Chapter 2: Insurance Products - Insurance Claims Handling (non UK)

Why is it necessary to be aware of the features of each type of insurance?

There are various forms of insurance available with specific considerations that apply when handling claims

What kind of insurance is designed for individuals?

Personal insurance

What kind of insurance is designed for businesses?

Commercial insurance

What type of insurance is compulsory in many parts of the world?

Motor insurance

What is true about motor insurance in many countries?

Insurance applies to the vehicle, not to a named driver, meaning anyone with a valid license may drive it

What can make it it illegal to drive or be in charge of a vehicle on a public road unless an insurance policy is in force?

Legislation

What must a motor insurance policy cover?

The driver's legal liability for injury to others and damage to their property

What are the common levels of motor insurance cover available?

• Third party only

• Third party, fire and theft

• Comprehensive

What is the most common form of compulsory motor insurance?

Third party only

What can third party only motor insurance provide?

• Cover for any injuries to the third party

• Third party property damage cover

• Passenger indemnity

• Cover for the legal costs of defending a claim.

What is true about the cover for any injuries to the third party in an accident where the insured has third party only cover?

It is covered regardless if the insured is injured in the same incident

What is true about third party property damage cover in an accident where the insured has third party only cover?

In some regions the insurer will cover all property damage

What are the specific exclusions to third party only insurance?

• Damage to the vehicle itself (regardless of whom was driving it)

• Liability covered by another policy

What is true about damage to the vehicle itself in an accident where the insured has third party only cover?

It is excluded regardless of whom was driving it

What is an example of when liability covered by another policy would not be covered in a claim under third party only cover?

When driving someone else's car, cover may be provided under that car owner's insurance

What type of motor insurance coverage includes the same coverages as third party only but has some coverage for the insured vehicle?

Third party, fire and theft

What are the coverages that are included in third party, fire and theft that are not in third party only cover?

• The cost of repair or compensation to the insured if the vehicle is stolen or damaged during theft or attempted theft

• Damage by fire, lightning or explosion

What is true about the exclusions for third party, fire and theft cover?

• It has the same exclusions as third party only

• Loss of use is specifically excluded

What is the extra expense to the insured of having to use alternative transport whilst their car is out of action?

Loss of use

What benefit do some third party, fire and theft policies include?

The ability to include cover for a hire car if the insured vehicle is stolen or damaged by theft, which would come at an additional premium

What is true about the popularity of third party, fire and theft cover?

It is not a popular product in many regions, but some companies happily offer it at the customer's request for an additional premium

What is the widest possible protection for motor insurance and includes any accidental or malicious damage to the insured vehicle?

Comprehensive

While comprehensive cover is 'all risks', what are the exclusions that normally apply?

• Wear and tear

• Depreciation

• Loss or damage to spare parts and accessories

• Loss of use

• Mechanical and electrical failure

• Tire damage from punctures or blow-outs

What is true about the loss or damage to spare parts and accessories exclusion for comprehensive cover?

It would only be covered if the parts are on/in the vehicle or in the insured's garage

What is true about the loss of use exclusion for comprehensive cover?

This can sometimes be purchased as add-on cover, usually in the form of a hire car

Along with providing coverage for the insured vehicle, what may a comprehensive policy also cover?

• The policyholder to drive a vehicle not belonging to them, only extending to third party liabilities

• Personal accident, medical expenses and personal effects

What is the exclusion to comprehensive cover allowing someone to drive a vehicle that is not theirs?

It does not apply to vehicle under a hire-purchase agreement

What is true about the extensions to a motor policy?

• They are widely available

• May be included as part of the core product

• May be offered as additional add-ons for a slightly increased premium

What are some optional extensions that could be available to a motor insurance policy?

• Breakage of glass

• Personal belongings and clothing

• Young additional drivers

• Loss of use at a fixed amount per day or the provision of a courtesy/hire car

• Additional personal accident benefits

• Racing, competitions, rallies and trials

• Caravans and trailers

• Breakdown cover

• Natural calamities

• Legal assistance

• Joint policies

What is true about the breakage of glass extension for motor insurance?

It may be an optional extension on a non-comprehensive policy as it is usually covered by a comprehensive policy

What is true about the personal belongings and clothing extension for motor insurance?

It is in addition to the limited standard cover provided by a comprehensive policy

What is true about the young additional drivers extension for motor insurance?

These may be added as occasional users, but if they are one of the main drivers then the additional premium charged would be based on their age and experience

What is true about the caravans and trailers extension for motor insurance?

Usually third party only cover is provided whilst attached to the insured vehicle

What is an example of the breakdown cover extension for motor insurance?

The provision of helplines or a certain amount of cover for the costs of roadside assistance

What are the normal exclusions to motor insurance?

• Contractual liability, for situations where the liability would not exist but for the terms of a contract

• War risks

• Use other than as specified in the certificate of insurance

• Riot and civil commotion

• Terrorism

• Sonic bangs

What exclusion in motor insurance deals with damage caused by pressure waves from sonic/supersonic aircraft or other aerial devices?

Sonic bangs

What type of insurance includes any mechanically propelled cycle?

Motor cycle insurance

What are the differences between motor cycle and private motor insurance?

• There is usually no automatic cover for theft of accessories or spare parts unless the motor cycle is also stolen

• The liability section generally indemnifies the insured (or their personal representatives in the event of their death) and others who were permitted to drive the motor cycle or who used it for social, domestic and pleasure purposes

• There is no personal accident, medical expenses (beyond emergency treatment fees) or personal effects cover.

What are the extensions available for motor cycle insurance?

• Accessories or spare parts

• Trailers

• Driving other cycles

• More than one cycle insured

• Invalid carriages

What is a form of motor insurance that is used for businesses?

Commercial vehicles insurance

What are the main types of commercial vehicle insurance?

• Goods-carrying vehicles

• Passenger-carrying vehicles

• Agricultural and forestry vehicles

• Vehicles of special construction

What are examples of vehicles of special construction?

• Ambulances

• Cranes

• Fork-lift trucks

What is commercial vehicle insurance primarily concerned with?

The risks that attach to the vehicles themselves whilst being driven, parked or carried by sea or air

What is true about the policy wording for commercial vehicle insurance?

There is usually a standard policy wording, which is then modified depending on the type of vehicle insured

While the benefits between commercial and private motor insurance are largely the same, what benefits are excluded for commercial vehicle insurance?

• Driving other cars

• Personal accident cover

• Personal effects cover

What is true about the third party liability for commercial vehicle insurance?

• There is unlimited indemnity for death or bodily injury to third parties

• There is a limit to third party property damage

What can either be included or available as extensions for commercial vehicle insurance cover?

• Loading or unloading

• Indemnity to driver

• Indemnity to user

• Indemnity to passengers

• Legal costs

• Medical expenses

• Windscreen cover

• Loss of use

What extension to commercial vehicle insurance mean cover for third party liability can also be applied to accidents whilst loading and unloading?

Loading or unloading

What extension to commercial vehicle insurance means usually anyone may drive on the insured's order or with their permission?

Indemnity to driver

What extension to commercial vehicle insurance means the insured may allow others to use the vehicle for social, domestic or pleasure purposes?

Indemnity to user

What extension to commercial vehicle insurance means indemnity for passengers acts of negligence is covered?

Indemnity to passengers

What extension to commercial vehicle insurance means the policy can usually be extended to cover legal costs?

Legal costs

What can be used to cover a number of vehicles under one policy?

Fleet insurance

What is an example of fleet insurance being used?

When a business insures all of their company cars under one policy

While the covers for fleet insurance are similar to that of private motor policies, what other covers are often included?

• Contingent third party insurance

• Joint insured clause or cross liabilities clause

• Occasional business use (as per the contingent extension but for comprehensive cover)

• Roadside assistance

• Helplines

What additional cover provided in fleet insurance means that third party only cover would be available when an employee is using their own vehicle on the property of the insured's business and their own insurance is not operative?

Contingent third party insurance

What additional cover provided in fleet insurance means that two or more named insureds are treated as separate policyholders if one has a claim against the other?

Joint insured clause or cross liabilities clause

What is bought by homeowners to provide protection for both the building itself and its contents?

Household insurance

While household and contents insurance is usually one all inclusive policy, what happens in some regions?

They can be purchased as separate policies

When would a person only buy contents cover for their home?

When living in a rented property as a tenant

What is a 'standard' household policy?

There is no such thing

What does the definition of 'building' include in buildings insurance?

• The main structure

• Garages

• Sheds

• Greenhouses

• Outbuildings

• Swimming pools

• Tennis courts

What are the general covers available to buildings insurance?

• Fire, lightning, explosion and earthquake

• Riot, civil commotion, strikes, labor or political disturbances, malicious damage or vandalism

• Storm or flood

• Falling trees or branches

• Escape of water

• Escape of oil

• Theft or attempted theft

• Impact

• Subsidence, ground heave or landslip

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

• Accidental damage to drains, pipes, cables or underground pipes

• Accidental breakage of glass and sanitary fixtures

• Legal fees, architects' and surveyors' fees, cost of debris removal

• Loss of rent

• Accidental damage

What cover of building insurance usually excludes loss or damage if the building is unoccupied for more than 30 or 60 days and where malicious damage is usually subject to an excess?

Riot, civil commotion, strikes, labour or political disturbances, malicious damage or vandalism

What cover of building insurance is usually subject to an excess?

Storm or flood

What cover of building insurance excludes damage to walls, gates, fences or hedges?

Falling trees or branches

What covers of building insurance comes with an unoccupied exclusion of either 30 or 60 days and has an excess?

• Escape of water

• Escape of oil

• Theft or attempted theft

What cover of building insurance covers collision into, or impact of, road vehicles, animals, aircraft (or other aerial devices) and things dropped from them?

Impact

What cover of building insurance usually comes with a large excess?

Subsidence, ground heave or landslip

What is the movement of the land on which the building stands due to movements in underground workings like mines?

Subsistence

What results when previously dry ground suddenly takes in water and swells?

Ground heave

What is a small landslide?

Landslip

What cover of building insurance is incurred whilst reinstating the building after suffering loss or damage?

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

What can usually be added as an optional extension to buildings insurance?

Accidental damage

What can the term 'contents' mean for household insurance?

Household goods or personal effects of every description that belong to the insured or to a member of the family living in the property

What can the definition of contents include?

• Cash

• Stamps (not part of a collection)

• Any fixtures and fittings belongings to the insured

What makes the coverage for contents cover different than buildings insurance?

• Theft (or attempted theft) of cash, currency, bank notes and stamps may be excluded if it does not involve forcible and violent entry or exit

• Theft (or attempted theft) while the building is lent, let or sub-let in whole or in part may be excluded if it does not involve forcible and violent entry or exit

• Accidental damage cover: certain contents are excluded, e.g. clothing, money and stamps, plants etc.

What is the normal single article value for contents insurance?

5% or 10%

What is the normal variable limit for contents insurance?

One-third of the total sum insured

What happens if valuable contents are greater than one-third of the total sum insured of the home?

They can be disclosed and insured seperately

What extensions in contents insurance are usually included automatically?

• Temporary removal to another premises (with restrictions)

• Clothing and personal goods of domestic servants (with restrictions)

• Accidental breakage of mirrors and glass or furniture

• Loss of rent

What extensions in contents insurance can usually be included for an additional premium?

• Accidental damage to entertainment equipment

• Accidental damage during removal

• The cost of replacing keys and door locks after the loss or theft of keys

What are the typical exclusions to contents insurance?

• Property more specifically insured elsewhere

• Medals and coins, unless specifically insured

• Motor vehicles

• Livestock (other than horses)

What do all household policies cover for liability?

Legal liability to third parties for accidental injury or accidental damage to material property

What is the specific liability cover provided in buildings insurance?

Liability of the owner and also their liability for faults in property that the insured used to own or occupy

What is the specific liability cover provided in contents insurance?

Liability of the occupier for property in other premises that they use for temporary holiday accommodation

What are the most common extensions to household insurance policies?

• 'All risks'

• Money (e.g. cash, cheques, postage stamps and travel tickets) and credit cards each with a limit of indemnity, specific conditions (e.g. reporting the loss to the police and card issuer within a certain time) and exclusions

• Bicycles, with usually a limit per bicycle and with a lock or storage clause

• Freezer contents, covering their damage as a result of a change in temperature or contamination by refrigerant fumes

• Sports equipment

• Personal accident and hospital cash benefit

• Creditor insurance, i.e. the inability to keep up credit instalment payments

• Domestic animals

• Legal expenses

What extensions to household insurance is usually only given in conjunction with contents cover and is for personal belongings taken outside the property and will usually be specified and unspecified items?

'All risks'

What can legal expenses cover under a household policy typically provide cover for?

• Recovery costs

• Civil defense costs

• Prosecution defense costs

• Employment dispute costs

What legal expenses cover under a household policy is for legal action taken to enforce the legal rights of the insured against third parties?

Recovery costs

What legal expenses cover under a household policy is for the defense of certain types of civil claims not covered by other forms of insurance?

Civil defense costs

What legal expenses cover under a household policy is for the defense of certain criminal charges which may arise from unwitting acts of the insured

Prosecution defence costs

What legal expenses cover under a household policy is for the pursuit of a claim on behalf of the insured against their employer through the court system, like for unfair dismissal?

Employment dispute costs

What is a new insurance model whereby it is possible for insurers to insure specific gadget items against loss, damage or theft, rather than having them covered by a traditional household policy?

Gadget insurance

What is true about gadget insurance?

• Some policies provide travel insurance cover as an add-on

• Bicycles can also be covered under this insurance

Why can cover for gadget insurance be arranged on a month by month basis?

So different gadgets can be swapped in and out of cover

What are the coverages available for gadget insurance?

• In case of theft or robbery of the smartphone

• Replacing or repairing the lost or damaged phone within 48 hours of reporting the incident

• Protection against accidental damage

• Coverage against liquid damage of the mobile

• Doorstep pick-up and drop facility of the mobile phone for repairs

• Cashless process for the coverage

• Technical malfunctions like problems with ear jacks, charging ports and touch-screens are also covered by some companies

• Some insurance companies also offer no claim bonus to the policyholder at the time of policy renewal if no claims are reported during the previous policy term

What is designed to cover the risks of traveling?

Travel insurance

What are the risks associated with traveling?

• A trip may be cancelled because of sickness or delayed by an industrial dispute

• Luggage may be lost, damaged or delayed

• Connections may be missed because of late running public transport

• The traveller may become ill or suffer an accident while away

What do most travel insurance policies cover?

• Personal accident benefits

• Medical and associated expenses

• Loss of deposits

• Loss of, or damage to, baggage, personal effects and money

• Personal liability for accidental injury to third parties or damage to their property

• Delayed baggage

• Hospital cash benefits

• Travel interruption

• Travel delay