Policy Wordings And Renewals Flashcards
A woodwork company has a fire insurance policy containing a clause which requires the removal of any sawdust shavings from the premises at the end of each working day. Failure to do so may make any associated claim invalid. This is known as
Warranty
Under which part of a property insurance policy will the insured perils be listed?
Operative clause
A fire occurs at a factory one month after the insurance policy renewal date, but the renewal premium has NOT been paid. What is the legal position of the insurer in the event of a claim?
The insurer can reject the claim in it’s entirety.
Which part of an insurance policy personalises the cover to the insured?
The schedule
A household insurer usually grants a limited grace period in order to give an insurance policyholder time to
Pay the renewal premium, this will never apply to motor because Renewal notice, receipt and certificate or prepared in advance of the renewal date
Under the cancellation clause of a personal insurance policy, what postal method does the insurer usually use to advise the insured that the policy is cancelled?
A recorded delivery letter to the insured’s last known address
Under a cancellation clause, when may an insurer cancel an insurance policy?
At any time during the period of the policy
A franchise is a policy term whereby…
The insurer pays the full value of any claim which exceeds an agreed amount
A time franchise
Is what you see in sickness cover
A public liability policy contains a condition press send on to liability concerning precautions to be taken when using cutting torches. In the event of a claim for damages arising out of the use of cutting torches if the insured has specifically failed to comply with this condition than the insurer will normally
Refuse to settle the claim
Under CIDRA what rights does an insurer have when a consumer makes a careless miss representation?
The insurer can act as it would have done if the question had been answered correctly. For example if it would have charged a higher premium it can pay the claim in proportion to the reduction in premium gained by misrepresentation
Under CIDRA what rights does an insurer have when a consumer makes a reckless miss representation?
The insurer can treat the policy as void and decline all claims
What are the main components of an insurance policy?
Heading. Recital clause or preamble. Signature. Operative clause. Exclusions. Conditions. Policy schedule
What is the purpose of the operative close
Describe the scope of the cover in detail
What are the general exclusion is common to all property insurances
War and related pebbles. Riot and civil commotion. Radioactive contamination and explosive nuclear assemblies. Terrorism. Pollution and or contamination. Marine policies and sonic bangs
Which policy conditions are common to most general insurances
Duties of the policyholder. Alteration. Action by the insured in the event of a claim. Fraud. Reasonable precautions. Average for property insurances. Contribution. Subrogation. Arbitration and cancellation
What is an excess
An excess is the first amount of each and every claim that is born by the insured
What is a deductible
A deductible is a very large access and applies to commercial rather than personal insurances
What is a franchise
A franchise is a threshold used to determine whether claims are payable at all if the threshold is exceeded the claim is payable in full
What are the two main categories of policy conditions?
Conditions precedent to the contract. Conditions precedent to liability.
What is the purpose of a renewal notice
A renewal notice brings to the insured attention to the fact that the insurance contract is about to expire. The premium to renew the policy is shown on the renewal notice
Policy wording
policies are issued in a schedule form. The policy wording is pre-printed and a schedule, containing the variable information concerning the actual risk insured is incorporated at the end of the policy.
Policy wordings
For personal policies basic policy wording so often available in view online
Policy wordings
General insurance policies usually contain a heading, a recital clause and a signature
The operative clause is described as
The scope of the cover and sections detailing the exclusions and conditions are also included
What is a recital clause
Set the scene for what follows in the policy by referring to the two parties insured and the insurer but not by name, coming together to form the contract by which the insurer in return for the premium, undertakes to indemnify the policyholder in accordance with the cover detailed in the policy
What are the elements in a recital close
Policy conditions. Schedule application to the insured. Proposal confirmation. The insured is also a reminder to check the accuracy of the contents of the proposal confirmation as failure to provide the correct information they may result in a policy pain invalidated a client being rejected or claim not being paid in full
The proposal form
The proposal form is part of the contract even though it is not printed within the policy
Specific and general exclusions
Specific exclusions relate to that particular part of the policy. General exclusions apply to the policy as a whole like market exclusions
Oh policies contain a list of conditions and some are coming to the policy types for example
Conditions relating to the duties of the insured, conditions are average, contribution and subrogtion
What is a compulsory excess
It is imposed on the insured by the insurer
What is a voluntary excess
Accepted by the insured in return for a premium discount
Information and facilities many policies also provide information on a number of topics such as
Definition of word terms used, a statement of customer service standards and the complaints procedure
What is a franchise not to be confused with a time franchise
A franchise is a fixed amount or period that acts as a freestyle to determine whether claims are payable. Once the amount or period is exceeded the claim is paid in full
What is a time franchise
A time franchise relates to personal accident and sickness. Four sickness it can be paid up to 104 weeks. A claim cannot be made within the first 21 days of taking out the policy. In a sickness policy you must be ill for more than seven days to receive benefits
What is a warranty
Are you warranty is a stipulation made in a policy that certain things are so and remain so or that a certain thing will or will not be done. I warranty must be strictly complied with
In the event of breach of warranty what are the FCA rules
An insurer will not repudiator claim made by consumer on the grounds of breach of warranty if it is unrelated to the loss
Warranties under the insurance act 2015 are regarded as
Suspensive and only relieve insurers of liability while the warranty is not complied with and where the lost relates to the risk the warranty was designed to mitigate
Conditions can be precedent to the contract or precedent to liability
precedent to the contract I’m not complied with the validity of the insurance contract is put in doubt. For example insurable interest
Conditions precedent to liability must be complied with…
If I claim is to be valid
How is exclusions defined
It is defined as the boundaries of the policy cover
What are representations
Representations are the information provided during the negotiations which form the basis of the insurance but which do not appear within the policy. Given a force information is called misrepresentation
Renewals
Most policies one for period of 12 months and in most cases insurers will look to secure the business for another year although they have no obligation to do so
What do the FCA rules state about renewal notice
That this must be done insufficient time and contain sufficient information to enable the customer to make an informed decision
What must they renewal notice include for consumers
Renewal premium, the previous years premium and a statement that the consumer should ensure that the level of cover is appropriate and compare prices and cover with other providers. Renewal premium can be paid at once or in instalments
Under the cancellation clause of a personal insurance policy what minimum period of time as an issue a give the policyholder when sending the required registered letter to the policyholders last known address
Seven days
Where in an insurance policy does it usually state that the insurer will not be liable to pay a fraudulent claim
The general conditions
In general insurance policy details of the insured on the subject matter of insurance or given in the
Policy schedule
What key financial information we’re an underwriter ask a proposal in order to write a professional indemnity risk
Gross revenue
During the course of negotiating a business insurance contract a proposal may make statements concerning the nature of risk this type of statement is known as
Representation
A fifth insurance policy contains a stipulation that they insured premises are protected by a burglar alarm what does the stipulation constitute
An express warranty
A Market exclusions apply
To all areas of general insurance policies
Arbitration relates to
Only to disputes regarding the amount of the claim
What is the purpose of the policy schedule
The purpose is to make the policy personal and specific to the insured a policy which is in a schedule form is issued using a pre-printed wording
What is an operative clause
Sets out the cover provided
Although radioactive contamination and explosive nuclear assemblies are part of a market explosion it can be insured through
Specialist market pools
Terrorism is a market explosion by insurance can be available through
Reinsurance Pool RE any resulting amount that can’t be paid the government will chip in
Specific exceptions apply to
An individual section of a policy
General exceptions Apply to
The whole policy like market exclusions
Under contract certainty Policy documentation connected with renewal for a consumer must be provided no later than
Seven working days after renewal
The counterterrorism and border security act extended to terrorism cover offered by POOL RE To include
None damage business interruption losses
What does the preamble state
That it is a contract between the insured and insurer
The FCA rules covering renewals for consumer customers applies to
All policies with a duration of 10 months or more
The information and facility facility section of a policy contains information on what to do in the event of an accident this is most commonly found in what type of policy
Private motor
A condition subsequent to the contract must be
Complied with once the contract is in force
