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Property Insurance Flashcards

1
Q

What is the purpose of Fire and Special Perils Insurance

A

The purpose is to provide compensation to the insured person/firm in the event of damage to the property insured

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2
Q

In the commercial world what does specified perils in a fire policy mean

A

This means that cover is built up to meet the insured’s requirement unlike household policy type

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3
Q

What does the standard fire policy cover

A

The standard fire policy covers damage to property caused by fire/lightning and limited to explosions. Due to the narrow range of cover offered by this policy in its basic form a number of extra perils can be added to this basic policy

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4
Q

Which association recommended wordings for fire and special perils

A

The Association of British Insurers and they called the wordings Standard fire and Special Perils Policy(Material Damage)

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5
Q

In the Standard Fire and Special Perils Policy what does the word DAMAGE mean

A

This means loss or destruction of or damage to the insured property

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6
Q

What is a standard fire cover made up of

A

It is made up of Fire. Lightning and Explosion

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7
Q

In a standard fire cover, the fire section covers

A

It covers damage to property cause by fire, but excludes

  1. explosion resulting from fire
  2. earthquake/subterranean fire
  3. its own spontaneous fermentation/heating/undergoing any heating process
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8
Q

The exclusion of spontaneous fermentation is meant to

A

It is meant to exclude cover for specific item which ignite spontaneously, without no external cause

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9
Q

In a standard fire cover, the lightning section covers

A

This covers all damage or destruction caused by lightning

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10
Q

In a standard fire cover, the explosion section covers

A

Limited explosion cover is provided under standard fire. This is restricted to explosions of boilers or gas for domestic purposes only

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11
Q

Under Explosion section of the fire policy, how do the courts define domestic purposes

A

This is defined as purposes related to the home, irrespective of the occupation of the actual building

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12
Q

The Special Perils for which cover is usually available may be grouped under

A
  1. Perils of a chemical type
  2. Social Perils
  3. Perils of nature
  4. Miscellaneous Perils
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13
Q

What do special perils result to

A

They result to damage to property

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14
Q

For Explosions what does the special perils section offer

A

The special perils section offers additional explosion cover, excluding

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15
Q

What are the exclusions that apply to explosion cover

A
  1. Explosion of the insured’s own steam and other pressure vessels subject to inspection under statutory regulations
  2. Fire resulting from explosion
  3. domestic explosion
  4. Sonic bags is a standard exclusion in all material damage insurance.Government provides compensation or the airline responsible will
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16
Q

What are Sonic Bags

A

These are Pressure waves from sonic/supersonic aircraft or other aerial devices

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17
Q

For Aircraft what does the special perils section offer

A

This covers damage caused by crashing of an aircraft/aerial device/part of an aerial device.Also includes damaga by articles dropped from aircraft.This is concerned with damage other than by fire.Sonic bags exclusion applies

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18
Q

For Riot and Civil Commotion what does the special perils section offer

A

There are two types of cover

  1. A narrow form of cover, provides cover for fire as a result of riot/civil commotion
  2. Wide form of cover, includes damage caused by riot/civil commotion
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19
Q

What does the riot/civil commotion cover exclude damage as a result of

A
  1. Cessation of work

2. confiscation/requisition/destruction by order of gov’t or public authority

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20
Q

For Malicious Damage what does the special perils section offer

A

Covers for damage cause by malicious person, its only available as an extension of the riot cover. Cover is in respect of malicious damage of any kind extending to political and non political malicious damage to all

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21
Q

Malicious Damage specifically excludes

A

Cover in respect of non-political malicious damage specifically excluding DAMAGE arising from theft and any building that is empty or not in use. Excess of 250 pounds always applied

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22
Q

For Earthquake what does the special perils section offer

A

Even though not covered under a normal standard fire policy.The special peril section of the wording may include this peril, usually includes either for shock risks only or for fire and shock risks. Same applies for Subterranean fires

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23
Q

For Storm what does the special perils section exclude

A
  1. Damage caused by the escape of water from normal confines of any natural or artificial water course
  2. resulting from a change in the water table level
  3. damage caused by lightning/frost/landslide/heave
  4. damage to move-able property in the open/fences/gates
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24
Q

Flood Cover is only granted in conjuction with

A

It is offered in conjunction with storm cover

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25
Q

How is the flood cover expressed

A

The insurance us expressed as a storm and flood cover and the first exclusion of damage caused by the escape of water is omitted from the wording(thus meaning its no longer an exclusion like in the storm cover). But the remaining three other exclusions for storm cover remain and the excess apply

26
Q

For Escape of Water what does the special perils section exclude

A

This cover applies in respect of damage following the escape of water from tanks,apparatus or pipes. Excess is 25

27
Q

What does Escape of Water peril excludes

A

This special Peril specifically excludes damage

  1. to any building that is empty/not in use
  2. by water discharged/leaking from any automatic sprinkler installation
28
Q

When is an own impact Special peril cover usually used for

A

This extended cover is often requested in an industrial situation, where a number of fork lift are used in a factory. Excess atleast 250#

29
Q

Which restriction does an impact Special peril cover usually have

A

Losses that result from animals/vehicles owned by the insured/occupiers of the premise/ employees

30
Q

What is the Impact special peril cover restricted to

A

It covers losses restricted to damage caused by vehicles/animals owned by third parties against whom insured generally has a right to recovery

31
Q

What is the sprinkler leakage Special peril cover usually used for

A

The peril insured against accidental escape of water from any automatic sprinkler installation

32
Q

The sprinkler leakage Special peril cover usually excludes

A
  1. freezing while the premises are empty/not in use

2. explosion/earthquake/subterranean fire/heat caused by fire

33
Q

What are some of the cases that are covered by the sprinkler leakage special peril cover

A
  1. Damage to the sprinkler head by impact of an object
  2. Mechanical defect in installation
  3. water freezing causing the pipes to burst
34
Q

What is the subsidence/ground heave/landslip Special peril cover usually used for

A

This peril covers subsidence/ground heave of any part of the site in which the property stands or landslip

35
Q

The subsidence/ground heave/landslip Special peril cover usually excludes

A

This peril specifically excludes damage

  1. to yards/car-parks/roads/pavements/walls/gates/fences unless the insured building is affected
  2. which originated before policy inception
  3. resulting from demolition/construction/excavation/groundwork
36
Q

What are the overall Property Insurance policies exclusion

A
  1. riot/civil commotion(subject to inclusion of additional premium is paid)
  2. War Risk
  3. Terrorism
  4. Marine Polices
  5. Radioactive Contamination
  6. Pollution/contamination
  7. Northern Ireland excluded Perils
  8. Consequential Loss
  9. More specifically insured clauses
37
Q

Standard All Risk Policy( Material Damage)

A

This is issued by the ABI recommended wordings for all risk property insurance

38
Q

How does the all risk policy cover work

A

This covers accidental loss/destruction/damage to the property of the insured. Provided it has occurred accidentally and the cause is not specifically excluded from the policy

39
Q

How many groups are the exclusions for all risk divided to.

A

The exclusions are extensive as there are many aspects the insurers are unwilling to cover. The four groups of exclusions are

  1. .Those that are absolute exclusions
  2. Those which relate to an aspect of cover which can sometimes be included on policy with careful underwriting
  3. Exclusions which relate to an aspect of cover which can be written into the policy
  4. Exclusions which relate to property/risks which are more appropriate to another class of b’ness this can’t be covered
40
Q

How does Theft Insurance work

A

It is similar to the standard fire policy, the only difference is it doesn’t relate to buildings. However Damage to the building is covered, provided insured is responsible for the cost of repair occurring during the theft, usually with a limit

41
Q

What does theft policies do that is different to fire policies

A

Theft policy always distinguish between different types of stock in the policy wordings. As specific items and sum insured apply to stock depending on the attractiveness it has upon thieves

42
Q

What is the standard market wording for theft cover

A

There is no standard market wording for theft cover but it usually goes as Theft involving entry/exit from premises by forcible and violent means

43
Q

A more restricted theft wording does not cover

A

Entry into the premises by
1.key
2.a trick
3.hiding on the premises while its open for b’ness
Cover would only apply if there was an element of fore/violence used in exiting the premise and if the keys were obtained by forcing or threatening employees/directors/their families

44
Q

For a more particularly hazardous risk, what wording will theft insurance include

A

It will state “Theft following forcible and violent entry”

45
Q

Theft Cover may also be extended to include the risk of hold- up. what is hold-up cover

A

This is theft accompanied by assault/violence to the insured/their employees irrespective of whether forcible entry takes place

46
Q

For theft insurance insured can use insurance on a first-loss basis

A

The insured must chose the first loss sum insured for such policies but must also declare the full value

47
Q

For first loss basis of theft insurance, how are claim settlements adjusted

A

They are adjusted on the basis of the full value at risk compared with the declared full value

48
Q

What are the common optional extensions in a theft insurance policy subject to an additional premium

A
  1. Breakage of glass
  2. Replacement of locks
  3. Temporary removal
  4. Index Linking
49
Q

What are the three optional extensions for theft insurance , that available subject to careful underwriting and an additional premium

A
  1. Collusion
  2. Extended/full theft
  3. Robbery/aggrevated burglary
50
Q

What does the Collusion optional extension entail

A

It entails cover is provided for plotting and agreement between thief and employees on how to gain easy access and entrance for theft to take place

51
Q

What does the extended/full theft optional extension entail

A

This cover removes the normal phrase of forcible entry. And provides cover for losses when entry/exit is achieved via open doors and windows

52
Q

What does the robbery/aggravated burglary optional extension entail

A

This provides cover for loss where premises are open for b’ness. For robbery there must be a use of force and for aggravated burglary the possession of fire arms

53
Q

What are the limitations for Theft Insurance

A
  1. Collusion- even though it can be bought back
  2. Fire and Explosions- should be insured under a fire policy
  3. Cash and bank Notes- insured under money policy
  4. Livestock- unless specifically included under theft policy, they go under livestock policy
54
Q

Why is theft insurance often sought on a first loss basis

A

This is because the insured recognizes that a potential thief will be selective in what they steal

55
Q

What does Glass Insurance cover

A

This cover is not restricted to plate glass, but extends to include covers for all kind of fixed glass. It covers destruction/damage to all fixed glass

56
Q

For glass insurance, cover is an all risk basis, what does it not cover

A

It doesn’t cover damage by scratching/chipping

57
Q

\What options do insurers give insured for glass damage

A

Repair/Replacement/Reinstatement/Cash Settlement. The most common one is replacement

58
Q

What are the optional extensions for glass insurance that will inquire additional premium

A
  1. damage to shopfront contents as a result of broken glazing
  2. damage to wash bins and sanitary fittings in salons
59
Q

What are the limitations for Glass Insurance

A

The typical fire/lightning/explosions an excess of 50 pounds to avoid small losses

60
Q

What does money insurance always include

A

It always includes cash,bank,currency notes,cheques, postal,money orders,postage stamps,national insurance cards and luncheon vouchers

61
Q

Money Insurance is covered on what basis

A

Money Insurance is on an all risk basis, thus covering risks of loss/destruction/damage to money in different situations

if 2 (13 decks)

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