IF4.1 General Principles Flashcards
Onus Proof
The insured needs to prove:
- that an insured peril arose
- the amount of the loss
Indemnity
placing the insured in the same financial position as they enjoyed prior to the loss
Who does the onus of proof lie on
the insured
Quantum
the amount of the claim
proof of the amount of a loss
a receipt, repair account or a valuation
proof that the insured peril arose
usually via a claim form or photos
insurers duties when a claim is submitted
- 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
claim occurring basis
policy in force at the time of the incident
claim made basis
policy in force at the time the claim was made
express conditions
conditions stated in the policy
implied conditions
conditions not stated in the policy but are expectations
if conditions Precedent to liability are not met…
insurers may avoid liability for a particular loss, but need not repudiate the contract as a whole
Insurance: Conduct of Business Sourcebook (ICOBS) avoiding claims
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.
Conditions precedent to contract
must be fulfilled before the contract begins
Conditions subsequent to contract
must be continued after the contract has been signed
Conditions precedent to liability (or recovery)
must be fulfilled at the time of the claim
Conditions which result in a claim only partially being met
- 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)
Consumer Rights Act 2015
If a term of contract is not transparent or prominant it can be assessed for unfairness
a term is transparent if
expressed in plain and intelligible language
A term is prominent
bought to the consumers attention in a way that the average customer would be aware of it.
Implied duties of the insured after a loss
- 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
Express duties of the insured after a loss
- 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.
Notification
Most insurers require that the insured should notify their insurers promptly, further information may be requested after initial notification.
Breach of express duties =>
the insurer can repudiate a particular claim
Average Consumer
reasonably well informed, observant & circumspect
First Notification of Loss (FNOL)
quickly gather details about the claim usually via a telephone call.
For low value claims this is often enough to pay out a claims.
Benefits of First Notification of Loss (FNOL) to the insurer
- control over cost (they can use approved repairers and negotiate terms)
- Automated claims notifications means staff can be used for more valuable rolls.
Benefits of First Notification of Loss (FNOL) to the insured
- 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
Purpose of a claim form
- 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)
Property claim form notification requires the following details (in addition to basic personal details)
- 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
Motor accident claim form notification requires the following details (in addition to basic personal details)
- 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.
Answers on the claim form must be checked for good faith i.e.
checked against the proposal form and checked:
- no breach of duty of fair presentation
- breach of care not to make a misrepresentation
If a loss adjustor is required…
the insurer should explain to the client what’s going on and let them know a claims adjustor is required
Supporting evidence for theft claims
- checked against the police report.
- Evidence of ownership receipts or photos.
Supporting evidence for motor liability claims
dashboard camera footage, satellite images of the incident, engineering reports
Supporting evidence for personal injury and sickness claims
medical evidence (doctors certificates, death certificates, coroners inquest)
Supporting evidence for Motor total loss claims & theft
registration documents (V5)
Solicitors in the investigation process
give legal opinions or defence
Surveyors in the investigation process
estimate rebuilding costs
Doctors in the investigation process
verify or assess the severity of injuries and assist in rehabilitation
Motor engineers in the investigation process
verify the damage caused and agree repair costs
Restoration experts in the investigation process
to restore property or contents damaged by water and fire.
Proximate Cause
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)
When was proximate cause define
Pawsey v. Scottish Union and National (1907)
Insured Perils
those named in the policy as covered
Excepted or excluded perils
those named as specifically not covered
Uninsured or unnamed perils
not referred to in the policy therefore not insured
When does the onus of proof move to the insurer
if the insurer refuses to pay a claim then the insurer must prove that such exclusions apply.
How is onus of proof different with liability claims)
Liability claims (insured would still need to prove a valid claim, but the insurer would then generally handle negotiation and claims settlements.
