PACKAGED INSURANCE Flashcards
1
Q
Why do insurers tend to produce packaged policies
A
When there is sufficient homogeneity of risk
2
Q
What is Homogeneity of risk
A
This is a situation where many risks share similar characteristics and follow similar trends
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
4
Q
For Household claims there are two options for settlement when the item concerned is irreparable
A
- Indemnity
2. New for Old Compensation
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
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
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
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
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
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.
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
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
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
14
Q
The Legal Liability section for Content include
A
It protects the interest of the insured as
- an occupier of the property rather than the owner
- a private individual for personal liability,liability doesn’t need to be linked with the occupation of the building
- as an employer of domestic employees
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
16
Q
Falling trees or branches cover excludes
A
It excludes damage to gates/fences/hedges
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
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
19
Q
Escape of oil covers
A
Damaged by escape of oil from any fixed oil-fired heating system. Unfurnished/occupancy exclusion still applies
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
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
22
Q
Impact/collision cover excludes
A
Damage caused by pets
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
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
25
Breakage or collapse of television or radio receiving aerials, aerial fittings and masts covers
IT covers damages to the building from the collapse of the aerial
26
Breakage or collapse of television or radio receiving aerials, aerial fittings and masts doesn't cover
Damage tot he aerial device that is under content insurance
27
Accidental breakage of glass and sanitary fixtures cover
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
28
Legal fees, architects and surveyors fees, cost of debris removal excludes
The cost involved in preparing the insured's claim
29
Legal fees, architects and surveyors fees, cost of debris removal covers
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
30
what is the loss pf rent limit for insurers
It's usually 10-15% of the building sum insured
31
For Loss of rent, some insurers offer a reasonable accommodation expenses, what do they take into account
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
32
Loss of rent cover is provided
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
33
Insurer offer accidental damage extension to household policy but it is subject to
It is subject to a higher premium and always an excess on atleast 100 pounds
34
Accidental damage cover will include
- drilling through a pipe
- hammering a nail through an electric wire
- putting a foot through a ceiling
35
Accidental damage extension excludes
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
36
Content insurance in respect to household is defined as
Household goods and personal effects belonging to the insured or family living in the property
37
Content insurance will include
Cash and stamps( not part of stamp collection) to say 500 pounds,any fixtures and fittings that belong to the insured
38
Content insurance will exclude
Anything that forms part of the structure like ceilings,wallpaper and the likes,,satellite dishes and receivers
39
Under content insurance theft or attempted theft of cash/currency/bank notes/ stamps is generally excluded
If it doesn't involve forcibly and violent entry or exit
40
Under Content insurance theft or attempted theft by deception is is excluded if
This type of theft is generally excluded unless the deception is used to get into the home
41
Theft or attempted theft while building is lent/let/sublet in whole or part or if unfurnished will normally be excluded if
It will be excluded if it does not involve forcible and violent entry or exit
42
Under Content insurance accidental damage is excluded on
clothing/contact lenses/money/stamps/coins/medals/plants/food/drink/sports equipment/bicycles
43
Under content insurance what are the limits on items
- single article limit
| - valuables limit
44
What covers are included in content insurance with no additional premium
- Temporary Removal
- Clothing and personal effects
- Accidental Breakage
- Loss of rent
45
Temporary removal cover under content insurance covers
This policy automatically extended to cover the contents while temporary removed but remaining in the UK, Ireland or Northern Ireland
46
How would some insurers limit the amount covered under temporary removal
They may limit amount covered at any one time under this extension to be let's say 20% of sum insured contents
47
Temporary removal excludes
It excludes risk of storm and flood as regards to property that is not in a building
48
Under Temporary removal theft or attempted theft is only covered
- 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
49
accidental breakage cover under content insurance covers
Accidental breakage of mirrors and glass on or fixed to furniture
50
Loss of rent under content insurance cover
Loss of rent and reasonable additional expenses incurred for alternative accommodation in the event of the premises becoming uninhabitable
51
Loss of rent cover is usually limited to
It is limited to 10%-20% of content sum insured
52
What are content insurance optional extensions subject to additional premium
- Accidental damage to entertainment equipment
| - Accidental damage while in the course of removal
53
Accidental damage to entertainment equipment covers
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
54
Accidental damage to entertainment equipment covers excludes
damage to portable equipment and tapes and standard accidental damage exclusions
55
Accidental damage while in the course of removal
This covers accidental damage while in the course of removal by professional removers or in temporary storage in a furniture depository. excess applies
56
What are other non-automatic extensions of content insurance
- 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
57
what are the specific exclusions under content insurance
- 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
58
Legal liability limit for content and building insurance is usually
2 million applies to any one claim,
59
Legal liability for building and content is for
The indemnity is for the insured and all family members permanently residing in the property
60
Insuring property on an all risk basis means
The property is insured against any peril that is not specifically excluded
61
why do insurers favor adding accidental damage option to their standard cover
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
What are the optional extensions added to household policy
- 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
all risk cover is available
This cover is available for personal possessions like jewelry,watches,cameras, laptops,tablets regularly taken outside the property.
64
All risk cover is available in conjunction with what cover
It's available in conjunction with content cover
65
For all risk cover for which items will insurer request a separate sum insured
for specified items above a certain sum, but they will cover unspecified item subject to a limit for any one item
66
Definition for unspecified items include
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
What are Specified items
these are items that exceed the unspecified single article limit o which special terms apply
68
Specified items examples are
Jewellry/fur/photographic equipment.
| Sum insured represents the replacement value
69
What are the specific exclusion for all risk cover
- 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
Money cover is
All risk cover wider than the one included under content section
71
Money cover will usually include
Cash/Cheque/Postal order/bankers drafts/postage stamps/certificates/premium bonds/luncheon vouchers/gift tokens and travel tickets
72
Money covers
Accidental loss of money and a limit od indemnity between 200-500 pounds, an excess of around 100 pounds
73
Money exclusions include
- shortage due to error/omission
| - loss not reported to the police within 24 hrs
74
Credit card covers
financial loss following loss or theft of credit card and its subsequent misuse
75
What is a standard condition for credit card cover
Loss should be reported to the card issuer and the police within 24 hrs of discovery
76
Credit card also covers
cheque card,cash card and charge card, credit card
77
What are the additional services some insurers offer
- Emergency Cash (temporary measure)
| - Card registration scheme
78
Limit of liability for credit card cover i is usually
500 pounds
79
What are some of the exclusions of credit card
- unauthorized use of the credit card, by one of the insured's household
- breach of the issuer's term and conditions
80
Bicycle is most commonly covered in
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
What are he exclusions for bicycle cover
- 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
what does freezer content cover
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
What are the exclusion of freezer content
- 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
Caravan cover is provided in three sections
- Caravan and equipment
- clothing and personal effects
- liability
85
The caravan and equipment section under caravan covers
cover is an all risk cover in respect of accidental loss/damage to the caravan,its fixture and fittings, furniture, utensils and furnishing
86
The clothing and personal effects under Caravan covers
Provides all risk cover while property is in the caravan,awning,towing vehicle
87
The liability section under caravan covers
The legal liability for bodily injury or damage to property caused by or in connection with the caravan up to a limit
88
Caravan cover extension while in Europe will last for how many days
30/60/90 days including short sea transit
89
What are Caravan exclusions
- the All risk exclusions
- theft while left unattended, unless closed and locked
- hire/reward
- business use
- storm/flood damage to an awning
90
Caravan cover is now offered as
IT's now offered as a standalone policy and not an add on to household policy
91
Small Craft cover is provided in four sections
- Accidental loss/damage to craft/machinery/equipment
- personal effects
- salvage charges
- liability to third parties and passengers
92
What are the exclusion of small craft
- 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
Sports equipment covers
It covers accidental loss/damage to sports equipment and specialist sports clothing by any member of the household
94
What are sports equipment exclusions
- 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
Domestic animal cover is available for
- Horses and ponies
| - Cats and Dogs
96
Under domestic animals, horses and ponies section covers
This cover includes accident/sickness/death/disease/economic slaughter/loss by theft or straying
97
Under domestic animals, horses and ponies section cover may include
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
Under domestic animals, cats and dogs section covers
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
Legal Expense extension has the following sections
- Recovery cost
- Civil defense cost
- Prosecution defense cost
- Employment dispute cost
100
Legal expense limit is up to
50,000 pounds for incurred costs and expenses
101
Recovery costs under legal expenses covers
The legal action taken to enforce the legal right of the insured against the third party
102
Civil defense costs under legal expenses covers
this is for the defense of certain types of claims not covered by other forms of insurance
103
prosecution defense costs under legal expenses covers
defense of certain criminal charges which may arise from unwitting acts of the insured
104
Employment dispute cost covers under legal expenses covers
cost of protecting insured's rights as an employee through its tribunal process
105
What are exclusions for legal expenses cover
- 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
Identity fraud covers
- 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
One of the exclusions of building and content insurance is insurers generally impose a matching pairs or matching item clause,which is
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
How do insurer offer travel insurance
They offer travel insurance on two or three levels of cover with different limits and premiums
109
Travel insurance coverss
- 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
Under Travel Insurance, the personal accident benefits section provides benefit of
Benefit between 10,000 and 25,000 pounds for death/loss of eyes/limbs/permanent total disablement following an accident
111
When is the personal accident benefit under travel insurance reduced
The death benefit is reduced for children under 16 years
112
Personal Accident benefits under travel insurance exclude
It excludes hazardous activities like winter sports/water skiing/pot-holing/mountaineering
113
Medical and associated expenses under Travel insurance cover
- Medical Treatment
- Additional hotel/travelling expenses
- additional cost of bringing home the patient
- Additional expenses of those in the insured party
114
What does the loss of deposit section of travel insurance cover
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
What are the possible causes of loss of deposits
- 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
In travel insurance cases, what must cancellation be due to
It must be a direct and necessary consequence not just due to disinclination to travel or financial difficulty
117
Baggage cover under travel insurance covers
loss or damage of personal belongings including clothing and personal effects
118
Under baggage cover for travel insurance, what is excluded
Losses of unattended baggage
119
Sum inured for baggage cover is usually between
- 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
Personal liability cover under travel insurance covers
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
Delayed baggage cover under travel insurance
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
Hospital Cash benefit under travel insurance
It provides cash benefits for when the insured is confined to hospital
123
Travel interruption under travel insurance covers
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
Travel delay section under travel insurance covers
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
Travel Insurance as a packaged policy cater to
It is catered for the average holiday maker, as reflected in the sum insured for baggage and personal effect
126
A tailor made policy for travel insurance is for
This type of policy would need to be taken out if sums insured exceeds normal packaged policy limits
127
What are the optional extensions of Travel Insurance
- Failure of tour organizer
- Lack of services/Amenities
- Loss of passport
- Legal Expenses
128
Failure of tour organizers is usually provided in which policies
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
lack of services or amenities section under travel insurance covers
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
Loss of passport section of travel insurance covers
It covers additional travelling and accommodation costs incurred in obtaining a replacement of passport following loss or theft
131
Legal expenses section of travel insurance covers
Legal costs and expenses in pursuing claims for compensation/damage arising out of death or injury of the insured
132
Increase in Pet insurance has led to insurers offering which extension
A special extension which covers extra kennel or cattery fees if the start or the return of the original journey is delayed
133
What are some of travel insurance exclusion
- 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
With Travel Insurance Geographical limits vary among insurer, but what are the most common areas to which different premium rates apply are
- UK
- Europe and countries bordering the Mediterranean/Madeira and Canary Island
- World wide
- World wide excluding North America/Wet Indies/Bahamas/Bermuda
135
Why were Packaged policies designed
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
Packaged polices are most commonly available for
Hoteliers and Shopkeepers and other specified traders
137
For commercial package insurance policies, how is property covered
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
For fixture/fittings and internal decorations if the insured is not a tenant but owner of the building then
Building instance will be required, however some insurances can be extended to include building cover
139
Risk covered under commercial package policies include
- Fire and additional perils
- Business Interruption
- Theft
- Money
- Glass
- Assault
- Good in Transit
- Public Liability
- Employer's Liability
- Product Liability
140
Business Interruption covers
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
What are the optional extensions for commercial packaged insurance
-Business All Risk
-Refrigerated Stock
Legal expenses
142
Refrigerated stock covers
the spoilage of freezer contents due to breakdown of the appliance or failure of the public electricity supply.
143
Refrigerated stock excludes
Deliberate action by the supply authority causing spoilage of freezer content
144
Business all risk is also known as
Extended theft cover,
145
Business all risk covers
accidental loss/damage and is bought as an extra protection for fixtures and fittings, trade equipment and also stock
146
Business All risk excludes
Shoplifting and pilferage,also subject to an excess
147
Most insurers are now providing cyber risks within package policies for the SME market. These covers offered under cyber risks are
- Cyber Liability
- Data breach Expenses
- Cyber Crime
- Computer system damage, data, extra cost and business income
