Chapter 4- Property

Question 1

What does a standard fire policy do

Answer 1

Provides compensation to the insured in the event of damage

Question 2

What does DAMAGE mean in respect of standard policy cover

Answer 2

Loss or destruction of or damaged to the insured

Question 3

For a fire peril covering damage what 3 things are excluded

Answer 3

1. Explosion resulting from fire
2. Earthquake or subterranean fire
3. Own spontaneous fermentation

Question 4

How is explosion covered under a fire, lightning and explosion peril

Answer 4

Restricted to explosion or boilers or gas used for domestic purposes only

Question 5

What are 4 special perils in relation to property

Answer 5

1 perils of a chemical type- explosion, spontaneous fermentation or heating

2. Social perils- riot, civil commotion
3. Perils of nature- storm, flood; earthquake
4. Miscellaneous perils- escape if water, aircraft, impact

Question 6

What must special perils do in respect if property

Answer 6

Must result in damage

Question 7

What are the 4 exclusions of explosion cover under a standard fire section of the policy

Answer 7

1 explosion of the insureds own steam and other pressure vessels that are subject to inspection

2. Fire resulting from explosion
3. Domestic explosion
4. Pressure waves to on sonic aircraft

Question 8

Under property damage what is covered for aircraft

Answer 8

Damage caused by the crashing or an aircraft and articles dropped by the aircraft

Question 9

Under property what is cover for damage caused by riot and civil commotion

Answer 9

Strikers

Locked out workers

Malicious persons

Labour disturbances

Question 10

What are the 2 exclusions under riot and civl commotion under property

Answer 10

1. Cessation of work

2. Confiscation, requisition or destruction by order of the government

Question 11

Under property what is the 2 exclusions for malicious damage

Answer 11

Arising from theft

Any building that is empty or not in use

An excess of at least £250 is always applied

Question 12

Under property damage what are the 4 exclusions for storm damage

Answer 12

1, caused by the escape o water of any. Natural water cause

2. Resulting in a change in the water table level
3. Caused by lightning, frost, subsidence, ground heave or landslip
4. To moveable property like fences

Question 13

Under property what is the excess for storm and flood cover

Answer 13

At least £100 and very often £250

Question 14

Under property damage what is escape of water and what are the two exclusions

Answer 14

EOW from tanks, apparatus or pipes

Exclusions
1: by damage by sprinkler

2, to an unoccupied building

Question 15

What is impact peril in relation to property

Answer 15

Restricted to losses resulting from vehicles or animals owners by third parties

Question 16

What are the two exclusions for sprinkler leakage under property damage

Answer 16

1. Freezing whilst the premises are empty

2. Explosion; earthquake, subterranean fire

Question 17

Under property damage what are the 4 exclusions to subsidence, ground heave and landslip

Answer 17

1. Damage to yards, car parks, roads, pavement, gates fences

2, caused by a be new settlement of new structures

3. Origination prior to inception of the policy
4. Resulting from demolition, repair, ground works

Question 18

For fire and special perils policy what are the 9 standard market exclusions

Answer 18

1. Riot or civil commotion
2. War risks
3. Radioactive contamination
4. Northern Ireland
5. Terrorism
6. Pollution
   7: marine polices
7. More specifically insured clauses
8. Consequential loss exclusion

Question 19

What is an all risks insurance cover

Answer 19

The ABI has declared it as a policy that covers accidental loss or destruction of or damage to the property insured

Question 20

Under an all risks policy what are the ABSOLUTE exclusions

Answer 20

War, terrorisim, marine, Northern Ireland, nuclear

Question 21

Under an all risks policy which exclusion can be added with careful underwriting

Answer 21

Corrosion, rust, change in temperature, malicious damage in respect of empty properties

Question 22

Under an all risks policy which exclusions can be written into a policy

Answer 22

Money, jewellery, glass, computers, goods in transit, theft, subsidence

Question 23

Under an all risks policy which exclusions are better placed elsewhere

Answer 23

Motor vehicles, watercraft, aircraft, livestock

Question 24

Under all risks insurance what does it mean by being insured On a first loss basis

Answer 24

Usually for theft, storm, flood, sprinkler leakage and impact on the basis that total destruction by the perils insured is very unlikely

Question 25

What does the Theft Act 1968 state

Answer 25

A person is guilty of theft if they dishonestly appropriate property belonging to another with the intention or permanently depriving the other of it

Question 26

What is the standard policy cover policy wording for Theft

Answer 26

Theft involving entry to or exit from the premises by forcible and violent means

Question 27

What 3 things are excluded under theft

Answer 27

1. If access was gained with a key 2. A trick 3. Hiding on the premises

Question 28

Under theft what happens when a particularly hazardous risk is involved such as a jewellery shop

Answer 28

Theft following forcible and violent entry

Question 29

What are the 4 optional extensions to theft insurance

Answer 29

1. Breakage or glass 2. Replacement of locks 3 temporary removal 4. Index linking

Question 30

What three extensions of cover can be added to a theft policy for an additional premium

Answer 30

Collusion Extended or full theft Robbery and aggravated robbery

Question 31

What are the 4 exclusions to theft insurance

Answer 31

1, collusion 2. Fire and explosion 3. Cash and bank notes 4. Livestock

Question 32

What cover is theft insurance based on

Answer 32

First loss basis

Question 33

For theft of shop stock to be covered under a standard theft policy there would only usually need to be

Answer 33

Forcible and violent entry or exit

Question 34

Under glass insurance what is the standard policy cover

Answer 34

Damage to all fixed glass on an all risks basis Usually dealt with replacement

Question 35

What are the 2 optional extensions to glass insurance

Answer 35

1. Damage to shopfront contents as a result of broken glazing 2. Damage to washbasins and sanitary fittings in hairdressing salons

Question 36

What is the standard policy boxer for money insurance

Answer 36

All risks basis or loss or destruction of or damage to money

Question 37

Under money insurance what are the 8 situations covered

Answer 37

1. In transit 2 on the insureds premises 3. In a bank night safe 4. In a locked safe or strong room 5. On the insureds premises out of business hours and not in a safe 6. In the private residence or an employee 7. In the custody or collectors 8. In the custody or a professional carrier

Question 38

What does it mean by money insurance being on an adjustable basis

Answer 38

It requires a declaration of actual carryings at the end of each period of insurance

Question 39

Under money insurance what are the 2 typical extensions of cover

Answer 39

Personal accident assault Credit cards

Question 40

What are the 4 limitations to money insurance

Answer 40

Loss due to an error or omission in accounting Loss due to the dishonesty of an employee not discovered within 7 days Loss outside GB loss resulting from the safe or strong room being opened by a key

Question 41

What is the limit of money insurance for money in transit

Answer 41

£5,000

Question 42

A haystack in a farmers field suddenly bursts into flames. Before the fire brigade has time to reach the field, the fire has spread to a neighbouring haystack on the farm. The flames are also carried by the wind into the farmers barn. What would be covered by the standard fire policy?

Answer 42

The standard fire policy would cover damage to the neighbouring haystack and the barn, but not damage to the first haystack.

Question 43

If an excess of £250 applies to a policy how much would the insurer pay in the following circumstances? A) a claim for £235 B) a claim for £375

Answer 43

A) the insurer would pay nothing as the claim is below the level of the excess B) the insurer would pay £125 (ie £375 - £250 excess)

Question 44

Why does escape of water specifically exclude damage that occurs while the premises are empty?

Answer 44

The exclusion reflects the greater risk of freezing in an up heated building in the winter and the aggravation of loss that may occur following delayed discovery in unoccupied premises

Question 45

``` For theft of shop stock to be covered under a standard theft policy, there would on usually need to be? A) forcible and violent entry or exit B) forcible and violent entry and exit C) forcible or violent entry or exit D) forcible or violent entry and exit ```

Answer 45

A | Remember the theft act1968 which gave a wider definition of theft than that which insurers were prepared to cover.

Question 46

Think back to what we said about theft insurance in section c in this chapter. Why is money not included in a theft insurance policy?

Answer 46

In the case of theft insurance, most losses are subject to the restricted wording for forcible and/or violent entry/exit. If this were the case with money insurance, much of the risk involved in cash handling and transit would be removed, leaving mainly the ‘outside business hours’ element cover. Therefore, by its very restriction, a theft policy would serve a limited purpose only.

Question 47

Assume that a money policy has a limit of £500 in respect of money left out of the safe on the insureds premises overnight? How much would the insurers pay for each of the following losses? A) £300 B) £600 C)£750

Answer 47

The amounts payable are: A) £300 B) £500 policy limit not subject to average C) £500 policy limit not subject to average

Question 48

``` What does the definition of money under a standard money policy NOT include? A) bank and currency notes B) lottery tickets C) luncheon vouchers D) postage stamps E) postal orders ```

Answer 48

B ) lottery tickets

Question 49

What are the three perils covered by the standard fire policy?

Answer 49

Fire Lightening Restricted explosion

Question 50

What are the four broad headings for special perils?

Answer 50

Perils of a chemical type Social perils Perils of nature Miscellaneous perils

Question 51

‘All risks’ exclusions may be devised into four groups or headings. What are these headings?

Answer 51

``` Those exclusions which are absolute Those exclusions which relate to an aspect of cover which could be written into the policy with care Those exclusions which relate to an aspect of cover which could be written into the policy Those exclusions which relate to property or risks more appropriate to another class of insurance ```

Question 52

How have insurers amended the theft wording, as defined in the theft act 1968?

Answer 52

Insurers have amended their theft wording under their commercial theft polices to cover ‘theft involving entry to or exit from the premises for forcible and violent means’

Question 53

What is one optional extension to a standard glass policy?

Answer 53

Answer should include; Damage to shopfront contents as a result of broken glazing Damage to washbasins and sanitary fittings in hairdressing salons

Question 54

What, in one sentence, is the cover generally provided under a stand money policy?

Answer 54

Money insurance is on an ‘all risks’ basis, covering loss from any cause, whether it is in transit or on premises, subject to agreed limits.

Question 55

What are two optional extensions to a standard money policy?

Answer 55

Credit cards | Personal accident assault risk