Nat was the victim of an accident where he was unable to trace the other driver. He submitted a claim to the Motor Insurers’ Bureau [MIB], which was subsequently rejected. What further action, if any, could he take?
He may make a claim to an independent arbitrator.
James has a household policy with an excess of £250 for each and every claim. With a valid claim for £650 how much will his insurers pay, if anything?
£400.
Emma insures the building of her retail premises for £150,000 with no inflation protection. She has a serious fire loss and the value of the building at the time of the loss was £200,000. If the claims cost is £60,000, how much will her insurer pay, ignoring any excess?
£45,000.
How is the value of any salvage determined when the insured wants to retain it?
By agreement between the insurer and the insured.
An insurance policy has a clause that indicates that claims below a certain amount will not be paid but claims above this amount will be met in full. This is known as a policy:
franchise.
The pro rata condition of average requires the sum insured to be what minimum percentage of the value at risk to avoid a penalty?
100%.
Most property insurances incorporate an average clause. What is the purpose of this?
To ensure that the insured is responsible for a proportion of any losses if the property is under insured.
How is the Motor Insurers’ Bureau funded?
By a levy on all motor insurers.
A claims handler is responsible for determining individual case reserves. In estimating these reserves, they are LEAST likely to use information from a[n]:
underwriter.
The payment of money, paying for repairs and replacement are all types of:
settlement options.
As well as compensating the victims of untraced and uninsured motorists in the UK, the Motor Insurers’ Bureau also acts as the compensation body for UK citizens who have been involved in accidents in:
Europe.
How does factor or flag reserving operate when reserving on individual policies?
It applies a standard monetary reserve to each claim of a certain type.
One of the methods used to project claims is known as the:
Loss Development Factor.
A policyholder failed to set the burglar alarm and the property was broken into, resulting in items being stolen. If setting the alarm was a warranty under the policy, what action is the insurer likely to take?
It will repudiate the claim.
When there is more than one insurer involved with a potential claim, what insurance principle may be applied to the claim?
Contribution.
Under the uninsured drivers’ agreement, what is the maximum compensation limit the Motor Insurers’ Bureau will pay for third party property damage?
£1.2m.
Where a motor accident is caused by an uninsured or untraced driver, which organisation works to compensate the victims?
Motor Insurers’ Bureau.
Steve suffered a loss on his buildings insurance when a storm blew over his garden wall. He has been asked to submit a quotation to repair it and for the builder to send the final invoice to the insurer direct. This type of claim settlement is known as:
paying for repairs.
With the uninsured drivers’ agreement, the Motor Insurers’ Bureau will compensate victims where certain conditions are met. What is NOT one of these conditions?
Damages for third party personal injury must be limited to £500,000.
What is the name of the clause that states that the insured will act as their own insurer for the difference between the actual and declared values?
The average clause.
If a major haulage contractor wished to limit its cover to large claims and be its own insurer for small claims, what action may it take?
Arrange for a deductible on its policy.
Under the terms of a policy, when is an insurer able to commence subrogation rights against a negligent third party?
As soon as a claim is made.
Under a property all-risks policy, the insurers impose an excess of £1,000 for subsidence. With a claim for subsidence costing £4,250, what will the insurers pay to the insured?
£3,250.
Reinstatement is typically used by insurers for claims relating to what type of insurance?
Home insurance.
