Chapter 5

Question 1

What does the RTA 1988 say about motor insurance?

Answer 1

Illegal to drive / in charge of a vehicle on a public road without insurance for TTPD and TPI
Road = where public has access

Question 2

What are the four levels of cover for motor insurance?

Answer 2

• RTA
• TPO
• TPFT
• Comprehensive

Question 3

What is RTA cover?

Answer 3

Unlimited bodily injury/death TP and £1.2m TTPD
Third EU directive - minimum cover country vehicle used or registered whichever higher

Question 4

What is TPO cover?

Answer 4

£20m TTPD limit, indemnity to insured’s employer if business use, passenger liability

Question 5

What is TPFT cover?

Answer 5

Cost of repair/replacement if vehicle stolen, damaged during theft or attempted or damage from fire, lightening or explosion

Question 6

What is comprehensive cover?

Answer 6

Includes other accidental and malicious damage
Excludes wear and tear, depreciation, mechanical and electrical failure and tyre damage

Question 7

What are the optional extensions for motor insurance?

Answer 7

For an AP
Breakage of glass (non comp), personal effects, courtesy car, breakdown, legal expenses, EU cover, trailers

Question 8

What is motorcycle cover?

Answer 8

Same as private car but:
- No cover theft parts/accessories unless motorcycle also stolen
- No indemnity for employers
- No personal accident, medical expenses or personal effects

Question 9

What is health insurance?

Answer 9

• Personal accident - payment in event of accidental death or bodily injury
• Sickness cover - payment for disablement due to sickness
• Medical expenses - cover for treatment outside of NHS

Question 10

Outline personal accident and sickness cover

Answer 10

Benefit policy - pay sum of money when defined event occurs whether or not financial loss
Has an operative time of over eg during occupation
Private or group
Purchased as stand alone or add on
Cover limited to ages 16-65

Question 11

What are the personal accident benefits?

Answer 11

Lump sum payable in event of:
- Death
- Loss of limbs, eyes, sight or hearing (permanent and total and within agreed period)
- PTD
- PPD
- TTD
- TPD

Question 12

What is PTD in personal accident and sickness?

Answer 12

Permanent total disability
Condition where recovery not anticipated eg paralysis

Question 13

What is TTD in personal accident and sickness?

Answer 13

Temporary total disablement
Serious injury unlikely result on PTD, weekly benefit paid up to limit

Question 14

What is PPD in personal accident and sickness?

Answer 14

Permanent partial disability
Permanent injuries that prevent insure from returning to relatively normal life eg loss of figure - use pre-set scale to determine payment eg 20% of death payment

Question 15

What is TPD in personal accident and sickness?

Answer 15

Temporary partial disability
Injury that results in insured unable to performant substantial part of their job

Question 16

What are the standard exclusions for sickness cover?

Answer 16

• Influence of alcohol
• Self inflicted injury, disease or suicide
• Childbirth, pregnancy, venereal disease, HIV
• Pre-existing illness
• Accidents while motorcycling, racing, winter sports or mountaineering

Question 17

What does medical expenses provide?

Answer 17

In patient covering including hospital charges, specialist fees and additional costs
Exclusions - long term residential care and pre-existing conditions

Question 18

What is household insurance?

Answer 18

Combines house and contents and damage from fire/other perils

Question 19

What is buildings insurance?

Answer 19

Main structure, garage, shed, greenhouse or anything normally leave when moving

Question 20

What perils are covered under buildings insurance?

Answer 20

• Fire, lightning, explosion and earthquake
• Riot, civil commotion, malicious damage and vandalism
• Storm or flood
• Falling trees
• Escape of water and oil
• Theft or attempted
• Impact from aircraft, vehicles or animals
• Subsidence, ground heave or landslip
• Damage to drains, pipes, cables
• Breakage of glass and sanitary fixtures

Question 21

What is contents insurance?

Answer 21

Household goods and personal effects of insured or family members living in the property
Includes cash / stamps £50-100
Limits on single articles of value eg 5% total sum insured

Question 22

What are the differences between buildings and contents insurance?

Answer 22

Contents:
- Theft / attempted may be excluded in no forcible and violent entry or exit
- Accidental damage for certain contents are excluded eh clothing, plants

Question 23

What extensions can be included in contents insurance for an AP?

Answer 23

• AD to entertainment equipment in course of removal
• Replacement locks after keys stolen

Question 24

What extensions are automatically included in contents insurance?

Answer 24

• Temporary removal (in British Isles)
• Clothing and personal goods of employees
• Accidental breakage of mirrors, glass and furniture
• Loss of rent

Question 25

What are extensions for household insurance?

Answer 25

• Personal possessions regularly taken outside property
• Money and credit cards
• Bikes
• Freezer contents
• Caravans
• Small crafts
• Sports equipment
• Domestic animals

Question 26

What is FloodRe?

Answer 26

Reinsurance company owned and managed by insurers, funded by levies on members
Only covers eligible properties - no businesses or properties built after Jan 2009

Question 27

What is travel insurance?

Answer 27

Cover personal accidents benefits, medical expenses, loss of deposit, baggage, personal liability, travel interruption and delay and hospital cash benefits
Exclusions include pregnancy, suicide, disability, confiscated luggage and fragile objects

Question 28

What is extended warranties insurance?

Answer 28

Extends period of time for free repairs for mechanical and electrical goods
excludes negligent handling, not following instructions and covered under household