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Flashcards in Chapter 1 General principles Deck (31)
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1

What must an insured prove to make a valid claim?

- that an insured peril arose - i.e. that they have suffered a loss directly caused by a peril which is covered under the policy. Proof can be in the form of a completed claim form, or frequently is via telephone notification

- the amount of their financial loss - supporting evidence in the form of a receipt, a repair bill or a valuation must be produced.

2

What are an insurers' responsibilities in the claims process?

verifying that:

- cover was in force at the time of the loss
- the insured is that named in the policy
- the peril is covered by the policy
- the insured has taken reasonable steps to minimise the loss
- all 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.

A claim may prove to be invalid if these conditions are not met (or the insurer can prove fraud).

3

What would happen if a condition precedent to liability (or recovery) is not observed?

Insurers may avoid liability for a particular loss, but they need not repudiate the contract as a whole.

If, at a later date a valid claim is made, the insurers must pay, provided that the insured complies with the condition in that instance.

HOWEVER, the insurer should not refuse to pay a claim from a consumer on the grounds that a condition was not met, where that condition was not connected with the circumstances of the loss.

4

In what situations will full indemnity not be provided to the insured?

- the sum insured (or limit of indemnity in the case of liability insurance) is less than the value of the claim - the insurer's liability is restricted to the sum insured

- the average clause operates - where the policyholder has under-insured their property

- an excess applies - the insured is responsible for the first amount of a claim.

5

What is the main form of documentary evidence used to support a claim?

The Claim form

6

What are the 5 main functions of a claims form?

- establish if the insured is entitled to indemnity under the policy - by checking that the loss or damage is covered and that there has been no non-disclosure or misrepresentation

- obtain sufficient information to begin processing the claim

- assess the severity and potential cost of the claim

- take a preliminary view on whether any third party claims are likely to be reported

- decide whether or not there is any possibility of recovery rights against a third party.

7

What type of insurance must a claim form always be completed following a risk event, regardless of whether the insured intends to claim or not?

Motor insurance.

The claim form is known as an 'accident report form'.

This is because it is a policy condition in motor insurance that all accidents are reported to the insurer, regardless of whether a claim will be made.

8

What information is required within a motor insurance accident report form?

- details of the insured

- the date and time of the accident, the presence of street lighting and car lights

- the vehicle involved in the accident, and its use

- particulars of the driver at the time of the accident, if not the insured

- details of the accident, including a sketch plan of the scene

- particulars of other parties involved and property damaged or injuries sustained

- particulars of any independent witnesses.

9

What information is required within a property insurance claim form?

- description of the property damaged, e.g. stocks, fixtures and fittings, carpets

- date, cause, circumstances and the monetary amount of the loss or damage

- situation and occupancy of the premises

- capacity in which the insured is claiming (e.g. as owner, custodian etc.)

- whether any other person has an interest in the lost or damaged property

- whether or not there is any other insurance in force.

10

What evidence in addition to a claims form is needed for theft claims?

The details on the claim form can often be compared with what's listed in the police report.

11

What evidence in addition to a claims form is needed for personal injury and sickness claims?

Medical evidence and/or doctor's certificates, death certificates and coroner's inquest judgments will be examined, as applicable.

12

What evidence in addition to a claims form is needed for motor damage claims?

Vehicle registration documents in respect of total loss motor claims or vehicle theft would be appropriate.

13

Who else might be involved in the investigation process of a claim?

Different types of experts.

The experts used in the investigation process might be, for example:

- solicitors: to give legal opinions, or to commence or defend legal proceedings

- surveyors: to estimate rebuilding costs

- doctors: to verify or assess the severity of injuries.

14

What is proximate cause?

The dominant cause

must be a direct link to resulting loss

15

Why do claims handlers compare the claims form to the proposal form

Check for breach of good faith

16

What evidence in addition to a claims form is needed for motor liability claims?

Images/dash camera footage of the incident and satellite images of location as well as engineers reports

17

Who has the onus of proof to prove a claim is covered under the policy?

The insured

18

What is meant by the term "quantum"?

The amount of the claim

19

The fact that the insured can not act recklessly because they are an insured is an example of what type of condition express or implied?

Implied

20

A condition which requires a motor cycle is stored in a locked garage is an example of what type of condition - express or implied?

Express

21

If an insured breaches a condition precedent to liability what can insurers do?

Avoid liability for the claim but can not repudiate the contract as a whole

22

What Act states that term of a contract is not transparent
it can be assessed for unfairness?

Consumer Rights Act 2015

23

Under Insurance Conduct of Business Sourcebook can an insurer refuse to pay a claim for breach of policy condition that is not connected with the circumstances of the loss?

No. Unless fraud is involved.

24

If a term is deemed unfair under the Consumer Rights Act 2015 what happens?

It is set aside.

25

What are the implied duties of an insured in the event of a claim?

Act as if uninsured
Advise appropriate authorities
Take steps to prevent loss
Not hinder insurer in claim investigation

26

What are the express duties of an insured in the event of a claim

Notify insurer promptly
Involve emergency services if appropriate
Reasonable steps to prevent further damage
Proof and details of loss in writing

27

If the proximate cause of a loss is an insured peril but a subsequent cause is uninsured will the loss be covered?

Yes

28

If the proximate cause of a loss is an insured peril but a subsequent cause is excluded will the loss be covered?

No

29

How quickly should insured's notify claims?

Promptly

30

What are the benefits to an insurer of telephone First Notification of Loss?

Control over cost
Fewer exaggerated claims