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IF2 Flashcards > Chapter 3 - Package Policies > Flashcards

Chapter 3 - Package Policies Flashcards

1
Q

what does homogeneity of risks mean?

A

the situation where many risks share characteristics and follow similar trends

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2
Q

what are the 2 ways of settling household claims?

A
  1. indemnity
  2. reinstatement
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3
Q

how does indemnity work for household claims?

A

a deduction is made for wear and tear - the amount paid is the amount it would cost to replace the item with something the same age and same condition

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4
Q

how does reinstatement work for household claims?

A

the full cost of replacing the item as new is paid - most insurers make a deduction for wear and tear and sometimes if sums insured are inadequate

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5
Q

what should the building sum insured represent?

A

the rebuild cost at the time rebuilding is complete

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6
Q

in the terms of household insurance, how is building defined?

A

the main structure of the private dwelling including garages, sheds, greenhouses and other outbuildings (anything that would be left behind when moving)

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7
Q

what are example of perils on buildings?

A

fire, lightning, explosion and earthquake, riot and malicious damage, storm/flood, falling trees, escape of water and theft

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8
Q

what cover is usually excluded for unoccupied buildings?

A

loss or damage while the building is unfurnished or unoccupied for more than 30 - 60 days

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9
Q

what is excluded under storm/ flood?

A

damage caused by frost, subsidence and damage to gates, fences and hedges - always has an excess

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10
Q

what does falling trees cover exclude?

A

damage to walls, gates, fences and hedges

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11
Q

what does escape of water cover?

A

bursting or over flowing of water tanks and pipes and includes any fixed domestic water and heating installations, washing machines and other equipment

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12
Q

what does escape of water exclude?

A

damage while the building is unfurnished or unoccupied for more than 30 - 60 days

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13
Q

what does escape of oil cover?

A

escape of oil from any fixed oil fired heating system

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14
Q

what does impact cover include?

A

impact or collision from aircrafts/ aerial devices, road vehicles or animals

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15
Q

what does impact cover usually exclude?

A

damage by pets

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16
Q

what does subsidence/ ground heave slip exclude?

A

loss or damage caused by:

  1. normal shrinkage or settlement
  2. coastal or riverbank erosion
  3. demolition or structural repair
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17
Q

what is usually the excess for subsidence?

A

£1k

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18
Q

what does accidental breakage of glass and sanitary fixtures include?

A

accidental breakages of fixed glass in windows, doors, skylights, conservatories etc that form part of the building also includes baths and other sanitary fittings

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19
Q

what is legal fees and architects/surveyors fees and cost of debris removal cover?

A

covers reasonable legal fees incurred in the reinstatement of the building and also the removal cost of clearing debris

20
Q

what is loss of rent cover?

A

cover provided in respect of ground rent for a max of 2 years and loss of rent for any part that becomes uninhabitable

21
Q

what can loss of rent also include?

A

reasonable costing alternative but similar accommodation while the premises is uninhabitable - usually capped at 10/15% of building sum insured

22
Q

what is the accidental damage extension?

A

most insurers offer this subject to a higher premium rate and subject to an excess

23
Q

what does the accidental damage extension exclude?

A

damage whilst property is let, wear and tear, damage caused by pets and vermin

24
Q

how is contents defined?

A

household goods and personal effects belonging to the insured or family member living in the property

25
Q

when is theft or attempted theft of cash usually excluded under contents?

A

if there is no forcible and violent entry/ exit

26
Q

what is typically covered automatically under contents insurance?

A
  1. temporary removal
  2. clothing or personal effects
  3. accidental breakage
  4. home office equipment (usually 5k limit)
27
Q

what is a ‘single article limit’

A

no picture/art, jewellery etc will be treated as a greater value than 5% of the building sum insured or than a fixed amount

27
Q

what is a ‘valuable limit’

A

the total value of precious metal jewellery may be restricted to 1/3 of the total contents sum insured

28
Q

what exclusions normally apply to contents insurance?

A
  1. property insured under another policy
  2. motor vehicles
  3. livestock
  4. medals/ coins (unless specifically insured)
28
Q

what extensions are available for contents insurance?

A
  1. accidental damage to entertainment equipment
  2. accidental damage while in the course of removal
29
Q

what limit applies to accidental injury and accidental damage to material property?

A

a limit of indemnity of £2 million applies to any one claim

for employers legal responsibilities limit is at least £10 million

30
Q

what is an ‘all risks’ basis?

A

property is insured against any peril that is not specifically excluded

31
Q

what is the definition of unspecified items?

A

cover is provided away from the specified adress

31
Q

what are specified items?

A

items which exceed the unspecified single article limit or to which special terms apply - the sum insured should represent the replacement value

32
Q

what are the exclusions for personal possessions?

A
  1. wear, tear and depreciation
  2. corrosion
  3. mechanical and electrical breakdown
32
Q

what is the general limit of bicycles unless the value is specified?

A

£500 - £1000

32
Q

what does the money extension include?

A

‘all risks’ cover that is wider than under the standard contents sections - includes accidental loss

33
Q

what cover is generally excluded on bicycles?

A
  1. loss or damage to parts/ accessories
  2. used for competitive events
  3. theft whilst left unattended
34
Q

what are some risks covered by travel insurance?

A

cancellation charges, injury, death, medical fees following illness and loss of personal possessions

35
Q

is there a standard market wording for travel policies?

A

no

36
Q

what does baggage cover include?

A

loss or damage to personal baggage - sum insured is usually between 1-2k

37
Q

what does loss of deposits cover mean under a travel policy?

A

provides reimbursement of deposits and payments due to necessary and unavoidable cancellation beyond their control

38
Q

what does travel interruption cover?

A

failures of public transport to deliver the insured to the departure point

39
Q

in commercial insurance, who do package policies cater for most?

A

small businesses

40
Q

what property is covered under commercial package policies?

A

almost everything in the premises including stock

41
Q

what is business interruption?

A

cover for loss of trading profit and increases in the cost of working due to an interruption caused by an insured peril

IF2 Flashcards (13 decks)

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