IFI Chapter 7 Quiz

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