WorksheetsIFI Chapter 7 Quiz
Total questions: 16
Worksheet time: 16mins
What is the maximum liability claim allowed under a motor insurance policy for injury resulting from a crash?
An unlimited amount.
The maximum limit stated in the policy
The maximum statutory limit.
A set maximum amount agreed by insurance companies.
If the stock of a wholesale shop was destroyed, what will the insured typically receive from the insurer?
The reinstatement value plus transport costs.
A fixed amount.
Replacement on a new for old basis.
The replacement cost plus transport and handling costs.
Insurers must settle all valid claims within a reasonable period under:
the Consumer Rights Act 2015.
PRA rules.
Financial Ombudsman guidance.
the Enterprise Act 2016.
What will the policyholder typically receive when making a claim on a household contents policy?
The original cost for all items.
The original cost less a deduction for wear and tear for most items.
The replacement cost for most items.
The replacement cost less an amount for wear and tear for all items.
Carlos has insured a classic car for an agreed value of £20,000. If he suffered a total loss and the car was worth £30,000 at the time and a replacement will cost £25,000, what amount will Carlos receive from the insurer?
£20,000
£16,667
£25,000
£30,000
What is an insurance policy known as where the amount of the potential total loss is agreed at the outset?
Total protection policy.
Stop-limit policy.
Maximum indemnity policy.
Agreed value policy.
The principle of indemnity aims to:
enhance the insured's financial position.
provide a pre-determined amount irrespective of financial value.
maintain the insured's financial position.
maintain the insured's financial position and provide an amount for material inconvenience.
Heather has 'worldwide all risks cover' on her contents policy of £10,000. She also has cover against theft on her travel insurance of £5,000. If she had belongings worth £7,000 stolen whilst on holiday, what would be the maximum amount she could claim?
£5,000
£10,000
£15,000
£7,000
An example of a benefit policy is:
liability insurance
buildings insurance
personal accident insurance.
motorcycle insurance.
A contents insurance policy has a sum insured of £20,000 with jewellery restricted to 5% of the sum insured for any one item. If a watch worth £5,000 is stolen, what is the maximum he would receive in settlement?
£20,000
£5,000
£2,500
£1,000
The principle of indemnity applies to:
personal accident insurance.
business liability insurance.
critical illness insurance.
payment protection insurance.
When do insurers use averaging for a claim?
When a risk is underinsured.
To establish the claim value under an agreed value policy.
When there are multiple insurers.
In establishing proximate risk.
What is the maximum amount that would typically be paid under personal liability insurance?
The amount awarded by the court only.
The amount awarded by the court plus associated costs and expenses.
The limit of liability specified in the policy wording.
An amount calculated as detailed in the policy wording.
A building was originally insured on an indemnity basis for £1m. Assuming the value of the property at the time of loss is £900,000, what is the maximum possible claim under the insurance policy?
£1m
£900,000
£1m plus loss of profits
£900,000 plus loss of profits
After a fire at a factory, the policyholder claimed £15,000 for loss of stock. On investigation it was established that the stock had been insured for £20,000 when it was worth £30,000. How much would the insurer pay in settlement?
£10,000
£30,000
£15,000
£20,000
If a policyholder suffers a loss under their household policy, the principle of indemnity will:
return them to the same financial state as before the loss.
provide them with replacement items
allow them to repair damaged items up to the full value of a new replacement.
allow them to replace what they have lost, even if this puts them in a better financial position.
