Household Insurance Flashcards
What is Household insurance?
A household insurance policy is bought by householders to provide protection for both the building itself and its contents.
How can this cover can be bought?
As one all-inclusive policy, but buildings cover and contents cover can also be bought as separate policies.
Question 2.3
A tenant who rents a property may only require contents insurance, because they have no insurable interest in the building.
True
What is a standard household policy?
No such thing as a ‘standard’ household policy, both cover and wordings vary depending on the customer’s choice and the cover offered by particular insurers.
What is building insurance?
Not only the main structure of the building, but also garages, sheds, greenhouses, outbuildings, swimming pools, tennis courts etc.
Anything you would normally leave behind on moving from the house is part of the building, e.g. double glazing, fitted kitchens and bathrooms.
True
building insurance
Fire, lightning, explosion and earthquake is covered
True
building insurance
Which cover USUALLY excludes loss or damage if the building is unoccupied for more than 30 or 60 days,
Riot civil commotion strikes Labour or political disturbances.
Malicious damage is USUALLY subject to an excess
True
building insurance
Storm or flood: USUALLY subject to an excess
True
building insurance
Damage to walls, gates, fences or hedges will be excluded.
True
building insurance
An unoccupied exclusion (30 or 60 days) and with an excess?
Escape of water or escape of oil, theft or attempted theft.
Impact
Collision into, or impact of, road vehicles, animals, aircraft (or other aerial devices) and things dropped from them.
Damage caused by pets are usually excluded
True
building insurance
Subsidence, ground heave or landslip Usually with a large excess. In the region of £1,000
True
building insurance
(Subsidence is the movement of the land on which the building stands due to movements in underground workings, e.g. mines.
true
Ground heave results when previously dry ground suddenly takes in water and swells, e.g. after a drought. Landslip is a small landslide).
true
Breakage or collapse of television or radio receiving aerials, aerial fittings and masts.
True
building insurance
Not damage to the aerials themselves which are covered by contents policy.
TRUE
Accidental damage to drains, pipes, cables or underground pipes.
True
building insurance
Accidental breakage of glass and sanitary fixtures
True
building insurance
The unfurnished unoccupied exclusion applies in accidental breakage of glass and sanitary fittings.
True
building insurance
Legal fees, architects’ and surveyors’ fees, cost of debris removal. Which are Incurred whilst reinstating the building after suffering loss or damage.
True
building insurance
Loss of Rent
covers rent (amounts payable by a leaseholder to the owner of the freehold) for a maximum period of two years and loss of rent for any part of the premises not occupied by the insured which has become uninhabitable.
What does loss of rent also cover?
It also covers the reasonable cost of alternative but similar accommodation while the premises are uninhabitable as a result of an insured peril.
What is the limit of building sum insured?
A limit of 10%–15% of the buildings sum insured applies.
Loss of rent.
True
building insurance
Which is an optional extension?
Accidental Damage
Fire, lightning, explosion and earthquake is covered.
True
building insurance
Riot, civil commotion, strikes, labour or political disturbances, malicious damage or vandalism:
Cover usually excludes loss or damage if the building is unoccupied for more than 30 or 60 days, malicious damage is USUALLY subject to an excess.
Storm or flood?
Cover under this heading specifically excludes damage caused by frost, subsidence, ground heave or landslip and damage to fences or hedges, and is USUALLY subject to an excess.
Escape of water ?
This covers the bursting (for example, as a result
of freezing) or overflowing of water tanks, apparatus or pipes, and includes any fixed domestic equipment:
Escape of water excludes ?
Cover excludes damage while the building is unfurnished or unoccupied for more than a certain period (30 or 60 days) and an excess is sometimes imposed, although this may be removed subject to an ADDITIONAL PREMIUM.
Which household insurance policy excess can be removed with additional premium?
Escape of water
Escape of oil ?
Damage caused by escape of oil from any fixed oil-fired heating system is covered and an unfurnished/unoccupied exclusion applies (30 or 60 days).
Theft or attempted theft?
Cover is USUALLY excluded while the premises are left unfurnished or unoccupied for more than 30 or 60 days.
Impact?
Cover is in respect of impact or collision with aircraft or other aerial devices, or articles dropped therefrom, road vehicles, or animals.
There may be an excess imposed for the insured’s or their family’s vehicles or animals.
Damage caused by pets is USUALLY excluded.
Subsidence, ground heave or landslip ?
Various exclusions will apply together with a large excess in the region of £1,000.
Subsidence refers to ?
The downward movement of land on which buildings stand, usually because of changes in the ground moisture.
Ground heave is
When the ground swells and heaves after the moisture content of the soil increases.
Landslip is the falling away of land, for example, after prolonged heavy rain.
TRUE
BUILDINGS INSURANCE
Breakage or collapse of television or radio receiving aerials, aerial fittings and masts??
This covers damage to the building caused by the collapse of the aerials, but NOT damage to the aerial itself which is usually covered under the contents section.
Accidental damage to drains, pipes, cables or underground pipes ?
Covers accidental damage to water, oil, gas, sewage and drain pipes, underground telephone, television and electricity cables serving the building.
Accidental breakage of glass and sanitary fixtures :
Covers accidental breakage of fixed glass in windows, doors, fanlights and skylights or greenhouses, conservatories and verandas forming part of the building.
It ALSO covers accidental breakage of fixed wash basins, cisterns, baths and other sanitary fittings.
Accidental breakage of glass and sanitary fixtures : The unfurnished/unoccupied exclusion applies. ??
True
BUILDINGS INSURANCE
Legal fees, architects’ and surveyors’ fees, cost of debris removal. ??
Covers reasonable legal fees and architects’ and surveyors’ fees necessarily incurred in the reinstatement of the building following loss or damage.
The costs of demolition or shoring up the building and debris removal are ALSO covered.
Legal fees, architects’ and surveyors’ fees, cost of debris removal, the Cover excludes any costs involved in preparing the insured’s claim. ??
True
BUILDINGS INSURANCE
Loss of rent?
This provides cover in respect of ground rent (amounts payable by a leaseholder to the owner of the freehold) for a maximum period of two years and loss of rent for any part of the premises not occupied by the insured which has become uninhabitable.
Loss of rent . It ALSO covers the reasonable cost of alternative but similar accommodation while the premises are uninhabitable as a result of an insured peril. ??
True
A limit of 10%–15% of the buildings sum insured applies.
True
Household policy= Contents insurance
Accidental damage
USUALLY as an optional extension (this would include, for example, damage caused by putting your foot through the floor of the loft into the bedroom below, or damage caused during DIY such as
putting a nail through a water pipe).
What is Contents insurance?
‘Contents’ means household goods and personal effects of every description that belong to the insured or to a member of the family living in the property.
What do contents include?
It includes cash and stamps (that are not part of a collection) USUALLY up to £250, and any fixtures and fittings belonging to the insured.
The risks covered are essentially the same as for buildings insurance, but with the following differences
True…
Contents insurance is similar to Buildings insurance with the following differences…
Accidental damage cover: certain contents are excluded, such as?
E.g. clothing, money and stamps, plants etc.
What are USUALLY limits on single articles of value?
5% or 10% of the total sum insured and a valuables limit of one-third of the total sum insured.
What is the maximum sum insured for an individual article will be regarded as?
Being no more than 5% or 10% of the total sum insured.
Valuables, taken together, will not USUALLY be covered for a sum greater than one-third of the total sum insured.
True
Contents Insurance
Valuables be disclosed and insured separately.
True
Contents Insurance
Theft , or attempted theft, of cash, currency, bank notes and stamps may be excluded if:
It does not involve forcible and violent entry or exit.
Theft, or attempted theft, while the building is lent, let or sub-let in whole or in part:
True
Contents Insurance
Most household policies can provide cover for specified articles that are not within 5% or 10% of the total sum insured.
True
Contents Insurance
Accidental breakage of mirrors and glass or furniture, loss of rent and temporary removal to another premises are extensions USUALLY included automatically. ??
True
Contents Insurance
Other extensions for the payment of an additional premium: such as :::
accidental damage during removal;
accidental damage to entertainment equipment;
cost of replacing keys and door locks after the loss or theft of keys.
Exclusions such as:
Livestock other than horses,
Drones and aircraft,
Medals and coins, unless specifically insured,
Motor vehicles
Property more specifically insured elsewhere;
All household policies also cover :
Legal liability to third parties for accidental injury or accidental damage to material property.
What’s USUALLY the limit to household policies?
£1m or £2m per claim, as follows.
Insurers increasingly offer higher limits as standard.
True
Household Policy
in Buildings, the Liability of the owner and also their liability incurred under the:
Defective Premises Act 1972
What is Defective Premises Act 1972 for?
For faults in property that the insured used to own or occupy.
In Contents the liability of the occupier for property in other premises that they use for temporary holiday accommodation?
True
Also a personal liability cover for insured while away from their premises.
True
household policy in contents insurance
These are the most common household policy extensions :
Bicycles, with USUALLY a limit per bicycle and with a lock or storage clause.
Bicycles, with USUALLY a limit per bicycle and with a lock or storage clause.
True
Contents insurance = bicycles
Cover is for pedal cycles and accessories on an ‘all risks’ basis.
True
Household policy common extensions insurance = bicycles
There may be a separate sum insured per cycle or, more USUALLY , a limit per cycle of between?
£100 and £500 for all cycles owned by the insured or family members.
How much is the excess?
£25–£50 is typical.
Specific exclusions:
True
(Household policy common extensions insurance = bicycles)
Loss or damage to parts or accessories; use for racing, pacemaking or trials;
Theft while unattended, unless secured.
Caravans cover?
Covering the accidental loss or damage of the caravan itself and all its equipment,
What is all risks caravan cover?
For clothing and personal effects and liability incurred in connection with it.
In ‘all risks’ cover while the property is in the caravan, awning or towing vehicle.
True
Household policy common extensions insurance = Caravan
Liability covers legal liability for bodily injury or damage to property caused by or in connection with the caravan.
True
Household policy common extensions insurance = Caravan
What’s the limit of indemnity for caravan cover?
£1m.
Specific exclusions may apply:
Household policy common extensions insurance = Caravan
the ‘all risks’ exclusions, such as wear and tear;
theft while left unattended,
unless closed and locked;
hire or reward;
business use;
storm or flood damage to an awning.
What is Creditor Insurance?
The inability to keep up credit instalment payments.
Domestic Animals?
Cover is available for horses, ponies, domestic cats and dogs.
Horses and ponies ?
Cover includes death from accident, sickness or disease, economic slaughter and loss by theft or straying.
Cover may also include temporary incapacity, veterinary fees, saddles, bridles or other riding tack, third party liability, personal accident to the rider and accidental damage to the horsebox trailer.
Cats and dogs
Cover includes veterinary fees, accidental death, death from illness, loss by theft, kennel fees while the owner is hospitalised, advertising and reward, third party liability and holiday cancellation following emergency surgery to the pet.
How are Freezer contents covered?
covering their damage as a result of a change in temperature accidental escape or contamination by refrigerant fumes.
What is the limit of indemnity?
£1,000.
Specific exclusions are as follows:
fire, lightning or explosion damage (as such cover is provided by the basic policy);
deliberate restriction of supply by the supplying authority;
wilful or deliberate act of the insured, such as turning off the supply at the mains;
damage after the freezer has reached,
15 years.
Legal expenses extension provides cover for :
Recovery costs
Civil defence costs
Prosecution defense costs
Employment dispute costs
The limit of liability is USUALLY up to £50,000 for incurred costs and expenses.
Recovery costs
Cover for legal action taken to enforce the legal rights of the insured against third parties.
Civil defence costs
Cover for the defence of certain types of civil claims not covered by other forms of insurance
Prosecution defence costs:
Cover for the defence of certain criminal charges which may arise from unwitting acts of the insured.
Employment dispute costs
For the pursuit of a claim on behalf of the insured against their employer through the Employment Tribunal, e.g. for unfair dismissal
Specific exclusions:
Claims relating to events occurring outside the UK, the Channel Islands and the Isle of Man;
appeals;
costs and expenses not agreed by the insurer;
claims arising out of the insured’s business,
deliberate or criminal act or omission, libel and slander,
divorce or matrimonial matters and disputes between landlord and tenant
It is important here to distinguish between:::
legal expenses as a section of cover offered under most household insurance policies, and
Add-ons which are often cross-sold to customers at point of sale when obtaining cover for other classes of insurance (e.g. private motor).
Money (e.g. cash, cheques, postage stamps and travel tickets) and credit cards each with a limit of indemnity, specific conditions (e.g. reporting the loss to the police and card issuer within a certain time)
True
Money policy
The money extension provides a form of ‘all risks’ cover much wider than that included under the contents section.
True
Money policy
What does money insurance cover?
Accidental loss of money.
‘Money’ USUALLY covers cash, cheques, postal orders, bankers’ drafts and postage stamps/certificates, premium bonds, lunch vouchers, gift vouchers, pre-loaded cash cards, phone cards and travel tickets.
True
Money policy
What is the limit of indemnity?
Money policy
Between £200–£300 applies, with an excess often around £50.
Specific exclusions:
Money policy
shortages due to error/omission;
losses not reported to the police within 24 hours.
What does the credit card extension provide cover for?
Money policy
Financial loss, following loss or theft of a card and its subsequent misuse.
Credit cards USUALLY include debit and cash cards as well as credit cards.
True
Money policy
Additional services offered by some insurers to the basic cover such as :
(Money policy)
Emergency cash and a card registration scheme.
What is the limit of liability?
Money policy
£500.
Money policy
Specific exclusions apply, including:
Money policy
unauthorised use of the credit card by one of the insured’s household;
breach of the issuer’s terms and conditions.
What is Personal accident and hospital cash benefit cover in (Creditor Insurance)?
Against the risk of personal accident and/or sickness, redundancy or unemployment for the insured and their family.
Cover is also available against the inability to continue credit instalment payments in the event of redundancy or unemployment
(Creditor Insurance)
(limited to, say, 24 months, excluding the first month of any period).
Personal possessions (sometimes known as ‘all risks’):
USUALLY only given in conjunction with contents cover and is for personal belongings taken outside the property. There will USUALLY be specified and unspecified items.
Such cover is available for personal possessions regularly taken outside the property.
True
All risks, contents insurance
USUALLY such cover is only available in conjunction with contents cover.
True
All risks, contents insurance
Most insurers include a separate sum insured for unspecified and specified items.
True
Personal possessions, All risks, contents insurance
Unspecified items
Covers items while away from the insured address.
The definition of unspecified items may be very wide (for example, covering clothing, personal effects and valuables) or may be more restrictive, (for example, some insurers may require a separate item for clothing).
True
Personal possessions, All risks, contents insurance
Certain types of property are not insurable under this extension as:
individual terms may need to be applied (for example, contact lenses);
separate insurance is available (for example, motor vehicles);
or insurers are not prepared to provide automatic cover (for example, documents).
The single article limit can vary from, between £100 and £1,000.
True
Personal possessions, All risks, contents insurance
Specified items are those which exceed the unspecified single article limit or those to which special terms apply.
True
Personal possessions, All risks, contents insurance
Examples of Specified Items:
Jewellery, furs and photographic equipment.
Specific exclusions are:
wear and tear etc.; insects or vermin; corrosion, rot, mildew, fungus or atmospheric conditions; any process of heating, dyeing, alteration or repair; scratching, denting, breakdown, faulty workmanship/materials; deeds, bonds, documents etc.
What is Small craft cover?
i.e. vessels not exceeding five metres and having a design speed no faster than 17 knots (20 mph).
What does Small Craft cover?
It covers the craft and its equipment, personal effects, salvage and liability to third parties and passengers subject to specific conditions..
Although definitions vary, small craft are defined as vessels not exceeding 23 feet (7 metres) overall and with design speeds not exceeding 17 knots (20mph).
True
Household policy extension= Small Craft Cover
Cover is USUALLY provided under four sections, namely:
accidental loss or damage to craft, machinery and equipment;
personal effects;
salvage charges;
liability to third parties and passengers: with a limit of indemnity of, say, £1m.
True
Household policy extension= Small Craft Cover
Cover may be excluded in respect of:
use for hire or reward, or business purposes;
liability for injury to employees;
theft of outboard motors, gear and equipment, subject to security.
What is Sports equipment?
Cover is for accidental loss of or damage to sports equipment and specialist sports clothing owned by any member of the insured household.
What does sports equipment cover?
USUALLY applies anywhere in the British Isles and for a limited period (60 days) worldwide in any one period of insurance.
Specific exclusions are as follows:
motor vehicles, trailers, caravans, boats etc.;
damage while the equipment is in use; living creatures; non-specialist sports clothing; pedal cycles; golf balls; camping equipment; equipment for certain hazardous pursuits: such as parachuting and mountaineering.
Each of these have specified cover and benefits, with exclusions and USUALLY an excess.
True
Household policy extensions
For example, legal expenses cover provided by a household policy typically provides cover for the following:
Recovery costs
Civil Defence Costs
Prosecution Costs
Employment Costs
Recovery costs
For legal action taken to enforce the legal rights of the insured against third parties
Civil defence costs
For the defence of certain types of civil claims not covered by other forms of insurance
Prosecution defence costs
For the defence of certain criminal charges which may arise from unwitting acts of the insured
Employment dispute costs
For the pursuit of a claim on behalf of the insured against their employer through the Employment Tribunal, e.g. for unfair dismissal
