire at home or work
Under travel what are the limits for baggage and personal effects and money
Between £1,000 to £2,000 with a single article limit of £250
What is the limit of indemnity for personal liability under travel
£500,000 to £1 million
Under delayed baggage on travel what is the period of time to be delayed and what is the sum insured allowed
Minimum of 12 hours
£50 per person
Under travel how much provides a hospital cash benefits
Daily benefit or £10 to £15 subject to a limit of £200 to £600
What is travel interruption on a travel policy
Failure of public transport to deliver the insured for around £300 per person
What is travel delay cover in respect of travel insurance
Delay to the aircraft/ ship etc for at least 12 hours
£20 for the first 12 hours and £10 for each 12 hours afterwards
What are the 4 optional extensions on travel insurance
- Failure of tour organiser up to £1,500
- Lack of services/ amenities- £20 a day max £200
- Loss of passport- £100 to £250 limit
- Legal expenses- between £3,000 to £50,000
What are the 4 exclusions on travel policies
- Death, bodily injury caused by drugs or booze
- Loss of luggage cause by confiscation
- Damage to fragile objects
- Terrorism
What is the property covered under a package commercial policy
Contents Stock Fixtures and fittings Internal decorations Building cover
Under package commercial policies what are the 10 risks covered
- Fire and additional perils
- Business interruption
- Theft
- Money
- Glass
- Assault
- Goods in transit
- EL
- Public liability
- Product liability
Under commercial package policies what are the risk limits for money
typical limited £1,000 in safe or transit.
£750 under business hours in a locked safe,
after Business hours in insured home £250-£500
What are the 3 optional expenses for commercial package policies
- Refrigerated stock
- Business ‘all risks’
- Legal expenses
