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IF 2 > PACKAGED INSURANCE > Flashcards

PACKAGED INSURANCE Flashcards

1
Q

Why do insurers tend to produce packaged policies

A

When there is sufficient homogeneity of risk

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2
Q

What is Homogeneity of risk

A

This is a situation where many risks share similar characteristics and follow similar trends

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3
Q

What do household policies cover

A

These policies are issued to cover buildings and/content against a wide range of perils i.e fire/theft. Also cover valuables/personal effect and public liability

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4
Q

For Household claims there are two options for settlement when the item concerned is irreparable

A
  1. Indemnity

2. New for Old Compensation

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5
Q

Indemnity for household claims of an item

A

For indemnity claims a deduction of wear and tear is made. The amount paid is required to replace the item with a replacement of the same age and the same condition. It’s a rare option

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6
Q

New for Old/reinstatement for household claims of an item

A

Full cost of replacing the item as new is paid. In certain circumstances they make a deduction of wear and tear i.e clothing/household linen. Deduction is also applicable if sum insured is not enough/ for property over a certain age

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7
Q

What type of excesses household policies subject to

A

These policies may be subject to either overall excess or different level of excess for the different contingencies covered

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8
Q

For Buildings, in respect of household insurance, what is defined as the main structure of the private dwelling

A

It includes houses/garages/sheds/pools/greenhouses anything that would be left behind when moving from a house is considered part of the building

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9
Q

What covers are available in respect to building insurance

A

1.Fire/Lightning/Explosions/earthquake
2.Riot/Vandalism/strikes/labor
3.Storm/flood
4.falling trees/branches
5.escape of Water
6.Escape of oil
7.Theft/attempted theft
8.impact/collision
subsidence,ground heave/landslip
9.Breakage/collapse of television/radio receiving aerials, aerial fittings and masts
10.Accident damage to drains/pipes/cables/underground piles
11.Accidental breakage of glass and sanitary fixtures
12. Legal fees, architects and surveyors fees, cost of debris removal
13.loss of rent
14.Accidental damage extension

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10
Q

For Riot/Vandalism/malicious damage what does it exclude

A

This cover specifically excludes loss/damage occurring whilst the building is unoccupied/unfurnished fir 30/60 days in any one insurance period.

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11
Q

Malicious Damage under riot civil/ commotion/strikes/labor/political disturbance/malicious damage/vandalism cover is subject to

A

This cover is usually subject to an excess and police being notified of the incident

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12
Q

For Storm/flood damage what does it exclude

A

Specifically excludes damage caused by frost,subsidence,ground heave,landslide and damage to gates,fences or hedges. Cover is subject to an excess

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13
Q

The Legal Liability section for Buildings include

A

Liability incurred by the insured as owner of the property and liability incurred under Defective Premises Act 1972 for faults in property formerly owned and occupied by the insured

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14
Q

The Legal Liability section for Content include

A

It protects the interest of the insured as

  1. an occupier of the property rather than the owner
  2. a private individual for personal liability,liability doesn’t need to be linked with the occupation of the building
  3. as an employer of domestic employees
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15
Q

What does it mean to insurer buildings/content on an all risk basis

A

This means property is insured against any peril that is not specifically excluded

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16
Q

Falling trees or branches cover excludes

A

It excludes damage to gates/fences/hedges

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17
Q

Escape of Water covers

A

It covers bursting due to freezing or overflowing of water tanks/pipes/apparatus and includes any fixed domestic water/heating installation, washing machines and other domestic equipment

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18
Q

Escape of Water covers excludes

A

Damage to building that is unfurnished/unoccupied to 30/60 days in any one period of insurance

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19
Q

Escape of oil covers

A

Damaged by escape of oil from any fixed oil-fired heating system. Unfurnished/occupancy exclusion still applies

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20
Q

Theft or attempted theft cover excludes

A

It will exclude while the premise is left unfurnished/unoccupied to 30/60 days in any one period of insurance

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21
Q

Insurers cover theft as defined by

A

The theft Act 1968, stating a person is guilty of theft if they dishonestly appropriate property belonging to another with the intention of permanently depriving the owner

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22
Q

Impact/collision cover excludes

A

Damage caused by pets

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23
Q

Impact/Collision covers

A

It covers collision/impact with aircraft or other aerial devices or with articles dropped therefrom road vehicles or animals

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24
Q

Subsidence Ground heave and landslip excludes

A

Loss of damage caused by

  • normal shrinkage/settlement
  • faulty workmanship/design/faulty materials
  • during demolition/structural alteration/repair
  • coastal/riverbank explosion
  • from movement of solid floor slabs,unless foundation below the external walls are damaged at the same time
  • fixed fuel oil tanks, swimming pools/tennis courts/ walls/gates/fences/terraces and drivers unless house is damaged at the same time by the same cause
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25
Q

Breakage or collapse of television or radio receiving aerials, aerial fittings and masts covers

A

IT covers damages to the building from the collapse of the aerial

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26
Q

Breakage or collapse of television or radio receiving aerials, aerial fittings and masts doesn’t cover

A

Damage tot he aerial device that is under content insurance

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27
Q

Accidental breakage of glass and sanitary fixtures cover

A

It covers accidental breakage of glass in windows/doors/fanlights/skylights/greenhouse conservatories/verandas forming part of the buildings and also covers accidental breakage of fixed wash basins,cisterns, baths and other sanitary fittings

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28
Q

Legal fees, architects and surveyors fees, cost of debris removal excludes

A

The cost involved in preparing the insured’s claim

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29
Q

Legal fees, architects and surveyors fees, cost of debris removal covers

A

It covers reasonable legal fees and architect and surveyors fees necessarily incurred in the reinstatement of the building following loss or damage. Demolition cost and debris removal are also covered

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30
Q

what is the loss pf rent limit for insurers

A

It’s usually 10-15% of the building sum insured

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31
Q

For Loss of rent, some insurers offer a reasonable accommodation expenses, what do they take into account

A

It takes all the circumstances of claim into account including

  • individuals needs
  • the length of time for which accommodation is needed
  • the alternative accommodation available locally
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32
Q

Loss of rent cover is provided

A

The cover is given in respect to ground rent for maximum of 2 years and loss of rent for any part of the premises that is not occupied by the insured which has become uninhabitable

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33
Q

Insurer offer accidental damage extension to household policy but it is subject to

A

It is subject to a higher premium and always an excess on atleast 100 pounds

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34
Q

Accidental damage cover will include

A
  • drilling through a pipe
  • hammering a nail through an electric wire
  • putting a foot through a ceiling
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35
Q

Accidental damage extension excludes

A

It excludes damage while dwelling is let; wear and tear ,settlement or shrinkage, wet or dry rot, fungus,vermin, insects, damage caused by household pets any risk specifically excluded under standard buildings section like storm damages to fences

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36
Q

Content insurance in respect to household is defined as

A

Household goods and personal effects belonging to the insured or family living in the property

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37
Q

Content insurance will include

A

Cash and stamps( not part of stamp collection) to say 500 pounds,any fixtures and fittings that belong to the insured

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38
Q

Content insurance will exclude

A

Anything that forms part of the structure like ceilings,wallpaper and the likes,,satellite dishes and receivers

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39
Q

Under content insurance theft or attempted theft of cash/currency/bank notes/ stamps is generally excluded

A

If it doesn’t involve forcibly and violent entry or exit

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40
Q

Under Content insurance theft or attempted theft by deception is is excluded if

A

This type of theft is generally excluded unless the deception is used to get into the home

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41
Q

Theft or attempted theft while building is lent/let/sublet in whole or part or if unfurnished will normally be excluded if

A

It will be excluded if it does not involve forcible and violent entry or exit

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42
Q

Under Content insurance accidental damage is excluded on

A

clothing/contact lenses/money/stamps/coins/medals/plants/food/drink/sports equipment/bicycles

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43
Q

Under content insurance what are the limits on items

A
  • single article limit

- valuables limit

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44
Q

What covers are included in content insurance with no additional premium

A
  • Temporary Removal
  • Clothing and personal effects
  • Accidental Breakage
  • Loss of rent
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45
Q

Temporary removal cover under content insurance covers

A

This policy automatically extended to cover the contents while temporary removed but remaining in the UK, Ireland or Northern Ireland

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46
Q

How would some insurers limit the amount covered under temporary removal

A

They may limit amount covered at any one time under this extension to be let’s say 20% of sum insured contents

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47
Q

Temporary removal excludes

A

It excludes risk of storm and flood as regards to property that is not in a building

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48
Q

Under Temporary removal theft or attempted theft is only covered

A
  • any bank/safe deposit or while been taken there
  • any building where the insured/family member us temporary residing/working
  • in the course of removal to or from any bank or safe deposit while in the insured’s or insured’s family charge
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49
Q

accidental breakage cover under content insurance covers

A

Accidental breakage of mirrors and glass on or fixed to furniture

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50
Q

Loss of rent under content insurance cover

A

Loss of rent and reasonable additional expenses incurred for alternative accommodation in the event of the premises becoming uninhabitable

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51
Q

Loss of rent cover is usually limited to

A

It is limited to 10%-20% of content sum insured

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52
Q

What are content insurance optional extensions subject to additional premium

A
  • Accidental damage to entertainment equipment

- Accidental damage while in the course of removal

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53
Q

Accidental damage to entertainment equipment covers

A

The cover includes accidental damage to radios and televisions, also includes audio/video/computer equipment and ceramic hobs while they are within home or outbuildings

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54
Q

Accidental damage to entertainment equipment covers excludes

A

damage to portable equipment and tapes and standard accidental damage exclusions

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55
Q

Accidental damage while in the course of removal

A

This covers accidental damage while in the course of removal by professional removers or in temporary storage in a furniture depository. excess applies

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56
Q

What are other non-automatic extensions of content insurance

A
  • loss of oil
  • metered water from fixed domestic water/heating installation/washing machine
  • cost of replacing door locks following g theft of keys
  • temporary increase in sum insured at certain times of the year
  • covering personal effects of children while away college
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57
Q

what are the specific exclusions under content insurance

A
  • property more specifically insured under another policy
  • motor vehicle
  • livestock other than horses
  • medals/coins unless specifically insured
  • deeds/bonds/bill of exchange/promissory notes/cheques/securities/documents/manuscripts
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58
Q

Legal liability limit for content and building insurance is usually

A

2 million applies to any one claim,

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59
Q

Legal liability for building and content is for

A

The indemnity is for the insured and all family members permanently residing in the property

60
Q

Insuring property on an all risk basis means

A

The property is insured against any peril that is not specifically excluded

61
Q

why do insurers favor adding accidental damage option to their standard cover

A

So they can retain the specific exclusions that relate to particular peril like unoccupied/unfurnished exclusions for theft or not accompanied by violent entry or exit

62
Q

What are the optional extensions added to household policy

A
  • All Risks
  • Money and Credit Cards
  • Bicycles
  • Freezer Contents
  • Caravans
  • Small Craft
  • Sports equipment
  • Personal accident/hospital cash benefit and creditor insurance
  • Domestic animals
  • Legal Expenses
  • identity fraud
63
Q

all risk cover is available

A

This cover is available for personal possessions like jewelry,watches,cameras, laptops,tablets regularly taken outside the property.

64
Q

All risk cover is available in conjunction with what cover

A

It’s available in conjunction with content cover

65
Q

For all risk cover for which items will insurer request a separate sum insured

A

for specified items above a certain sum, but they will cover unspecified item subject to a limit for any one item

66
Q

Definition for unspecified items include

A

it varies may be wide like clothing, personal effects and valuables or may be restrictive
Single article limit between 100 ponds and 500 pounds

67
Q

What are Specified items

A

these are items that exceed the unspecified single article limit o which special terms apply

68
Q

Specified items examples are

A

Jewellry/fur/photographic equipment.

Sum insured represents the replacement value

69
Q

What are the specific exclusion for all risk cover

A
  • wear and tear, depreciation
  • insect/vermin
  • corrosion/fungus/mildew/rot
  • any process of heating dyeing alteration/repair
  • mechanical/electrical breakdown
  • scratching/denting/faulty workmanship
  • official confiscation/detention
  • deeds/bonds/documents
70
Q

Money cover is

A

All risk cover wider than the one included under content section

71
Q

Money cover will usually include

A

Cash/Cheque/Postal order/bankers drafts/postage stamps/certificates/premium bonds/luncheon vouchers/gift tokens and travel tickets

72
Q

Money covers

A

Accidental loss of money and a limit od indemnity between 200-500 pounds, an excess of around 100 pounds

73
Q

Money exclusions include

A
  • shortage due to error/omission

- loss not reported to the police within 24 hrs

74
Q

Credit card covers

A

financial loss following loss or theft of credit card and its subsequent misuse

75
Q

What is a standard condition for credit card cover

A

Loss should be reported to the card issuer and the police within 24 hrs of discovery

76
Q

Credit card also covers

A

cheque card,cash card and charge card, credit card

77
Q

What are the additional services some insurers offer

A
  • Emergency Cash (temporary measure)

- Card registration scheme

78
Q

Limit of liability for credit card cover i is usually

A

500 pounds

79
Q

What are some of the exclusions of credit card

A
  • unauthorized use of the credit card, by one of the insured’s household
  • breach of the issuer’s term and conditions
80
Q

Bicycle is most commonly covered in

A

It’s covered in most household policies in the market with a general limit between 500-1,000 pounds per bicycle. Unless the value for each is specified

81
Q

What are he exclusions for bicycle cover

A
  • loss/damage to spare parts or accessories unless the bicycle is damaged at the same time
  • use for competitive and sports events
  • some insurers will exclude theft while bike is left unattended, unless its locked in a building /secured
82
Q

what does freezer content cover

A

It applies for deterioration of freezer content due to change in temperature or contamination as a result of accidental escape of refrigerant or refrigerant fumes

83
Q

What are the exclusion of freezer content

A
  • fire/lightning/explosions damage
  • deliberate restriction of the supply by the supply authority
  • willful or deliberate act of the insured,
  • damage after the freezer has reached a long time like 15 years
84
Q

Caravan cover is provided in three sections

A
  • Caravan and equipment
  • clothing and personal effects
  • liability
85
Q

The caravan and equipment section under caravan covers

A

cover is an all risk cover in respect of accidental loss/damage to the caravan,its fixture and fittings, furniture, utensils and furnishing

86
Q

The clothing and personal effects under Caravan covers

A

Provides all risk cover while property is in the caravan,awning,towing vehicle

87
Q

The liability section under caravan covers

A

The legal liability for bodily injury or damage to property caused by or in connection with the caravan up to a limit

88
Q

Caravan cover extension while in Europe will last for how many days

A

30/60/90 days including short sea transit

89
Q

What are Caravan exclusions

A
  • the All risk exclusions
  • theft while left unattended, unless closed and locked
  • hire/reward
  • business use
  • storm/flood damage to an awning
90
Q

Caravan cover is now offered as

A

IT’s now offered as a standalone policy and not an add on to household policy

91
Q

Small Craft cover is provided in four sections

A
  • Accidental loss/damage to craft/machinery/equipment
  • personal effects
  • salvage charges
  • liability to third parties and passengers
92
Q

What are the exclusion of small craft

A
  • hire/reward use
  • business use
  • liability for injury to employees
  • theft of outboard motors/gear/equipment it may be included subject to specified security measures
93
Q

Sports equipment covers

A

It covers accidental loss/damage to sports equipment and specialist sports clothing by any member of the household

94
Q

What are sports equipment exclusions

A
  • motor vehicle/trailers/caravans
  • damage while equipment is in use
  • living creature
  • bicycles
  • golf balls
  • non-specialists sports clothing
  • camping equipment
  • equipment for certain hazardous pursuits
95
Q

Domestic animal cover is available for

A
  • Horses and ponies

- Cats and Dogs

96
Q

Under domestic animals, horses and ponies section covers

A

This cover includes accident/sickness/death/disease/economic slaughter/loss by theft or straying

97
Q

Under domestic animals, horses and ponies section cover may include

A

temporary incapacity/veterinary fees/saddles.bridles/other riding tack/third party liability/personal accident to the rider and accidental damage to the horseback trailer

98
Q

Under domestic animals, cats and dogs section covers

A

it will cover veterinary fees/accidental death/death from illness/loss by theft/kennel fees while the owner is hospitalized, advertising and reward, third party liability and holiday cancellation following emergency surgery to the pet

99
Q

Legal Expense extension has the following sections

A
  • Recovery cost
  • Civil defense cost
  • Prosecution defense cost
  • Employment dispute cost
100
Q

Legal expense limit is up to

A

50,000 pounds for incurred costs and expenses

101
Q

Recovery costs under legal expenses covers

A

The legal action taken to enforce the legal right of the insured against the third party

102
Q

Civil defense costs under legal expenses covers

A

this is for the defense of certain types of claims not covered by other forms of insurance

103
Q

prosecution defense costs under legal expenses covers

A

defense of certain criminal charges which may arise from unwitting acts of the insured

104
Q

Employment dispute cost covers under legal expenses covers

A

cost of protecting insured’s rights as an employee through its tribunal process

105
Q

What are exclusions for legal expenses cover

A
  • claims relating to events that occurred outside the British Isles
  • Fines and compensation payments
  • cost and expenses not agreed by the insurer
  • claims arising out of the insured’s b’ness,deliberate or criminal act/omission,libel and slander, divorce or matrimonial matters and disputes between landlord and tenant
106
Q

Identity fraud covers

A
  • the cost of notarizing necessary documentation
  • attendant costs like loss of earning from time taken off work to attend meeting within financial institution and police
  • administration fees of reapplying for a loan that previously was refused due to incorrect data being provided by credit reference agency
107
Q

One of the exclusions of building and content insurance is insurers generally impose a matching pairs or matching item clause,which is

A

This clause states insurers is not liable for the cost of replacing any undamaged item that is part of a set or suite or items of a uniform nature

108
Q

How do insurer offer travel insurance

A

They offer travel insurance on two or three levels of cover with different limits and premiums

109
Q

Travel insurance coverss

A
  • personal accident benefits
  • medical and associated expenses
  • loss of deposits
  • baggage/personal effects and money
  • personal liability
  • delayed baggage
  • hospital cash benefits
  • travel interruption
  • travel delay
110
Q

Under Travel Insurance, the personal accident benefits section provides benefit of

A

Benefit between 10,000 and 25,000 pounds for death/loss of eyes/limbs/permanent total disablement following an accident

111
Q

When is the personal accident benefit under travel insurance reduced

A

The death benefit is reduced for children under 16 years

112
Q

Personal Accident benefits under travel insurance exclude

A

It excludes hazardous activities like winter sports/water skiing/pot-holing/mountaineering

113
Q

Medical and associated expenses under Travel insurance cover

A
  • Medical Treatment
  • Additional hotel/travelling expenses
  • additional cost of bringing home the patient
  • Additional expenses of those in the insured party
114
Q

What does the loss of deposit section of travel insurance cover

A

It provides reimbursements of deposits and payments made for transport and accommodation booked and not used by the insured due to necessary and unavoidable cancellation of holiday/journey as a result of causes beyond their control

115
Q

What are the possible causes of loss of deposits

A
  • death/illness/accident of the insured/defined close relatives, or any person with whim the insured intends to travel or a close b’ness associate
  • insured being called for jury service/witness
  • unemployment through redundancy( prior notice not provided)
  • unforeseen accumulation of work
  • theft/fire at home or work
116
Q

In travel insurance cases, what must cancellation be due to

A

It must be a direct and necessary consequence not just due to disinclination to travel or financial difficulty

117
Q

Baggage cover under travel insurance covers

A

loss or damage of personal belongings including clothing and personal effects

118
Q

Under baggage cover for travel insurance, what is excluded

A

Losses of unattended baggage

119
Q

Sum inured for baggage cover is usually between

A
  • 1000 pounds and 2,000 pounds single article limit of 250 pounds
  • valuable limits of 200 pounds and 500 pounds
  • Excess of 35 pounds
120
Q

Personal liability cover under travel insurance covers

A

insured’s legal liability for injury to third parties or accidental loss of damage to third party property. Limit of indemnity is between 500k and 2m pounds

121
Q

Delayed baggage cover under travel insurance

A

This is the cost of buying essential items of clothing and toiletries required following the delay of baggage for a certain period beyond the time at which it should have arrived usually 12 hours

122
Q

Hospital Cash benefit under travel insurance

A

It provides cash benefits for when the insured is confined to hospital

123
Q

Travel interruption under travel insurance covers

A

this covers failure of public transport to deliver the insured to the departure point on either outward or return journey in time to take the trip booked

124
Q

Travel delay section under travel insurance covers

A

IT covers delay of the aircraft/ship in which the insured has arranged to travel for at least 12 hrs of original departure time due to strike/industrial action/adverse weather conditions/mechanical breakdown/structural defect affecting the aircraft is covered

125
Q

Travel Insurance as a packaged policy cater to

A

It is catered for the average holiday maker, as reflected in the sum insured for baggage and personal effect

126
Q

A tailor made policy for travel insurance is for

A

This type of policy would need to be taken out if sums insured exceeds normal packaged policy limits

127
Q

What are the optional extensions of Travel Insurance

A
  • Failure of tour organizer
  • Lack of services/Amenities
  • Loss of passport
  • Legal Expenses
128
Q

Failure of tour organizers is usually provided in which policies

A

IT’s covered in policies covering holidays booked through a member of the Association of British Travel Agents or ABTA licensed tour operator/coach operator/shipping line/railway company/airline

129
Q

lack of services or amenities section under travel insurance covers

A

It will operate where there is a substantial withdrawal of services at a hotel where the insured is staying, due to strikes/industrial action lasting for at least 48 hrs. Benefit is around 20 pounds

130
Q

Loss of passport section of travel insurance covers

A

It covers additional travelling and accommodation costs incurred in obtaining a replacement of passport following loss or theft

131
Q

Legal expenses section of travel insurance covers

A

Legal costs and expenses in pursuing claims for compensation/damage arising out of death or injury of the insured

132
Q

Increase in Pet insurance has led to insurers offering which extension

A

A special extension which covers extra kennel or cattery fees if the start or the return of the original journey is delayed

133
Q

What are some of travel insurance exclusion

A
  • Death/Sickness/bodily injury caused by unprescribed drugs/intoxicants/insanity/pregnancy/childbirth
  • Loss of luggage cause by confiscation;manuscripts/stamps/documents/camping requirements; cash/cheques unless reported to the popo within 24 hrs
  • damage to fragile object
  • Terrorism
134
Q

With Travel Insurance Geographical limits vary among insurer, but what are the most common areas to which different premium rates apply are

A
  • UK
  • Europe and countries bordering the Mediterranean/Madeira and Canary Island
  • World wide
  • World wide excluding North America/Wet Indies/Bahamas/Bermuda
135
Q

Why were Packaged policies designed

A

They were designed to cater to small b’nesses like traders and shopkeepers that face many risk and will require more than one type of insurance like fire/BI/theft/Money/glass, thus packaged policies cover these various classes of insurance within one policy

136
Q

Packaged polices are most commonly available for

A

Hoteliers and Shopkeepers and other specified traders

137
Q

For commercial package insurance policies, how is property covered

A

everything in the trade premises or shop is covered including stock. Fixtures and fittings and internal decorations for which the insured is responsible for as a tenant is included

138
Q

For fixture/fittings and internal decorations if the insured is not a tenant but owner of the building then

A

Building instance will be required, however some insurances can be extended to include building cover

139
Q

Risk covered under commercial package policies include

A
  • Fire and additional perils
  • Business Interruption
  • Theft
  • Money
  • Glass
  • Assault
  • Good in Transit
  • Public Liability
  • Employer’s Liability
  • Product Liability
140
Q

Business Interruption covers

A

The loss of trading profit and increased cost of working due to an interruption of business arising from damage caused by an insured peril

141
Q

What are the optional extensions for commercial packaged insurance

A

-Business All Risk
-Refrigerated Stock
Legal expenses

142
Q

Refrigerated stock covers

A

the spoilage of freezer contents due to breakdown of the appliance or failure of the public electricity supply.

143
Q

Refrigerated stock excludes

A

Deliberate action by the supply authority causing spoilage of freezer content

144
Q

Business all risk is also known as

A

Extended theft cover,

145
Q

Business all risk covers

A

accidental loss/damage and is bought as an extra protection for fixtures and fittings, trade equipment and also stock

146
Q

Business All risk excludes

A

Shoplifting and pilferage,also subject to an excess

147
Q

Most insurers are now providing cyber risks within package policies for the SME market. These covers offered under cyber risks are

A
  • Cyber Liability
  • Data breach Expenses
  • Cyber Crime
  • Computer system damage, data, extra cost and business income

IF 2 (13 decks)

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