Chapter 3 - Package Policies Flashcards
Household Insurance
Covers the building and it’s contents.
The two options to settle a claim where the item is irreparable is Market value or New for Old.
The sum insured buildings should represent the rebuilding cost at the time the rebuilding is complete.
Some insurers offer full package policies while others offer limited cover with optional extras. These policies are subject to an overall excess or to differing levels of excess for different contingencies covered.
Building Insurance Cover
Generally covers:
• Fire, lightning, explosion and earthquake
• Riot, civil commotion, strike, labour or political disturbances, malicious damage or vandalism
• Storm or flood
• Falling trees or branches
• Escape of water
• Escape of oil
• Theft or attempted theft
• Impact or collision
• Subsidence, ground heave or landslip
• Breakage or collapse of TV or radio aerials
• Accidental damage to drains, pipes, cables or underground pipes
• Accidental breakage of glass and sanitary fixtures
• Legal fees, architects’ and surveyors’ fees, cost of debris removal
• Loss of rent
• Accidental damage extension
Building definition
The main structure of the house including garages, sheds, greenhouses, swimming pools, walls, gates, fences and paths.
As well of anything normally left behind when moving house like fitted kitchens, electrical fittings and double glazing.
Contents Insurance Cover
Perils covered are basically the same as the buildings section as well as:
• Theft or attempted theft of cash and stamps, generally excluded if it doesn’t involve forcible and violent entry or exit.
• Theft or attempted theft by deception is excluded, unless the only deception used is to get in the home.
• Theft or attempted theft while the building is lent, let, sub-let, or if the building is unfurnished, is excluded if it doesn’t involve forcible and violent entry or exit.
• Accidental damage but clothing, money, stamps, plants, food and sports equipment are excluded.
Contents definition
Household goods and personal effects belonging to the insured living in the property. Including cash and stamps (not part of a collection), and any fixtures and fittings. Schedule will show applicable limits.
Contents Insurance Limits
Single article limit - No work of art, stamp collection, precious metal, jewellery or fur will be treated as being greater than, say, 5% of the total contents sum insured, or than a fixed amount of, say, £1,500.
Valuables limit - The total value of articles of precious metal, jewellery or fur may be restricted to, say, 1/3 of the total contents sum insured.
Contents Insurance - Automatic Cover
These are automatically included and not subject to an AP: • Temporary removal • Clothing and personal effects • Accidental breakage • Loss of rent • Home office equipment
Contents Insurance - Optional Extensions
Cover may be extended to cover these subject to an AP:
• Accidental damage to sports equipment
• Accidental damage while in the course of removal
• Loss of oil or metered water from a fixed domestic water or heating installation or washing machine
• Cost of replacing door locks following theft of keys
• Temporary increases in sums insured at certain times of year
• Personal effects while children are at university
Contents Insurance - Specific Exclusions
- Property more specifically insured under another policy
- Deeds, bonds, bills of exchange, promissory notes, cheques, securities, documents and manuscripts
- Medals and coins
- Motor vehicles
- Livestock other than horses
Legal Liability: Building and Contents
All household policies include specific liability cover as part of basic cover.
Buildings:
• Liability incurred by the insured as owner of the property
• Liability incurred under the Defective Premises Act 1972
Contents:
• Occupier of the property
• A private individual for personal liability
• As an employer of domestic employees
Cover is for legal liability for accidental injury and accidental damage to material property.
Household Optional Extension - Personal Possessions
Items which are regularly taken out of the property can be covered on an all risk basis. Cover usually only available in conjunction with contents cover. Insurers insist upon a separate sum insured for specified items above a certain sum, but are happy to cover unspecified items subject to a limit for any one item.
Exclusions:
• Wear and tear, depreciation
• Insects or vermin
• Corrosion, rot, fungus or atmospheric conditions
• Any process of heating, dyeing, alteration or derangement
• Official confiscation or detention
• Deeds, bonds, documents
Household Optional Extension - Money and Credit Cards
Money:
Provides all risk cover for accidental loss of cash, cheques, postal orders, premium bonds, gift tokens and travel tickets. Limit of indemnity of between £200 and £500, and an excess of £100. Exclusions include; shortages due to error/omission, and losses not reported to police within 24 hours.
Credit Cards:
Covers financial loss following loss or theft of a credit cards, cheque cards and cash cards. Loss needs to be reported to the card issuer and police within 24 hours of discovery. Exclusions include; unauthorised use by one of the insured’s household, and breach of issuer’s terms and conditions.
Household Optional Extension - Bicycles
General limit of between £500 and £1,000 per bicycle unless the value is specified. Exclusions include; loss or damage of parts or accessories unless the bicycle is damaged as well, use for competition, and theft while unattended.
Household Optional Extension - Freezer Contents
Covers for deterioration of freezer contents due to a change in temperature or contamination due to accidental escape of refrigerant. Limit of indemnity of around £1,000. Exclusions include; fire, lightning or explosion damage, wilful or deliberate act of the insured, and damage after the freezer has reached e.g. 15 years old.
Household Optional Extension - Caravans
Covers for:
• Caravan equipment on all risks of accidental loss or damage to caravan.
• Clothing and personal effects on all risks while the property is in the caravan.
• Legal liability for bodily injury or damage to property
Cover applies anywhere in the UK and extends to 2 or 3 months in the EU. Exclusions include; wear and tear, business use, and hire or reward.
