Property Insurance

Question 1

A haystack in a farmers field suddenly bursts into flames. Before the fire brigade has time to reach the field, the fire has spread to a neighbouring haystack on the farm. The flames are also carried by the wind into the farmers barn. What would be covered by the standard fire policy?

Answer 1

The standard fire policy would cover damage to the neighbouring haystack and barn but not the damage to the first haystack.

Question 2

Why does escape of water specifically exclude damage that occurs while the premises are empty?

Answer 2

The exclusion reflects the greater risk of freezing in an unheated building in the winter and aggravation of loss that may occur following to light discovery in the unoccupied premises.

Question 3

What does the word damage mean?

Answer 3

Loss or destruction of or damage to the property insured. Special perils must result in damage to the property

Question 4

The standard fire and special perils policy material damage are made up of what three parts?

Answer 4

Fire lightning explosion

Question 5

The special perils are an optional extension and are grouped into four categories which are

Answer 5

Perils of a chemical type. Social perils. Perils of nature. Miscellaneous perils.

Question 6

For theft of shop stock to be covered under a standard VAT policy they would only usually need to be…

Answer 6

Forcible and violent entry or exit.

Question 7

Why is money not included in a theft insurance policy?

Answer 7

In the case of theft, most losses are subject to the restricted wording of forcible and/or violent entry/exit. If this were the case with money insurance much of the risk involved in cash handling and transit would be removed leaving mainly the outside business hours element of cover cover therefore by it’s very restriction A theft policy would serve a limited purpose only.

Question 8

What does the definition of money under a standard money policy include?

Answer 8

Bank and currency notes. Luncheon vouchers. Postage stamps. Postal orders.

Question 9

What are the three perils covered by the standard fire policy?

Answer 9

Fire, lightning and restricted explosion.

Restricted explosion means it is only limited to domestic purposes such as household boilers.

Question 10

All risks exclusion may be divided into four groups or headings what are these headings?

Answer 10

Those exclusions which are absolute. Those exclusions which relate to an aspect of cover which could be written into the policy with care. Those exclusions which relate to an aspect of cover which could be written into the policy. Those exclusions which relate to property or risks more appropriate to another class of insurance.

Question 11

What are the optional extensions to a standard glass policy?

Answer 11

Damage to shopfront contents as a result of broken glazing. Damage to wash basins and sanitary fittings in hairdressing salons

Question 12

What is the cover generally provided under a standard money policy?

Answer 12

Money insurance is on an all risk basis covering loss from any cause whether it is in transit or on the premises subject to agreed limits.

Question 13

What are the optional extensions to a standard money policy?

Answer 13

Credit cards and personal accident assault risks possibly including damage to clothing and personal effects.

Question 14

Standard fire cover excludes

Answer 14

Explosion resulting from fire. Earthquake or subterranean fire. Spontaneous fermentation or heating or is undergoing any heating process or any process involving the application of heat.

Question 15

The Special peril section offers additional explosion coverage from what type of risks?

Answer 15

Emanating from chemical reactions that produce suddenly expanding gases. Flammable vapours and gases are encountered in many industries often been released from solvents that are present in for example paint sprays and adhesives. In other industries potentially explosive dust are used or produced as part of the manufacturing process examples been in the production of fertilisers and flour.

The bulk storage of cereals and sugar also gives rise to explosion hazards.

Question 16

What are the standard market exclusions for property insurance?

Answer 16

Riot or civil commotion although this exclusion may be removed on payment of an additional premium. Water risks. Radioactive contamination/explosive nuclear assemblies. Northern Ireland excluded perils. Terrorism. Pollution or contamination. Marine policies. More specifically insured clauses. Consequential loss i.e. loss following and consequent upon a loss approximately caused by an insured peril.

Question 17

What is an all risk insurance cover

Answer 17

Loss and destruction unless excluded or restricted in someway in a policy. Therefore all loss of destruction of or damage to the property insured is recoverable provided that it has occurred accidentally and that the cause is not specifically excluded from the policy.

Question 18

Why was all risks insurance developed?

Answer 18

To give border cover down the standard policy and exclude problem risks rather than adding contingencies.

Question 19

In an all risk insurance what do policies contain?

Answer 19

Policies contain limits of liability and Some provide cover on a first loss basis.

Question 20

Insurers extend the legal definition of theft to include

Answer 20

The use of force and violence in breaking in or out of the insured premises.

Question 21

In theft insurance what are the optional extensions?

Answer 21

Breakage of glass. Replacement of locks. Temporary removal. Index linking.

Question 22

What is index linking

Answer 22

It’s an optional extension in fifth insurance where the sum insured are kept reasonably up-to-date. This means that they are adjusted on a monthly basis by the percentage change in the retail prices index this is used to measure inflation in the UK.

It is free of charge

Question 23

What are three extensions of fist cover available subject to careful underwriting?

Answer 23

collusion, Extended or full theft, Robbery and aggravated burglary

Question 24

What is the limit of liability in respect of theft insurance?

Answer 24

Cover is often sought on a first loss basis because the insured recognises that a potential thief will be selective on what they steal. In light of this insurers usually allow a small premium discount for such cover provided that they are satisfied that their true liability is potentially reduced.

Question 25

Glass insurance covers what?

Answer 25

All types of fixed glass.

Question 26

What are the optional extensions in glass insurance?

Answer 26

Damage to shopfront contents as a result of broken glazing. Damage to wash basins and sanitary fittings in hairdressing salons. There is usually an excess of £50 in order to avoid claims for small losses.

Question 27

In glass insurance why is damage caused by fire, lightning or explosion excluded?

Answer 27

Because these are covered under a standard fire policy.

Question 28

Why does the average not apply to money insurance?

Answer 28

Because the sum chosen is the limit that they will receive. Each situation covered has its own policy limit and money insurance is provided on an all risk basis.

Question 29

What extensions are available to money insurance?

Answer 29

Personal accident assault giving A victim compensation can also include damage to items of clothing and personal effects.
Credit cards. It covers the fraudulent use by unauthorised person.

Question 30

In money insurance what are the specific exclusions?

Answer 30

Lost due to an error or omission in accounting/counting and bookkeeping.

Lost due to dishonesty of an employee not discovered within seven days. Lost destruction or damage of rising outside Great Britain Northern Ireland the Isle of Man all the channel islands. And lost resulting from the safe or strong room being opened by a key or by using the combination to a safe where this has been left on the insured premises well closed for business.

Question 31

What are the limits of liability in a money insurance policy?

Answer 31

It would be unusual to find a limit of more than £500 from money left out of a safe on the business premises overnight. Whereas a limit of £5000 is not uncommon in respect of money in transit.

Question 32

Which insurance policy is most likely to provide personal accident benefits to the employee for the injuries sustained during the robbery?

Answer 32

Money policy

Question 33

What element of cover under a buildings insurance policy normally attracts a substantial compulsory excess?

Answer 33

Subsidence ground heave landslip

Question 34

In what way are legal costs for landlord/tenant disputes normally covered, if at all, under the legal expenses extension of a household insurance policy?

Answer 34

They are not covered

Question 35

A commercial property insurance policy will usually exclude damage arising from impact by

Answer 35

Own vehicle

Question 36

For theft of shop stock to be covered under a theft insurance policy, there would usually need to be evidence of

Answer 36

forcible and violent entry to or exit from the premises.

Question 37

What amount should the sum insured under the buildings section of a household insurance policy represent?

Answer 37

Cost of rebuilding

Question 38

Under a household insurance policy, subsidence cover responds to damage caused by

Answer 38

Tree roots

Question 39

A basic feature of glass insurance is that it will exclude glass breakages caused by

Answer 39

Fire lightning explosion

Question 40

When a commercial insurance policy includes an all risk section means that cover is provided

Answer 40

Away from the risk address