2. Insurance Products: Personal
Chapter 5
Insurance Products: Personal
3 questions = 4% of the exam

3. Learning Objectives:
After studying this chapter, you should be able to:
Describe the basic features and typical policy cover of the insurance types detailed
Explain the underwriting approach and considerations for various classes of insurance

6. Motor Insurance
Road Traffic Act Only - The minimum to comply with the Road Traffic Act 1988:
Unlimited cover for death and bodily injury
£1,200,000, for loss or damage to third party property
Claimants costs and expenses
Emergency medical treatment/hospital charges.
Third EU Motor Insurance Directive says policies must:
Provide the minimum cover in European country your traveling to.
Cover liability to persons in employment of the insured when travelling as passengers

7. Private Car Insurance Third Party Only RTA Only + ...
Covers vehicle off the road
£20,000,000 for third party property damage
Driving other cars (Insurer dependant)
Passenger indemnity
Claim defence legal costs
Exclusions…

8. Private Car Insurance Third Party, Fire and Theft TPO + ...
Damage caused by fire, lightning or explosion to the insured’s vehicle
Attempted theft or theft (may include T.W.O.C)
Stolen and not recovered
Exclusions…

9. Private Car Insurance Comprehensive TPFT + ...
Accidental and malicious damage to the insured’s vehicle
Windscreen – does not affect No Claim Discount (NCD)
Exclusions…
Comprehensive cover typically includes:
Personal Accident cover
Medical Expenses
Personal Belongings/Clothing

10. Extensions Breakage Of Glass Personal Belongings and Clothing
Young Additional Drivers
Loss of Use
Personal Accident Benefit
Foreign Use
Elections
Racing, Competition, Rallies and Trails
Caravans and Trailers
Breakdown Cover
Joint Policies

11. Exclusions

12. Usual market exclusions
Contractual liabilities
Riot and civil commotion – outside UK
Cover subject to valid driving license

13. Motor Cycle Insurance Basic Features Still subject to RTA 1988
Levels of cover the same
Specified motor cycle insurance
Comprehensive cover - 3 differences
Spare parts/accessories only covered if bike is stolen
No PA , medical expenses, personal effects
Liability section only covers insured and permitted drivers

14. Possible extensions Towing a Trailer Multiple Bikes
Driving Other Cycles
Multiple Bikes
Invalid Carriages

15. Commercial Motor Insurance
Basic Features:
Good carrying
Passenger carrying
Agricultural and forestry
Special construction
Always remember the goods carried by the vehicle are NOT covered, the customer would require Goods in Transit Insurance.

16. Commercial Motor Insurance
Third Party Liability
Loss or Damage to the Vehicle
Trailers
What's different to private motor

17. Loading and
unloading
Cover for TP liabilities can be provided for accidents whilst loading or unloading
Indemnity to driver
Usually anyone may drive with the owner’s permission
Indemnity to user
The insured may allow others to use the vehicle for SD&P use
Indemnity to passengers
Indemnity for passengers acts of negligence
Legal costs
The policy can be extended to cover legal costs

18. Optional Extensions Third Party Property Damage
Medical Expenses/Personal Accident Benefits
Personal Belongings and Clothing
Windscreen/Glass Cover
Indemnity to Hirers
Indemnity to Principal
Carnivals
Sheets and Ropes etc.
Loss of Use
Contingent Third Party
Occasional Business Use

19. Other Fleet insurance Contingent liability Occasional business use
Roadside assistance

20. Joseph has a comprehensive private car policy
Joseph has a comprehensive private car policy. Which of the following is not covered under the policy?
Tyre damage from driving over a nail in the road.
Windscreen damage caused by a stone on the motorway.
Damaged door lock and driver's door caused by attempted theft of vehicle whilst parked overnight.
Damaged car door and bumper caused in a supermarket car park by an unknown motorist.

21. Which policy covers damage to goods carried in a commercial vehicle?
a. A marine policy.
b. Goods in transit policy.
c. A motor fleet policy.
d. A commercial vehicle policy.

22. To comply with legal requirements, what limit of cover must be provided for causing injury or death to a third party ?
a. £1m
b. £1.2m
c. £20m
d. Unlimited

24. Three types of health Insurance
Personal Accident
Sickness
Medical Expenses
Private or group policies

25. Personal Accident and Sickness
Accident covers…
Accidental death and bodily injury.
Death and Permanent disability = Lump sum payment
Temporary disability = Weekly payment (104 weeks)

26. Personal Accident and Sickness
Sickness covers…
If you are unable to work due to sickness or disease.
Usually paid weekly (104 weeks)
Usually a time franchise applies e.g. 7 days
Usually excludes cover for the first 21 days – waiting period

27. Policy Benefits Death Loss of sight Loss of limb
Permanent Total Disability
Permanent Partial Disability
Temporary Total Disability
Temporary Partial Disability
Medical Expenses
Payment of benefits
Permanent = Lump sum
Temporary = Weekly amount
Total = Full payment
Partial = Reduced payment

28. Highest capital benefit is for death
Continental scale
Highest capital benefit is for death
All other benefits expressed as a percentage
For example: Loss of finger is 20% of death benefit

29. Exclusions Being under the influence of drugs/alcohol
Self-inflicted injuries
Pre-existing medical conditions
Aviation (unless a fare paying passenger) and hazardous activities
Childbirth, pregnancy, venereal diseases and AIDS
War (all market exclusions)
Sickness within the first 21 days

30. Medical Expenses Insurance
Basic Features…
Private medical treatment outside the NHS
Standard policy cover:
In-patient cover provides…
Hospital Charges Specialist Fees Additional Costs
Limitations:
Pre-existing conditions and Long-term Care = NOT COVERED!

31. Which of these types of insurance is not a health product?
a. Medical expenses.
b. Whole life.
c. Sickness.
d. Personal accident.

32. Which type of policy bases one of its benefits on a continental scale?
a. Medical expenses.
b. Travel insurance.
c. Sickness.
d. Personal accident.

33. Aaron loses a finger in an accident
Aaron loses a finger in an accident. Under the permanent partial disablement benefit in his personal accident policy, what percentage of the death benefit will he be paid?
a. 50%.
b. 10%.
c. 20%.
d. 30%.

35. Household Insurance Basic features… Covers buildings and/or contents
Two options for settlement:
INDEMNITY
(or market value)
NEW FOR OLD
(or reinstatement)
Deduction for wear and tear
Full cost to replace item as NEW

36. Buildings Insurance Fire, Lightning, Non-Automatic explosion and
earthquake
Non-Automatic
Extension
Riot, civil commotion,
malicious damage
or vandalism
Loss of Rent
Storm or Flood
Legal Fees and
Debris Removal
Falling Trees or Branches
Accidental Breakage of Glass and Sanitary Ware
Escape of Water
Escape of Oil
Accidental Damage to
Drains, Pipes and Cables
Theft or Attempted
theft
Breakage or Collapse
of Aerials
Impact
Subsidence, Ground Heave
and Landslip

37. Vs Buildings Contents Contents Cover
“If you were to tip your house upside down, everything that falls out is contents”
Differences between Buildings and Contents:
Theft Cover – Forcible and Violent, Entry or Exit
Accidental Damage – In exchange for an AP

38. 1/3 of total contents sum insured.
Contents Cover
Single Article limits and Valuable limits…
Single article limits
Valuable limits
Each individual valuable must not be worth more than 5% of the total contents sum insured.
1/3 of total contents sum insured.

39. Contents Cover Extensions Non-Automatic Extensions
Temporary Removal
Clothing and Personal Goods of Domestic Staff
Accidental Breakage
Loss of Rent
Non-Automatic Extensions
Accidental Damage to Entertainment Equipment
Accidental Damage Whilst in Course of Removal
Other Policy Extensions

40. Contents Cover
Specific Exclusions…

41. Legal Liability (buildings and contents)
Covers liabilities that arise from:
Buildings owned or previously owned
Defective Premises Act 1972
Contents:
Covers liabilities that arise as a:
Occupier rather than owner
Private individual
Employer of domestic staff
Common policy limit is £2 million per claim.

42. PA, Hospital cash plan, Creditor
Optional Extensions
All risks
Identity fraud
Money & Credit cards
Legal expenses
Bicycles
Domestic animals
Freezer contents
PA, Hospital cash plan, Creditor
Caravans
Sports equipment
Small craft

43. Limitations – Buildings & Contents

44. Flood:re Why was it set up??? Properties not covered: Businesses
Large blocks of flats
Band H council tax houses
Houses Built after 01/01/2009

45. What is the definition of a small craft which can be insured under an extension to a standard household policy?
Vessels not exceeding 17 feet overall and with design speeds not exceeding 20 knots.
Vessels not exceeding 16 feet overall and with design speeds not exceeding 17 knots.
Vessels not exceeding £35,000 replacement cost.
Vessels not exceeding £25,000 replacement cost.

46. Flood Re is designed to offer flood cover for:
a. large businesses.
b. Council tax band A to G properties.
c. household properties built after 2009.
d. small businesses.

48. Travel Insurance No standard policy wording! Typical policy cover…
Personal Accident
Travel Delay
Medical Expenses
Travel Interruption
Loss of Deposit
Hospital Cash Benefit
Baggage/Personal Effects
Delayed Baggage
Personal Liability

49. Travel Insurance Optional Extensions… Failure of Tour Organiser
Lack of Services/Amenities
Loss of Passport
Legal Expenses

50. Limitations – Travel Insurance

52. Extended Warranties
What is the difference between a manufacturers warranty and an extended warranty ???
Free repairs following electrical and mechanical defects for up to 5 years
Covers replacement parts and/or labour
If beyond repair within first five years, some insurers will replace it with nearest model

53. Extended Warranties Repairs must be carried out by a supplier
of the equipment
Exclusions:
Failure to comply with manufacturer’s
instructions, or negligent handling
Risks normally covered by a household contents policy
War etc.
Costs of bulbs, aerials, external wires, knobs, handles, driving belts etc.

55. Some insurance policies are known as benefit policies
Some insurance policies are known as benefit policies. Which of the following is a benefit policy?
a. Private car.
b. Commercial all risks.
c. Business interruption.
d. Personal accident.

56. There are several features of extended warranty insurance
There are several features of extended warranty insurance. Which of the following is NOT one of these?
Repairs must be carried out by the insurer's recommended repairer.
Risks normally covered by a household contents policy are excluded.
A typical sum insured is approximately £2,500.
Policies are available to cover all an insured’s electrical products.