Valid Claims And Claims Settlement

Question 1

When two insurance policies cover the same risk and they both contain a contribution condition, how would a claim usually be settled?

Answer 1

Both policies would contribute a proportionate amount.

Question 2

Under the standard fire insurance policy, the pro rata condition of average requires the sum insured, at the date of loss, to be what minimum percentage of the value at risk to obtain full settlement?

Answer 2

100%

Question 3

A consumer used the services of an intermediary to effect a household insurance policy. In the event of a claim, who is legally responsible for proving the amount of the loss?

Answer 3

The consumer in all cases

Question 4

What settlement method would normally be used for a valid claim under a business interruption

Answer 4

Payment of money

Question 5

When a motor insurer takes advantage of contribution rights, from whom can some of its claims settlement costs be recovered?

Answer 5

Another insurer

Question 6

A specialist motor insurer has recently experienced a high level of fraudulent claims. Which of its policyholders could suffer as a result of this fraud?

Answer 6

All PH

Question 7

Application of the arbitration clause might occur under a fire insurance policy as a result of a dispute between the insurer and the insured regarding the

Answer 7

Amount of this claim

Question 8

An insured is subject to implied duties when

Answer 8

Submitting a claim.under insurance policy

Question 9

Upon becoming aware that a fraudulent claim has been made, what is the earliest point from which an insurer may terminate the insurance policy?

Answer 9

Inception of policy

Question 10

When is an amount initially reserved in the claims process?

Answer 10

Claim is notified

Question 11

Why would an insurer register claim details on MIAFTR2?

Answer 11

To help prevent fraud

Question 12

Which insurance policy condition can an insurer invoke to recover all of its outlay in respect of a claim?

Answer 12

Subrogation

Question 13

The purpose of the Claims and Underwriting Exchange is to

Answer 13

Hello detect fraud claims

Question 14

Under an employers’ liability insurance policy, delays often occur between a claim being notified and final settlement. To ensure adequate funds are available to ultimately pay the claim, an insurer will rely on

Answer 14

Reserving

Question 15

An insurer can terminate an insurance policy without refunding premiums if the policyholder

Answer 15

Fraud claims

Question 16

The insured has many duties after uninsured loss occurs in connection with property insurance what are some examples

Answer 16

At the insured expense provide all information and assistance to the insurer. Notify the insurer as soon as possible. Take reasonable steps to minimise the loss. Where appropriate notify the police as soon as possible

Question 17

What is the formula for contribution

Answer 17

Sun insured divide total sum insured = insuers liability

Question 18

What is the formula for average

Answer 18

Sum insured Devide value at risk = claim payment

Question 19

When might the average condition apply

Answer 19

In the event of under insurance like property

Question 20

Who is eligible to claim compensation from the motor insurance bureau

Answer 20

Pedestrians injured by vehicles which failed to stop and I never traced. Hit and run cases

Question 21

What rights does the insurance act 2015 give an insurer when it receives a claim that turns out to be fraudulent ?

Answer 21

Reject the claim. Recover any payments from the insured it has already made in respect of that claim. Refuse all claims made after the fraud claim. Give notice to the insured that the insurance contract is terminated from the time of the fraud claim. Retained the premium at its discretion if the contract is terminated

Question 22

What is meant by onus of proof

Answer 22

It is the expression used to describe the duty imposed on an individual to produce evidence to prove what has been stated or affirmed is true

Question 23

What does the insured have to prove when making a claim

Answer 23

That an insured peril arose. The financial amount of the loss

Question 24

What facts must an insurer check when establishing whether a claim is valid

Answer 24

The cover was in force at the time of the loss. The insured is named in a policy. The peril is covered. Reasonable steps to minimise the loss. Conditions and warranties have been complied with. The principle of utmost good faith was originally complied with. No exceptions are appropriate. The value of the loss is reasonable

Question 25

The main imply duties imposed on the insured on the occurrence of the insuered which might give rise to a claim

Answer 25

Act as though uninsured and try to minimise the loss. Advise the appropriate authorities when necessary. Prevent the loss from spreading. Not hinder the insurer in the event of the claims investigation

Question 26

What is the purpose of the claims form

Answer 26

Establish whether the insured is entitled to indemnity under the policy.

Provide sufficient information to permit the insurer to process the claim. Enable the insurer to assess the potential claim amount. Enable the insurer to consider whether a third-party claim is likely. Enable the insurer to consider whether any rights of subjugation or contribution are likely. In motor insurance it is called a accident report form

Question 27

What is the definition of contribution and how is it calculated

Answer 27

Contribution is the right of an insurer to recover part of a claim payment where two or more policies cover the same interest the same risk and are in force when the loss occurs.
Sum insured Devide by all policies X Loss = the insurers liability 
Contribution gives an issue about the right to approach of their insurers simile liable for their share of the claim

Question 28

What is the formula used when calculating average

Answer 28

Sum insured Devide Value at risk X loss = claim payment

Question 29

Under which two agreements does the motor insurance bureau operate

Answer 29

Uninsured drivers agreement. The untraced drivers agreement

Question 30

What are the five possible ways a claim may be settled

Answer 30

Payment of money. Paying for repairs. Replacement. Reinstatement. Payment to a third-party

Question 31

Why are claim reserves important

Answer 31

Financial statements must be submitted to the appropriate regulator. They impact on premium rates

Question 32

What are the three main facilities available for fraud detection in the insurance industry

Answer 32

Claims and underwriting exchange. Art loss register. Motor insurance Aunty Fraud and theft register MIATFR2

Question 33

Valid, invalid and partially met claims

Answer 33

The insured responsibility to prove that they have a valid claim by proving that an insured peril arose and the amount of the loss

Question 34

Valid, invalid and partially met claims

Answer 34

The insurer has its own responsibilities to ensure that cover applies, the one making the claim is entitled to indemnity, to establish that all conditions have been complied with

Question 35

Valid, invalid and partially met claims

Answer 35

A valid claim may only be partially Met if the sum insured limit of liability is less than the claim, an average clause operates or if an excess applies

Question 36

Implied duties insured

Answer 36

Acting as if uninsured, notifying appropriate authorities, taking steps to prevent a loss from spreading, not hindering the insurer in investigating claim.

Question 37

On being advised by the insured of an incident, the insurer usually issues a claim form for completion this includes…

Answer 37

A number of questions, the nature of which will depend on the class of insurance and is a fairly lengthy document. In addition certain supporting evidence is required like a doctor certificate for a sickness claim

Question 38

The claims form

Answer 38

 The insurer must check the completed claim form against to cover provided by the policy and is satisfied they must and check that the value claimed is reasonable

Question 39

Contribution

Answer 39

Contribution is the right of an insurer to call on other insurers similar but not necessarily equally liable to the same insured to share the loss of an indemnity payment.

The principal is always modified by contribution condition which in effect requires a short clip proportionately from each insurer

Question 40

The application of average

Answer 40

In cases of under insurance the insurer will only pay a proportion of the loss based on the relationship between the sum insured and the full value of the risk insured. Sum insured Devide full amount at risk X Loss

Question 41

The subrogation condition

Answer 41

Modify the common law right of the insured to recover against a liable third-party allowing the insurer to assume those rights.
Subrogation gives the insurer the right to pursue recovery from a third-party or more often their insurers

Question 42

The arbitration clause

Answer 42

Provided that liability is admitted under the policy this clause allows any dispute over the amount to be referred to arbitration

Question 43

Alternative dispute resolution

Answer 43

Under the civil procedure rules, courts have a duty to encourage the parties to a dispute to use alternative dispute resolution ADR

Question 44

What is a mediator

Answer 44

Facilitate discussion between the parties with the aims of aiding understanding and reaching an agreement

Question 45

What is a consolidator

Answer 45

They make recommendations as they lead the parties to a settlement

Question 46

ABI memorandum of understanding

Answer 46

Subrogated motor claims certain insurers have agreed not to ask for contribution from other liable insurers in certain circumstances like personal effects damaged in a motor accident

Question 47

Motor insurance bureau uninsured drivers agreement

Answer 47

Is designed to settle court judgement awarding damage for third-party personal injury unlimited and all third-party property damage up to £1 million where there is no insurance policy in force

Question 48

Motor insurance bureau untraced drivers agreement

Answer 48

To provide compensation to an accident victim in respect of death or injury where the driver is on traced, provided it can be established that the untraced motorist would be liable to pay damages

Question 49

What is a common way to settle a claim to the insured or third party in liability claims

Answer 49

Payment of money

Question 50

In motor insurance what is the common way to settle a claim

Answer 50

Cost of repairs

Question 51

Damaged or lost goods what is the claim settlement

Answer 51

Replacement option

Question 52

In the case of extensive damage or complete destruction, insurers can arrange to reinstate by taking control of the repair building themselves

Answer 52

In liability cases the payment is not paid to the insured but to the third-party

Question 53

Third parties right against insurance act

Answer 53

Gives a third-party rights against an insolvent insured insurer where they have a claim against that insured

Question 54

When the insurer pays for the total loss of an item under a property or motor policy they acquire recovery rights arising out of the subject matter of insurance they become entitled to receive the benefit of salvage

Question 55

Reserving process

Answer 55

On receipt of a claim the insurer will endeavour to place a realistic estimate on it to ensure that sufficient funds are reserved to meet the expected claims costs. This is important for accounting purposes and premium setting

Question 56

Methods of claims recovery

Answer 56

Subrogation and contribution. Where an insurer has settled a claim and then the lost or stolen item is recovered the insurer has the right to the property although they were often give the insured first refusal on it in return for the payment of the claim settlement

Question 57

Who deals with fraud prevention

Answer 57

Fraud bureau, the insurance fraud investigations group, the insurance fraud register

IFB IFIG IFR

Question 58

What is the claims and underwriting exchange

Answer 58

It is a database containing information on personal lines claims enabling subscribing insurers to check the true claims history of individuals

Question 59

What is the Art loss register

Answer 59

Is a collaboration between insurers and the art world designed to increase their recovery rate of stolen art and antiques and to make the resale more difficult

Question 60

The motor insurance Anti Fraud and theft register contains details of…
MIAFTR2

Answer 60

All total loss and theft claims helping insurers spots Duplicut claims on the same loss

Question 61

The motor insurance database contains details of…

MID

Answer 61

All registered vehicles in the UK and their insurance details

Question 62

The claims handler has a role to play in identifying Fraud bye…

Answer 62

Bringing their experience to bear in considering unusual aspects of a claim or in spotting inconsistencies. Increasing use of technology and artificial intelligence in particular in assessing and processing claims

Question 63

Paying fraudulent claims impacts

Answer 63

The insurer raising premiums for all policyholders and temps the fraudulent claims to make a claim again in the future