PI Unit 5 - Claims

Which one of the following is not an extension that increase the amount of indemnity?

• Reinstatement Clause

• Average Clause

• New for Old Clause

• Agreed Value Clause

Subrogation is applicable to all classes of insurance.

• True

• False

Which one of the following is not a factor that limit the amount of indemnity?

• The sum insured

• Other policy limits

• Under-Insurance

• Reinstatement clause

Pecuniary insurance covers businesses against pure financial losses.

• True

• False

The amount an insured must pay out of pocket before an insurance company will pay for the remainder of the claim for a Household Insurance policy is known as

• deductibles

• excess

• franchise

• subrogation

Huat Huat Trading Ltd had a fire at its warehouse. The company claimed a loss of $20,000 against its fire insurance. The loss adjuster was satisfied the loss claimed was correct. However, he reported that there were at least $50,000 worth of stocks in the warehouse but only $40,000 were insured. The adjusted loss amount is

• $12,000

• $14,000

• $16,000

• $18,000

Subrogation is defined as

• the right of the insurer to take the rights of the insured.

• allowing the insured to claim for more than 2 insurers