IF4.1 General Principles

Question 1

Onus Proof

Answer 1

The insured needs to prove:
- that an insured peril arose
- the amount of the loss

Question 2

Indemnity

Answer 2

placing the insured in the same financial position as they enjoyed prior to the loss

Question 3

Who does the onus of proof lie on

Answer 3

the insured

Question 4

Quantum

Answer 4

the amount of the claim

Question 5

proof of the amount of a loss

Answer 5

a receipt, repair account or a valuation

Question 6

proof that the insured peril arose

Answer 6

usually via a claim form or photos

Question 7

insurers duties when a claim is submitted

Answer 7

• cover was in force at the time of the loss
• the insured is the same as that named in the policy/ they are entitled to indemnity
• the peril is covered by the policy
• the insured has taken reasonable steps to minimise the loss
• all conditions and warranties have been complied with
• the duty of fair presentation has been complied with / no misreps by consumers.
• no exceptions apply
• the value of the loss is reasonable

Question 8

claim occurring basis

Answer 8

policy in force at the time of the incident

Question 9

claim made basis

Answer 9

policy in force at the time the claim was made

Question 10

express conditions

Answer 10

conditions stated in the policy

Question 11

implied conditions

Answer 11

conditions not stated in the policy but are expectations

Question 12

if conditions Precedent to liability are not met…

Answer 12

insurers may avoid liability for a particular loss, but need not repudiate the contract as a whole

Question 13

Insurance: Conduct of Business Sourcebook (ICOBS) avoiding claims

Answer 13

unless fraud is involved, the insurer should not refuse to pay from a consumer on the grounds that a condition was not met, where that condition was not connected with the circumstances of the loss.

must be paid in a timely manner.

Question 14

Conditions precedent to contract

Answer 14

must be fulfilled before the contract begins

Question 15

Conditions subsequent to contract

Answer 15

must be continued after the contract has been signed

Question 16

Conditions precedent to liability (or recovery)

Answer 16

must be fulfilled at the time of the claim

Question 17

Conditions which result in a claim only partially being met

Answer 17

• the sum insured/ limit of liability (max amount recoverable)
• average clause when underinsurance applies (recoverable amount will be reduced)
• Voluntary or compulsory excess or deductible (never recoverable)

Question 18

Consumer Rights Act 2015

Answer 18

If a term of contract is not transparent or prominant it can be assessed for unfairness

Question 19

a term is transparent if

Answer 19

expressed in plain and intelligible language

Question 20

A term is prominent

Answer 20

bought to the consumers attention in a way that the average customer would be aware of it.

Question 21

Implied duties of the insured after a loss

Answer 21

• act as though they are uninsured
• advise the appropriate authorities as necessary
• take all steps to prevent loss from spreading
• not hinder the claims investigation process

Question 22

Express duties of the insured after a loss

Answer 22

• notify the insurer promptly
• involve the emergency services
• take reasonable steps to prevent further damage
• give proof and details of the loss within a certain time.

Question 23

Notification

Answer 23

Most insurers require that the insured should notify their insurers promptly, further information may be requested after initial notification.

Question 24

Breach of express duties =>

Answer 24

the insurer can repudiate a particular claim

Question 25

Average Consumer

Answer 25

reasonably well informed, observant & circumspect

Question 26

First Notification of Loss (FNOL)

Answer 26

quickly gather details about the claim usually via a telephone call.
For low value claims this is often enough to pay out a claims.

Question 27

Benefits of First Notification of Loss (FNOL) to the insurer

Answer 27

• control over cost (they can use approved repairers and negotiate terms)
• Automated claims notifications means staff can be used for more valuable rolls.

Question 28

Benefits of First Notification of Loss (FNOL) to the insured

Answer 28

• immediate access to the service
• simplified claims process
• no interaction with claims staff / no long waits
• claims are settled more quickly
• quality of repair and replacement work is generally of high consistent standard

Question 29

Purpose of a claim form

Answer 29

• establish whether the insured is entitled to indemnity under the policy
• provide sufficient information to permit the insurer to begin processing the claim & assess severity (set aside reserves) & assess if potential third party claim (and hence if any recovery rights exist)

Question 30

Property claim form notification requires the following details (in addition to basic personal details)

Answer 30

• description of the property damaged
• date, cause, circumstances and the monetary amount of the loss
• situation and occupancy of the premises
• capacity in which the insured is claiming (owner?)
• whether any other person has an interest in the lost or damaged property
• whether there is any other insurance in force

Question 31

Motor accident claim form notification requires the following details (in addition to basic personal details)

Answer 31

• details of the insured
• vehicle involved in the accident, and its use.
• the specific detail of the accident (date, time, road conditions, lighting etc.)
• sketch plan of the accident scene (positions of vehicles etc)
• details of independent witnesses.

Question 32

Answers on the claim form must be checked for good faith i.e.

Answer 32

checked against the proposal form and checked:
- no breach of duty of fair presentation
- breach of care not to make a misrepresentation

Question 33

If a loss adjustor is required…

Answer 33

the insurer should explain to the client what’s going on and let them know a claims adjustor is required

Question 34

Supporting evidence for theft claims

Answer 34

• checked against the police report.
• Evidence of ownership receipts or photos.

Question 35

Supporting evidence for motor liability claims

Answer 35

dashboard camera footage, satellite images of the incident, engineering reports

Question 36

Supporting evidence for personal injury and sickness claims

Answer 36

medical evidence (doctors certificates, death certificates, coroners inquest)

Question 37

Supporting evidence for Motor total loss claims & theft

Answer 37

registration documents (V5)

Question 38

Solicitors in the investigation process

Answer 38

give legal opinions or defence

Question 39

Surveyors in the investigation process

Answer 39

estimate rebuilding costs

Question 40

Doctors in the investigation process

Answer 40

verify or assess the severity of injuries and assist in rehabilitation

Question 41

Motor engineers in the investigation process

Answer 41

verify the damage caused and agree repair costs

Question 42

Restoration experts in the investigation process

Answer 42

to restore property or contents damaged by water and fire.

Question 43

Proximate Cause

Answer 43

the dominant cause of the loss that directly links (the trigger that sets in motion a train of events which brings a result, without intervention of any force)

Question 44

When was proximate cause define

Answer 44

Pawsey v. Scottish Union and National (1907)

Question 45

Insured Perils

Answer 45

those named in the policy as covered

Question 46

Excepted or excluded perils

Answer 46

those named as specifically not covered

Question 47

Uninsured or unnamed perils

Answer 47

not referred to in the policy therefore not insured

Question 48

When does the onus of proof move to the insurer

Answer 48

if the insurer refuses to pay a claim then the insurer must prove that such exclusions apply.

Question 49

How is onus of proof different with liability claims)

Answer 49

Liability claims (insured would still need to prove a valid claim, but the insurer would then generally handle negotiation and claims settlements.