WCE Mock paper 3

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What is the primary benefit of a personal accident and sickness policy?

Paying a weekly benefit for the period of inability to work

Paying a one-off lump sum

Paying a weekly benefit for three months (correct)

Paying only for temporary partial disablement

What type of loss does a business interruption insurance policy primarily cover?

Loss caused by a drop in share value

Loss of profits (correct)

Loss of turnover

Loss caused by bad debts

Why does a personal accident and sickness insurer want to know about other similar policies?

To prevent the policyholder from receiving excessive benefits (correct)

To ensure the policyholder does not receive more than an indemnity

To share the cost of any claim with the other insurer

To detect potential fraud

Which department is responsible for setting individual case reserves?

Claims Signup and view all the answers

What does factor reserving mean in the context of motor insurance claims?

Assessing the reserve for each claim individually on a realistic basis Signup and view all the answers

What is not a primary responsibility of the claims department?

Managing investments Signup and view all the answers

Under what circumstances does an insured have a duty to mitigate a loss?

Always, whether mentioned in the policy or not Signup and view all the answers

What level of cover does Peter have under the driving other cars extension of his policy?

He will have third party only cover Signup and view all the answers

What additional product service under Darryl's household insurance policy would assist him in obtaining compensation for the damage caused by his neighbour's dog?

Legal expenses insurance Signup and view all the answers

Which part of Jon's claim would his household insurer usually agree to settle?

The contents damage only Signup and view all the answers

What is the primary reason an insurer accepts a claim as the proximate cause?

As the proximate cause is an insured peril Signup and view all the answers

What is the most likely reason Jon's household insurer would not agree to settle the full replacement value of the roof?

The roof is too old Signup and view all the answers

Why has ABC Insurance likely chosen a functional structure for its business?

It is a large company offering a wide range of products Signup and view all the answers

What is the LEAST LIKELY reason an insurer chose claims system A over B?

A was cheaper Signup and view all the answers

What is the primary benefit of the organisational structure chosen by an insurer?

Ensuring it meets its regulatory requirements Signup and view all the answers

How does an insurer typically settle the insured proportion of a claim where a repairer is used?

The insurer settles the bill directly with the repairer Signup and view all the answers

Which team is responsible for pursuing an insurer's subrogation rights?

Subrogation team Signup and view all the answers

What is the primary goal of an insurer's subrogation efforts?

To recover losses from third parties Signup and view all the answers

If an insurer suspects a claim is fraudulent but cannot prove it, can it choose to settle the claim by supplying a new item instead of cash?

No, as the policy only states settlement by cash Signup and view all the answers

Who owns the salvage of a total loss vehicle once the insurer settles the claim?

The insurer Signup and view all the answers

Why might an insurer refuse to settle a claim for stolen laptops from a business premises?

The alarm system was not on at the time of the theft Signup and view all the answers

What type of expenses might an insurer cover in addition to the cost of lost luggage?

Medical expenses and travel delay expenses Signup and view all the answers

What might an insurer suspect about a claim if it wants to settle by supplying a new item instead of cash?

The claim is fraudulent and the policyholder wants money Signup and view all the answers

What is the most likely occupation of the individual providing legal advice to the insured?

A freelance solicitor on the insurer's panel Signup and view all the answers

What is the primary concern when an insurer suspects a fraudulent claim?

Discouraging policyholders from making invalid claims Signup and view all the answers

What type of expense might be deducted from a claim payment under a household buildings policy?

An allowance for betterment Signup and view all the answers

Who would be the most appropriate person to negotiate a settlement on behalf of Hamza after a fire at his factory?

A loss adjuster Signup and view all the answers

What might happen to a car once an insurer settles a total loss claim?

The insurer takes ownership of the salvage Signup and view all the answers

What would ABC Insurer most likely do first if they suspect fraud in a theft claim?

Appoint a specialist claims investigator Signup and view all the answers

Who would be responsible for the cost of repairing Patricia's kitchen window?

The builder personally Signup and view all the answers