Chapter 3 Flashcards
(54 cards)
What does a policy schedule usually contain?
All variable information concerning the insured, details of risks insured and which sections of policy are operative.
Do policy documents have to be worded clearly?
Yes - clear enough for consumers to understand them.
What is contra proferentem?
It applies by courts when policy wording is ambiguous
Can an insured dispute core terms of a contract?
No but they can complain if they are unclear or badly written
In an insurance policy what is a heading?
Includes the name of the insurer
What is a preamble and what is it also known as?
It sets the scene and refers to insured/insurer forming a contract and offering indemnity in return for a premium.
A recital clause
What will often be below the preamble?
A signature or stamp.
It comes from the time when policies were prepared by hand.
What is the operative clause and why is the arguably the most important part of the contract?
It’s also called the insuring clause and this is where the actual cover is outlined «Eg. Axa agrees to indemnify the insured against claims made during the policy period «
Are exceptions and exclusions the same thing?
Yes
What is the difference between express and implied conditions?
Express conditions are always stated
Implied conditions are implied by common law and are not stated
What is the purpose of the policy schedule?
To make the policy specific to the insured
List some variable parts of the policy schedule.
- Insured’s name
- Insured’s address
- Policy period
- Premium
- Details of the subject matter
- Location of the risk
- Sum insured or limit of liability
- Policy number
- Reference to special exclusions, conditions or aspects of cover
- Operative sections of the policy
What types of information might be included in the ‘Information and facilities’ section of a policy?
- Definitions
- Customer service standards statement
- Complaints procedure
- Claims information
True or False: Definitions in an insurance policy only apply if the word begins with a lowercase letter.
False
The definition will apply only if the word begins with a capital letter or is formatted in bold or italics.
What does a customer service standards statement provide?
Expected response times from the insurer
This statement informs policyholders about the level of service they can expect.
What should a policyholder do if their complaint is not resolved satisfactorily?
Refer to the Association of British Insurers and/or the Financial Ombudsman Services
Fill in the blank: The Ombudsman asks firms to try and resolve complaints within ______ weeks of the first complaint.
eight
What is typically found in the claims information section of a motor insurance policy?
‘What to do?’ in the event of a motor accident
What is a Freephone claims service?
A service provided for reporting claims without charge
What are the 8 main things a policy will include
- heading;
2 • preamble;
3 • signature clause;
4 . operative clause;
§ . exclusions/exceptions;
6 . conditions;
7 . policy schedule; and
8 • information and facilities
What is the difference between general and specific exclusions?
General exclusions apply to all sections of the policy
Specific exclusions only apply to parts of the policy
Why is war a fundamental risk?
It’s too serious to be insured by an insurance company. The damage would be to widespread.
Is radioactive contamination a fundamental risk?
Yes - usually! Potentially losses are considered beyond the capacity of normal insurers. Specialist pools of insurers may cover nuclear installations however.
Why is terrorism now generally excluded?
Following major terrorist attacks in London and 9/11 it was clear that significant terrorist attacks could happen from unexpected/insured perils like aircraft’s.
