Chapter 4 Flashcards
Think back to earlier studies, what rights does the subrogation clause give the insurer?
In pursuit of a claim against a liable third party the subrogration clause gives the insurer the right to stand in the place of the insured before paying the claim (this enhances its common law right to claim against the third party for monies already paid out to their insured.)
Why are personal accident and sickness policies always benefit policies rather than indemnity policies?
The loss of a limb or health is something it is impossible to put a financial value on. Therefore these insurances provide for the payment of a pre agreed set sum.
Why is an allowance for betterment subtracted from the indemnity sum?
The principle of indemnity states that the insured must be placed in the same financial position after a loss as they enjoyed before the loss. Such improvements to their property would increase the value of the property leaving the insured better off than before the loss. This is against the principle of indemnity.
Mr smith holds a motor policy with xyz insurers, and mr Smith collided with the wall of mr Jones’ property damaging it, ho would xyz proceed in settling me jones’ claim, assuming a valid claim?
Would be asked to submit estimates for the repairs. We would then consider the est and possibly negotiate settlement or authorise repairs to continue and request that they be invoices by the repairers directly.
What is settlement on a new for old basis?
New for old conditions are often contained in household contents policies and usually mean that damaged items under a certain age will be replaced with brand new items. No deduction for wear and treat is made in these circs.
What is the basis of settlement under an extended warranty claim?
The basis of settlement under an extended warranty policy would be the repair or replacement of the item concerned
Who would appoint a loss adjuster and who would pay their costs?
A loss adjuster is an expert in processing claims from start to finish is an independent professional qualified person who would be appointed by the insurer who pay their costs
What does is mean when a risk is underwritten in a claims made basis?
Provided a claim is made during a period of insurance, it does not matter where the event leading to the loss took place. (This should be contrasted with policies underwritten on a losses occurring basis, where the critical date is when the loss occurred).
What are the benefits of a helpline to insured?
Immediate access to services
A simplified claims process
Improved repair and replacement services
Faster claims settlement
What are uninsured losses?
Uninsured losses are losses than an insured may incur as a result of an insured event, but that are not covered by the insurance policy covering that event
