Chapter 4 Flashcards
(90 cards)
1
Q
What is an ARF?
A
Accident Report Form
2
Q
Why are benefits policies different to settle than indemnity policies?
A
In benefit policies, the amount to be paid out has already been agreed when the contract was incepted.
3
Q
How are contents defined?
A
Items for which you or your family are responsible for including personal belongings.
4
Q
How are contents claims paid/settled?
A
A new for old basis.
5
Q
What does ‘new for old’ basis mean?
A
A “new for old” basis means that if something you own gets damaged, lost, or destroyed, the insurance company will replace it with a brand-new item of the same kind, rather than giving you the value of the old, used item.
6
Q
How are buildings claims usually settled?
A
Repairing the building.
7
Q
Does the indemnity for buildings settlement take into account betterment?
A
Yes - usually the cost of repair is less betterment
8
Q
What is betterment and give an example?
A
When aspects of the property are repaired by insurers to a better condition than they were before the loss e.g., new wiring or double glazing replacing a single glazed window
9
Q
What will insurers request for proof in travel claims for personal effects and money?
A
Proof of purchase and confirmation the theft has been reported to the police.
10
Q
How are extended warranty claims settled?
A
Replacement or repair
11
Q
Why are extended warranty claims less subject to fraud than other types of insurance?
A
There is no cash incentive to be gained
12
Q
How is pet insurance settled?
A
The insurer will usually pay vet fees
13
Q
In special perils what 4 things does the insured have a duty to do when a loss occurs?
A
- Notify the insurer immediately
- Mitigiate their losses
- Deliver to the insurer full information about the property lost or damage
- Provide proof of the loss
14
Q
In large property claims who is usually appointed?
A
Loss Adjusters
15
Q
Who can the insured instruct on their behalf in the event of a claim?
A
A loss assessor
16
Q
In large all risk claims who is usually appointed?
A
Loss Adjusters
17
Q
What will insurers usually request a copy of / ask the insured do in theft claims?
A
Notify the police and a copy of the police report
18
Q
Apart from the insurer, who else should the insured notify in a theft claim?
A
The police
19
Q
Who will usually be appointed in theft claims if fraud is suspected?
A
A specialist claims investigator.
20
Q
Is exaggeration common in glass claims?
A
No
21
Q
Are glass claims subject to an excess?
A
Yes, usually to prevent small claims
22
Q
Do insurers have approved repairers for glass claims?
A
Yes, usually.
23
Q
Why does money insurance have great scope for abuse?
A
There is great financial incentive
24
Q
In money insurance what will insures ask for from the insured and proof of loss and who might they appoint?
A
Specialist claim investigators
- Proof that the money was on the premises
- Details of the occurrence
- Confirmation the matter has been reported to the police
25
Why are Legal Expenses Claims different from other kinds of claims?
Liability is usually assessed from the start / before the claim commences
26
What other type of claim will usually run in conjunction with business interruption claims?
Property Claims
27
What does it mean that insurers 'participate' in Business Interruption claims?
In Business Interruption (BI) claims, insurers "participate" more actively than in other insurance types because BI losses are complex, ongoing, and require continuous assessment of financial impacts over time, not just a one-time damage check.
28
How are business interruption claims unique?
At the proposal stage, the insured will already know/have set out how they will react in the event of a claim including if they have any alternative premises / if they have disaster plans.
29
What are 2 things insurers require before settling any creditor insurance claims?
1. Proof the insured is not working
2. Evidence of the payments needed to be made
30
In cyber insurance, what does first party cover mean?
Cover for costs directly incurred by the policyholder e.g., BI losses, fees of forensic investigation
31
Who is the 3rd party in cyber insurance claims?
Any other third parties affected by the cyber incident e.g., customers or partners
32
What does a claims made basis mean in insurance?
A claims-made basis means your insurance only covers claims that are made while the policy is active. If the claim comes after the policy ends (without run-off cover), you’re not covered—even if the incident happened during the policy period. And any retrospective claim is dealt with by your current insurer.
33
What is a loss occurring basis for claims?
A loss occurring basis means the policy covers any incident (or "loss") that happens during the policy period, no matter when the claim is reported—even years later. As long as the event occurred while the policy was active, you're covered, even if the claim comes after the policy ends.
34
Alan was insured for Employers Liability by ABC insurance in 2015. He changed insurers in 2016 to XYZ insurers and has been with them ever since. A claim comes in from 2015. Which insurer would deal with this claim/who would he need to report it to?
ABC insurance
35
Alice was insured for Professional Indemnity by Panda insurance in 2014. She is now with Zebra insurance. A claim comes in from 2014. Which insurer would deal with this claim/who would she need to report it to?
Zebra Insurance
36
What is the maximum claim amount allowed under the MOJ/portal?
£25,000
37
Under the portal, what is maximum amount recoverable for claims up to £10,000?
£900 + Vat
38
Under the portal, what is maximum amount recoverable for claims from £10,000 - £25,000?
£1,600 + Vat
39
Under Third Party Property Damage claims what do insurers require to reach a decision on liability?
1. A written report of the negligence
2. Evidence to support the claim
3. Inspection of the damaged property.
40
What are the 2 types of damages?
Special Damages and General Damages
41
What are special damages?
Losses that can be quantified
42
What are general damages?
Losses that can't be quantified - such as pain/emotional trauma
43
Why are commercial insurers less likely to use authorised repairs?
The vehicles are more likely to be specialist and an appropriate specialist might not be available.
44
What are legal helplines?
An advisory or assistance service that is free to use 24 hours a day via the phone.
45
What is the benefit of a legal helpline for the insured?
Immediate access to advice.
46
Why are legal helplines often called the FNOL stage?
The advisors will have an understanding if the claim can be settled by the insurer and an understanding of the cover provided.
47
What is an authorised repairer?
An authorised repairer is a repair shop or service provider approved by your insurer to carry out repairs to your vehicle or property.
48
What are the 3 main benefits of using an authorised repairer?
1. Convivence
2. Cost
3. Competence.
49
What are uninsured losses?
Losses the insured may suffer as the result of a claim that aren't directly covered by the policy. e.g., the cost of a hire vehicle.
50
What is ULR?
Uninsured Loss Recovery (ULR) is a service that helps you recover costs not covered by your insurance, like your policy excess, lost earnings, or other out-of-pocket expenses after an accident. It’s often used when the other party was at fault and a legal team will help recover the outlay.
51
What does BTE mean in Legal Expenses Cover?
Before the event - cover provided will be appropriate for any legal costs
52
What is a CFA?
Conditional Fee Agreement
53
What is a conditional fee agreement?
No win no fee basis - if a claim is successful the company helping with the claim will be entitled to a part of the recovery.
54
What % is the CFA agreement usually capped at?
25%
55
What does 'ATE' mean in Legal Expense sand explain the cover it provides?
After the event
After-the-Event (ATE) legal expenses insurance is taken out after a legal dispute has already arisen, usually to cover legal costs and the opponent’s fees if the case is lost. Often taken alongside "No Win, No Fee" (CFA) arrangements
56
Can you recover an ATE premium from a third party?
No - LASPO prohibited the recovery of an ATE premium
57
What is a DBA?
A damages based agreement -A DBA (Damages-Based Agreement) is a type of "no win, no fee" arrangement where a lawyer’s fee is calculated as a percentage of the damages recovered if the case succeeds.
58
What 2 types of risk controls are there?
1. Physical
2. Financial
59
What are the 3 ways you can financially control a risk?
1. Risk Retention
2. Risk Transfer
3. A combo of both
60
What is risk retention
Where the insured decided to meet the costs of paying for the loss itself (self insuring)
61
What is risk transfer
The responsibility of paying for a risk is passed onto someone else e.g., insurer.
62
What are the 2 ways of physically controlling risks?
1. Risk Avoidance
2. Risk Reduction
63
What is risk reduction and name an example
Implementing measures to physically reduce the frequency or severity of a loss occurring e.g., installing sprinklers.
64
What is risk avoidance and why is not practical?
Risk avoidance means completely eliminating a risk by choosing not to engage in the activity that creates it. In businesses this is not always possible.
65
What will insurers consider doing if the insured implements risk reduction measures?
Reduce the premium
66
What is rehabilitation for a claimant?
Rehabilitation is sometimes offered to victims of injury claims in the hopes that early intervention may help the claimants long term prognosis.
67
Why would insurers offer rehabilitation?
1. They may have to - the Persona injury Pre-Action Protocol requires insurers to consider it
2. It can help control future costs
68
What are the 3 types of rehabilitation?
1. Medical
2. Vocational (helping them seek alternative employment)
3. Qualitative
69
What is the civil procedures rules purpose?
To reduce costs, delays and complexity in personal injury claims.
70
What is the maximum claim value under the intermediate track?
£100,000
71
What are the 4 tracks in court for personal injury cases?
1. Small Claims
2. Fast Track
3. Intermediate Track
4. Multi Track
72
What are the PAPS?
PAPs (Pre-Action Protocols) are procedures parties must follow before issuing court proceedings, designed to encourage early information exchange, cooperation, and settlement, thereby reducing unnecessary litigation
73
What 8 types of dispute do PAPS apply to?
1. Personal Injury
2. Clinical Negligence
3. Construction
4. Defamation
5. Professional Negligence
6. Judicial Review
7. Disease / Illness
8. Housing disrepair
74
In PAPS, in how many days must a third party solicitors be responded to?
21 days of receipt
75
In PAPS, what is the time period set for investigating the claim and making a decision?
3 months
76
What kind of injury does the CLA (civil liability act) define?
Whiplash
77
What did the Legal Services Act allow?
Non-lawyers to own legal practices - this allowed insurers to own legal practices too.
78
What does the OIC portal enable?
To bring claims forward with or without representation for whiplash up to value of £5,000. It features a fixed tariff for compensation, mandatory medical evidence, and higher small claims limits.
The aim was to cut whiplash claim volumes, combat fraud, and pass around £35/year in savings to motorists through lower insurance premiums.
79
Which road uses have to use the Low Action Protocol for whiplash claims?
Vulnerable road users like horse riders or pedestrians
Children and protected parties
Claims where the defendant is not a UK resident
80
If a claim goes above £5,000 on the OIC portal can it stay on there and should the insured accept any offers made?
No - it would go onto a MOJ portal instead.
And they should not accept any offers made if they have a right to the small claims portal.
81
Under the OIC portal, can the claimant negotiate the value of the settlement?
No - it is fixed tariff based on the length of the injury as assessed by a medical examiner.
82
Under the OIC, how many days do compensators have to assess liability?
30 days
83
Under the OIC, how many negotiations do the claimant and the compensator have to agree quantum?
3
84
What is an advantage of using the small track claims path?
It's a quick and speedy way of dealing with small claims
85
What is the N1 form used for?
Claim track claims
86
What are the small track quantum limits for Property Damage, Road Traffic Accidents and Liability Claims?
£10,000
£5,000
£1,500
87
What are the portal quantum limits for Personal Injury, Road Traffic Accidents and Liability Claims?
£25,000
88
By how much has the claims portal reduced claim times?
From 18 to 9 months
89
What are the 3 stages of the claims MOJ portal?
1. Negotiation period of 35 days to decide liability
2. Agreement on quantum
3. Court hearing at an oral or paper hearing (no parties in attendance on the latter)
90
What is the negotiation time scale under the MOJ for Road Traffic Accidents and Liability Claims (EL/PL)?
RTA - 15 days
PL - 40 Days
EL - 30 Days
