Chapter 4- Property Flashcards
What does a standard fire policy do
Provides compensation to the insured in the event of damage
What does DAMAGE mean in respect of standard policy cover
Loss or destruction of or damaged to the insured
For a fire peril covering damage what 3 things are excluded
- Explosion resulting from fire
- Earthquake or subterranean fire
- Own spontaneous fermentation
How is explosion covered under a fire, lightning and explosion peril
Restricted to explosion or boilers or gas used for domestic purposes only
What are 4 special perils in relation to property
1 perils of a chemical type- explosion, spontaneous fermentation or heating
- Social perils- riot, civil commotion
- Perils of nature- storm, flood; earthquake
- Miscellaneous perils- escape if water, aircraft, impact
What must special perils do in respect if property
Must result in damage
What are the 4 exclusions of explosion cover under a standard fire section of the policy
1 explosion of the insureds own steam and other pressure vessels that are subject to inspection
- Fire resulting from explosion
- Domestic explosion
- Pressure waves to on sonic aircraft
Under property damage what is covered for aircraft
Damage caused by the crashing or an aircraft and articles dropped by the aircraft
Under property what is cover for damage caused by riot and civil commotion
Strikers
Locked out workers
Malicious persons
Labour disturbances
What are the 2 exclusions under riot and civl commotion under property
- Cessation of work
2. Confiscation, requisition or destruction by order of the government
Under property what is the 2 exclusions for malicious damage
Arising from theft
Any building that is empty or not in use
An excess of at least £250 is always applied
Under property damage what are the 4 exclusions for storm damage
1, caused by the escape o water of any. Natural water cause
- Resulting in a change in the water table level
- Caused by lightning, frost, subsidence, ground heave or landslip
- To moveable property like fences
Under property what is the excess for storm and flood cover
At least £100 and very often £250
Under property damage what is escape of water and what are the two exclusions
EOW from tanks, apparatus or pipes
Exclusions
1: by damage by sprinkler
2, to an unoccupied building
What is impact peril in relation to property
Restricted to losses resulting from vehicles or animals owners by third parties
What are the two exclusions for sprinkler leakage under property damage
- Freezing whilst the premises are empty
2. Explosion; earthquake, subterranean fire
Under property damage what are the 4 exclusions to subsidence, ground heave and landslip
- Damage to yards, car parks, roads, pavement, gates fences
2, caused by a be new settlement of new structures
- Origination prior to inception of the policy
- Resulting from demolition, repair, ground works
For fire and special perils policy what are the 9 standard market exclusions
- Riot or civil commotion
- War risks
- Radioactive contamination
- Northern Ireland
- Terrorism
- Pollution
7: marine polices - More specifically insured clauses
- Consequential loss exclusion
What is an all risks insurance cover
The ABI has declared it as a policy that covers accidental loss or destruction of or damage to the property insured
Under an all risks policy what are the ABSOLUTE exclusions
War, terrorisim, marine, Northern Ireland, nuclear
Under an all risks policy which exclusion can be added with careful underwriting
Corrosion, rust, change in temperature, malicious damage in respect of empty properties
Under an all risks policy which exclusions can be written into a policy
Money, jewellery, glass, computers, goods in transit, theft, subsidence
Under an all risks policy which exclusions are better placed elsewhere
Motor vehicles, watercraft, aircraft, livestock
Under all risks insurance what does it mean by being insured On a first loss basis
Usually for theft, storm, flood, sprinkler leakage and impact on the basis that total destruction by the perils insured is very unlikely
What does the Theft Act 1968 state
A person is guilty of theft if they dishonestly appropriate property belonging to another with the intention or permanently depriving the other of it
What is the standard policy cover policy wording for Theft
Theft involving entry to or exit from the premises by forcible and violent means
What 3 things are excluded under theft
- If access was gained with a key
- A trick
- Hiding on the premises
Under theft what happens when a particularly hazardous risk is involved such as a jewellery shop
Theft following forcible and violent entry
What are the 4 optional extensions to theft insurance
- Breakage or glass
- Replacement of locks
3 temporary removal
- Index linking
What three extensions of cover can be added to a theft policy for an additional premium
Collusion
Extended or full theft
Robbery and aggravated robbery
What are the 4 exclusions to theft insurance
1, collusion
- Fire and explosion
- Cash and bank notes
- Livestock
What cover is theft insurance based on
First loss basis
For theft of shop stock to be covered under a standard theft policy there would only usually need to be
Forcible and violent entry or exit
Under glass insurance what is the standard policy cover
Damage to all fixed glass on an all risks basis
Usually dealt with replacement
What are the 2 optional extensions to glass insurance
- Damage to shopfront contents as a result of broken glazing
- Damage to washbasins and sanitary fittings in hairdressing salons
What is the standard policy boxer for money insurance
All risks basis or loss or destruction of or damage to money
Under money insurance what are the 8 situations covered
- In transit
2 on the insureds premises
- In a bank night safe
- In a locked safe or strong room
- On the insureds premises out of business hours and not in a safe
- In the private residence or an employee
- In the custody or collectors
- In the custody or a professional carrier
What does it mean by money insurance being on an adjustable basis
It requires a declaration of actual carryings at the end of each period of insurance
Under money insurance what are the 2 typical extensions of cover
Personal accident assault
Credit cards
What are the 4 limitations to money insurance
Loss due to an error or omission in accounting
Loss due to the dishonesty of an employee not discovered within 7 days
Loss outside GB
loss resulting from the safe or strong room being opened by a key
What is the limit of money insurance for money in transit
£5,000
A haystack in a farmers field suddenly bursts into flames. Before the fire brigade has time to reach the field, the fire has spread to a neighbouring haystack on the farm. The flames are also carried by the wind into the farmers barn.
What would be covered by the standard fire policy?
The standard fire policy would cover damage to the neighbouring haystack and the barn, but not damage to the first haystack.
If an excess of £250 applies to a policy how much would the insurer pay in the following circumstances?
A) a claim for £235
B) a claim for £375
A) the insurer would pay nothing as the claim is below the level of the excess
B) the insurer would pay £125 (ie £375 - £250 excess)
Why does escape of water specifically exclude damage that occurs while the premises are empty?
The exclusion reflects the greater risk of freezing in an up heated building in the winter and the aggravation of loss that may occur following delayed discovery in unoccupied premises
For theft of shop stock to be covered under a standard theft policy, there would on usually need to be? A) forcible and violent entry or exit B) forcible and violent entry and exit C) forcible or violent entry or exit D) forcible or violent entry and exit
A
Remember the theft act1968 which gave a wider definition of theft than that which insurers were prepared to cover.
Think back to what we said about theft insurance in section c in this chapter. Why is money not included in a theft insurance policy?
In the case of theft insurance, most losses are subject to the restricted wording for forcible and/or violent entry/exit. If this were the case with money insurance, much of the risk involved in cash handling and transit would be removed, leaving mainly the ‘outside business hours’ element cover. Therefore, by its very restriction, a theft policy would serve a limited purpose only.
Assume that a money policy has a limit of £500 in respect of money left out of the safe on the insureds premises overnight? How much would the insurers pay for each of the following losses?
A) £300
B) £600
C)£750
The amounts payable are:
A) £300
B) £500 policy limit not subject to average
C) £500 policy limit not subject to average
What does the definition of money under a standard money policy NOT include? A) bank and currency notes B) lottery tickets C) luncheon vouchers D) postage stamps E) postal orders
B ) lottery tickets
What are the three perils covered by the standard fire policy?
Fire
Lightening
Restricted explosion
What are the four broad headings for special perils?
Perils of a chemical type
Social perils
Perils of nature
Miscellaneous perils
‘All risks’ exclusions may be devised into four groups or headings. What are these headings?
Those exclusions which are absolute Those exclusions which relate to an aspect of cover which could be written into the policy with care Those exclusions which relate to an aspect of cover which could be written into the policy Those exclusions which relate to property or risks more appropriate to another class of insurance
How have insurers amended the theft wording, as defined in the theft act 1968?
Insurers have amended their theft wording under their commercial theft polices to cover ‘theft involving entry to or exit from the premises for forcible and violent means’
What is one optional extension to a standard glass policy?
Answer should include;
Damage to shopfront contents as a result of broken glazing
Damage to washbasins and sanitary fittings in hairdressing salons
What, in one sentence, is the cover generally provided under a stand money policy?
Money insurance is on an ‘all risks’ basis, covering loss from any cause, whether it is in transit or on premises, subject to agreed limits.
What are two optional extensions to a standard money policy?
Credit cards
Personal accident assault risk
