Chapter 7: Related Services Flashcards
What is a helpline?
An extra service provided by an insurer in which the insured can phone a freephone number 24/7 for emergency assistance and/or expert advice
What are some of the main examples of when a helpline may be offered by an insurer?
Private motor insurance for breakdown services
Household insurance providing emergency assistance or legal advice
Travel insurance to assist in a medical emergency by arranging treatment or repatriation or providing advice
What is an authorised repairer?
Contracted repairers that are preferred/recommended by the insurer
What are the main benefits of authorised repairers?
Competence - The insurer can guarantee the quality of the repair as sub-standard repairers would not be recommended
Cost - The insurer can usually negotiate reduced rates which lowers costs. These can be passed on to the consumer in lowered premiums
Convenience - It is convenient for both insurer and insured as the repair can begin more quickly
What line of business are authorised repairers most commonly used in?
Motor insurance
What is risk management?
The identification, analysis, and control of risks which could threaten the earning potential or assets of a company
What are the three steps of risk management?
Identification
Analysis
Control
In risk identification what is meant by the upside and downside of risk?
Upside is the failure to maximise opportunities
Downside is identifying currently existing threats and what threats may potentially exist in the future
What may assist with risk identification?
A survey
What is risk analysis?
Analysing past data in order to quantify and evaluate risk
What is risk control?
Attempting to reduce or possibly even eliminate the risk via action plans
What are the two types of risk control measures?
Physical controls
Financial controls
What risk control measures may insurers take?
Physical controls such as requiring the insured to have certain controls in place (eg a certain standard of lock or burglar alarm or sprinkler system)
Financial controls such as reinsurance and imposing an excess/deductible
What is the role of a risk surveyor?
Identify risks in order to make recommendations and provide advice to underwriters and insureds about what risks are involved and control measures to implement
What is an uninsured loss?
A loss which is not covered by an insurance policy
What is a no claims discount?
When an insured has not made a claim on their policy they may be given a discount to reflect this. Often the discount will increase with the number of claim free years
A policyholder is involved in a motor collision with a third party and makes a claim under his policy. He pays his £500 excess and his insurer pays him £2000 for his claim, but as a result he loses his no claims discount. His insurer later successfully subrogates against the third party’s insurance and recovers £2500. What is owed to the policyholder?
The insurer would reimburse the policyholder for his £500 excess
They would also reinstate his no claims discount and reimburse him any increased premium paid for the initial loss of his no claims discount
Who may assist in recovering uninsured losses?
Solicitors or specialist loss recovery firms
Sometimes insurance intermediaries may be involved
How would a legal expenses policy assist with uninsured losses?
They would indemnify the insured for any legal expenses incurred in trying to recover their uninsured losses
Who may an insured hire to help assist with presenting a claim?
A claims management company
What is a claims management company?
Specialist companies that help an insured pursue claims, acting as an intermediary on the insured’s behalf. Usually for personal injury
How are claims management companies reimbursed?
Usually on a no-win-no-fee basis
If the case is won the fee will usually be either a percentage of the settlement, a flat lump sum, or sometimes both
Who may an insurer appoint to help their insured with risk management?
A risk surveyor (also called loss control engineer)
What must the insured’s risk control measures be?
Economic
If an insurer agrees to take liability for a damage to a third party’s vehicle which has left it undriveable, what short term remedy will they usually take whilst the vehicle is being repaired?
Provide the third party with a suitable replacement at no cost
How are legal expenses policies normally sold?
In conjunction with another policy, normally motor
What must be true for a legal expenses policy to cover a claim for pursuing an uninsured loss?
There is a reasonable prospect of recovery
What is the usual limit of indemnity for a legal expenses policy that has been purchased in conjunction with a motor policy?
£50,000 - £100,000
