Module 9

Question 1

Before a claim can be settled, certain conditions must be met and procedures followed.

Harold tells his home insurer that a burst pipe in his home has caused some damage to his carpet and furniture and he wants to make a claim for the cost of repairs under his home contents policy.

For Harold’s claim to be successful, which of these would you expect him to have to prove

(Select all that apply)

A. That the damage was caused by an insured peril

B. The amount of the damage

C. That the claim is genuine (i.e. not fraudulent)

D. That all policy conditions and warranties have been complied with

Answer 1

A. That the damage was caused by an insured peril

B. The amount of the damage

Question 2

There are some circumstances where a claim will be only partially met by the insurer.

Study the examples below and decide in each case whether you would you expect the insurer to make a deduction from the full value claim settlement?

(Select all that apply)

A. The sum insured under John’s personal accident policy is £10,000 for loss of a limb. He loses an arm in an accident and claims under the policy

B. The limit of liability under XYZ Ltd’s public liability policy is £2,000,000. A customer makes a successful liability claim against them and damages of £3,000,000 are awarded

C. Mary’s motor policy is subject to a £100 voluntary own damage excess. She makes a claim for damage to her car caused while she was parked by an unknown third party

D. Castor Castings insure their warehouse contents against theft for £50,000. They make a claim for £5,000 following a burglary and the loss adjuster reports that the actual value of the warehouse contents is £100,000. The policy is subject to an average clause

Answer 2

B. The limit of liability under XYZ Ltd’s public liability policy is £2,000,000. A customer makes a successful liability claim against them and damages of £3,000,000 are awarded

C. Mary’s motor policy is subject to a £100 voluntary own damage excess. She makes a claim for damage to her car caused while she was parked by an unknown third party

D. Castor Castings insure their warehouse contents against theft for £50,000. They make a claim for £5,000 following a burglary and the loss adjuster reports that the actual value of the warehouse contents is £100,000. The policy is subject to an average clause

Question 3

Sometimes a payment for a claim is made by the insurer as a gesture of goodwill when there is no obligation to do so.

This may be to enhance the image and reputation of the insurer or to avoid undue hardship for the insured.

What is the name given to this type of payment?

A. A friendly payment
B. An Ex gratia payment
C. A Good will Payment

Answer 3

B. An Ex gratia payment

Question 4

In order for a claim to be payable, the insured must comply with certain duties following a loss.

Express duties are those:

A. Imposed by Common Law
B. Written into the Contract

Answer 4

B. Written into the Contract

Question 5

For which of these classes of insurance do you think a claim form must always be completed following a risk event, even if the insured does not intend to claim?

A. Motor
B. Fire
C. Theft
D. Marine

Answer 5

A. Motor

Question 6

A property claims handler at Reliable Accident insurance receives a completed claim form from a policyholder. What would you suggest is the first thing she should do?

A. Check that the policy is in force
B. Check that the insured has insurable interest
C. Assess the amount of damage
D. Check that the value of the loss is reasonable

Answer 6

A. Check that the policy is in force

Question 7

As well as the claim form, other types of supporting evidence may be necessary depending on the class of insurance,

Select the correct type of claim based on the evidence requested.

An engineer’s report or an accident book (if in a workplace).

A. Theft claim
B. Accident claim
C. Motor Claim
D. Personal injury and sickness claim

Answer 7

B. Accident claim

Question 8

As well as the claim form, other types of supporting evidence may be necessary depending on the class of insurance,

Select the correct type of claim based on the evidence requested.

A doctor’s report or other form of medical evidence.

A. Theft claim
B. Accident claim
C. Motor Claim
D. Personal injury and sickness claim

Answer 8

D. Personal injury and sickness claim

Question 9

As well as the claim form, other types of supporting evidence may be necessary depending on the class of insurance,

Select the correct type of claim based on the evidence requested.

A vehicle registration document in the event of a total loss motor claim.

A. Theft claim
B. Accident claim
C. Motor Claim
D. Personal injury and sickness claim

Answer 9

C. Motor Claim

Question 10

As well as the claim form, other types of supporting evidence may be necessary depending on the class of insurance,

Select the correct type of claim based on the evidence requested.

A police report.

A. Theft claim
B. Accident claim
C. Motor Claim
D. Personal injury and sickness claim

Answer 10

A. Theft claim

Question 11

What is the difference between a loss adjuster and a loss assessor?

A. A loss adjuster works on the behalf of the insured to negotiate a claim and a loss assessor is an independent claims expert appointed by the insurer to investigate and recommend a settlement of the claim.

B A loss assessor works on the behalf of the insured to negotiate a claim and a loss adjuster is an independent claims expert appointed by the insurer to investigate and recommend a settlement of the claim.

Answer 11

B A loss assessor works on the behalf of the insured to negotiate a claim and a loss adjuster is an independent claims expert appointed by the insurer to investigate and recommend a settlement of the claim.

Question 12

Which Claims settlement options only apply if stated in the policy?

(select all that apply)

A. Payment of money
B. Replacement
C. Paying for repairs
D. Reinstatement

Answer 12

B. Replacement
D. Reinstatement

Question 13

Chris claims under his home contents policy for a new TV set after he accidentally breaks his current set.

What is the most likely settlement method?

A. Payment of money
B. Replacement
C. Paying for repairs
D. Reinstatement

Answer 13

B. Replacement

Question 14

Ruth claims under her comprehensive motor policy when her car receives minor damage in an accident.

What is the most likely settlement method?

A. Payment of money
B. Replacement
C. Paying for repairs
D. Reinstatement

Answer 14

C. Paying for repairs

Question 15

ABC insurer suspects XYZ Ltd set fire to their premises to gain a cash settlement, but cannot prove fraud and want to defeat the possible fraudulent intention.

What is the most likely settlement method?

A. Payment of money
B. Replacement
C. Paying for repairs
D. Reinstatement

Answer 15

D. Reinstatement

Question 16

Mark claims compensation from his company’s employers’ liability insurer for his injuries sustained at work.

What is the most likely settlement method?

A. Payment of money
B. Replacement
C. Paying for repairs
D. Reinstatement

Answer 16

A. Payment of money

Question 17

Put yourself in the position of a claims handler, assessing new claims notifications.

For which of these claims might you suspect a fraudulent intention on the part of the claimant?

(Select all that apply)

A. Alan, who works as a clerk in a retail store takes out a home contents policy in January. In March he claims for the theft of some expensive jewellery from his home

B. Brenda who has third party fire and theft cover claims for the theft of her car. She is reluctant to report the matter to the police because she says it is a waste of time doing so

C. Clive claims under his travel baggage insurance for the loss of several items while he was away on holiday. Several of the items were apparently quite valuable but Clive is unable to produce receipts to substantiate this

D. Dawn claims for water damage to a carpet in her home. This is the third claim that she has made under the policy in the last year

Answer 17

A. Alan, who works as a clerk in a retail store takes out a home contents policy in January. In March he claims for the theft of some expensive jewellery from his home

B. Brenda who has third party fire and theft cover claims for the theft of her car. She is reluctant to report the matter to the police because she says it is a waste of time doing so

C. Clive claims under his travel baggage insurance for the loss of several items while he was away on holiday. Several of the items were apparently quite valuable but Clive is unable to produce receipts to substantiate this

D. Dawn claims for water damage to a carpet in her home. This is the third claim that she has made under the policy in the last year

Question 18

Which fraud prevention agency is being described here:

A. Motor insurance anti-fraud and theft register
B. Insurance fraud bureau
C. Claims and underwriting exchange
D. Art loss Register

Question 19

Which fraud prevention agency is being described here:

An organisation funded by the insurance industry and specifically focused on detecting and preventing organised and cross-industry insurance fraud. It has a fraud cheatline freephone number that anyone with information on suspected fraud can use.

A. Motor insurance anti-fraud and theft register
B. Insurance fraud bureau
C. Claims and underwriting exchange
D. Art loss Register

Answer 19

B. Insurance fraud bureau

Question 20

Which fraud prevention agency is being described here:

A database shared by insurers across the country, containing details of household, motor and personal injury claims, so that claims histories can be checked against other insurers’ data. It enables insurers to detect multiple claims against different insurers for the same incident and discrepancies in details given by fraudulent policyholders.

A. Motor insurance anti-fraud and theft register
B. Insurance fraud bureau
C. Claims and underwriting exchange
D. Art loss Register

Answer 20

C. Claims and underwriting exchange

Question 21

Which fraud prevention agency is being described here:

A collaboration between the art world and the insurance industry to increase the recovery rate of stolen art and to deter theft by making the resale of stolen articles more difficult.

A. Motor insurance anti-fraud and theft register
B. Insurance fraud bureau
C. Claims and underwriting exchange
D. Art loss Register

Answer 21

D. Art loss Register

Question 22

Which fraud prevention agency is being described here:

Contains details of all total loss and theft claims on motor vehicles from participating insurers, so that claims data can be checked against other insurers’ experience.

A. Motor insurance anti-fraud and theft register
B. Insurance fraud bureau
C. Claims and underwriting exchange
D. Art loss Register

Answer 22

A. Motor insurance anti-fraud and theft register

Question 23

Thomas loses some property in a fire at his warehouse.

He is concerned that the insurer will try to reduce the amount of his claim and so he exaggerates the value of the property to allow for this possibility.

Would you consider that Thomas was acting fraudulently?

A. Yes
B. No

Answer 23

A. Yes

Question 24

Why might an insurer decide to make an ex-gracia claims payment?

(Select all correct answers)

A. To enhance the image and reputation of the insurer

B. The insured supplied adequate evidence to support their claim

C. To avoid undue hardship for the insured

Answer 24

A. To enhance the image and reputation of the insurer

C. To avoid undue hardship for the insured

Question 25

What are express duties?

A. Those written into common law

B. Those written into the insurance contract

C. Those decided by the claims team at the point of claim

Answer 25

B. Those written into the insurance contract

Question 26

In house Claims staff would usually negotiate:

A. Larger more complex property and business interruption claims

B. Small, straight forward claims

Answer 26

B. Small, straight forward claims

Question 27

A Loss adjuster appointed by the insurer would usually negotiate:

A. Larger more complex property and business interruption claims

B. Small, straight forward claims

Answer 27

A. Larger more complex property and business interruption claims

Question 28

What is the most likely settlement method for a car insurance claim?

A. Payment of money
B. Paying for repairs
C. Replacement
D. Reinstatement

Answer 28

B. Paying for repairs

Question 29

Who is affected by fraudulent claims?

(Select all correct answers)

A. The insurer

B. The insured

C. The fraudulent claimant

Answer 29

A. The insurer

B. The insured

C. The fraudulent claimant