Personal possessions in household insurance should be fairly straightforward, but when it comes to lists of items then it's time to turn to legal principles. Robin Wood explains
This week we consider an area of household insurance which can cause confusion - that of lists of items. It is governed by the ejustum generis rule, and our piece is an extract from the Society of Claims Technicians' Insurance Law Principles.
The "ejustum generis" rule arises when you encounter a list of items, some of which are general for example:
"This section covers fine art, gold, silver, gold and silver plate and other items of a collectable nature."
Unless more specifically defined, the items of a collectable nature will be regarded as similar in character to the fine art, gold, silver, gold and silver plate listed in the earlier part of the clause. While the majority of claims are likely to be for the items specified, there may be occasions when unusual items are included (for example, a fine ivory chess set) and it may be necessary for you to clarify whether it was the intention of the policy to cover them.
So the first exercise for this week's CPD is to study all the household policies you recommend and establish whether such a clause exists. Having done that, consider whether, taking into account the ejustum generis rule, your customers are covered in the manner you thought they might have been.
For example, vinyl records from the 1950s and 1960s have rocketed in value over the last five years. A mint copy of The Who's My Generation album could be worth £300 or more, A first pressing Beatles Please Please Me on a gold label stereo, over £1,000 and fine condition albums of many artists £25 upwards.
Many of your customers will still have a handful to a few hundred of these. Would the cover you have arranged provide adequate cover when something like slight heat could destroy the value?
Take a moment to consider what collectible items have risen in value over the past decade and think whether the cover arranged is adequate. Would the collectible items be barred in any way from full cover by the ejustum generis rule.
Which leads to the second point this week and the definition of personal possessions.
Most household policies grant cover for personal possessions outside the home. What I would like you to do this week is to consider a universal definition of personal possessions that would satisfy insurers and also customer needs.
To give you an idea of the complexity of the subject, an insurer recently advised me that its view of personal possessions was: "something that could be carried about the insured's person".
So, a 20kg ghetto blaster for a bricklayer with a six pack is covered, but not for an 80-year-old 4ft 11in pensioner?........I think not.
Email us with any suggestions you have or any examples of problems that have arisen in this area.
Just a little conundrum for you. How many unfurnished properties, when let, have contents owned by the lessor? What would be deemed contents in such a situation?
Have you advised clients who own such properties that they may need contents cover? What about liability cover?
If not, might they not sue you for negligence if there is a loss and there is no cover in place?
And just an adjunct to that, (and in response to a number of similar actual circumstances arising recently) if your client owns a leasehold flat, or indeed a leasehold property generally, who is responsible for the insurance of the property?
What is the position if the property burns down and there is inadequate insurance or the insurer avoids the loss for reasons of non-disclosure by the landlord/freeholder?
You may know the answers already, but this is designed as a short risk management exercise. Consider the following.
You should find the answer (ask a colleague, insurer, property insurance specialist)
Having found the answer, do you think any of your customers have inadequate cover?
What are you going to do about it?
If the result of the exercise leads you to believe that there are gaps in cover are your customer's (the public) at risk and if you did nothing, would a regulator consider you to be non-compliant?
The purpose of this week's CPD page is to emphasise to readers how important it is to embark upon a continuous process of learning and development and to record the event, the outcomes, actions taken etc.
Whatever Mr Chump from Wherever Town tells you about the waste of time that CPD and recording it presents, ignore him.
Whether you are learning something that has immediate application or just learning something new for the future, it is all part of the modern regulator's requirement that you maintain and update competence. Knowledge, understanding and if it does affect you.......application.
I am going to take the unusual step of recommending that you purchase a publication. If you are a regular reader you will know that we are keen that practitioners have a reasonable knowledge of insurance law and to date have highlighted the CII's PO3 text book as a basic guide.
Last week, we printed an extract from the Society of Claims Technicians' Insurance Law Principles and on request we were sent a copy.
Although not comprehensive (this would take quite a tome), this is a fantastic little source book that will help you know and understand more about the subject (both GISC and FSA would expect that of practitioners) and at £15 great value.
You can obtain a copy by faxing the SOCT on 0207 7929 3082 and if you like it, do not limit yourself to just one copy per office.
I did find that there is quite a lot of simplification - for example, the legal requirements for a contract to exist - but perhaps the beauty of this publication is that it is a good read for anyone who wishes to take seriously their role in the insurance industry and a good starting point for further study.
There is an appendix of over 50 legal cases which have been explained in plain English. This will be useful for any trainers who want examples to illustrate a point.
Using this CPD page
For the vast majority of practitioners and indeed support and supervisory staff in our industry, CPD is about regular learning and study that is planned, recorded, timed and evaluated.
If you are a member of a professional body with a CPD requirement then there will be certain rules regarding the quality and nature of study material, and the way in which it is recorded.
For staff of GISC members this means recording on your individual training file what the learning was, who provided it and when.
It might be structured, such as a course, a learning programme or exam study. But it can be unstructured. This form of study encompasses reading the trade press, technical material or taking part in activities to support your professional body.
Some CPD requirements are points related (a little antiquated) and others require a time value to be allocated.
For example, it might take one hour to read Insurance Times each week. Most of that could be put as a time value but, in reality, perhaps only an half hour was devoted to learning something. The rule is to be honest with yourself and record the time that is relevant.
Always take time to make a note of what you felt you gained from the activity. This is useful information for anyone else considering the same activity.
In response to the popularity of our CPD programme each week's CPD page can now be downloaded from our website. We will be preparing a binder for you to keep these in alongside the results of the exercises.
To download a PDF of this article as it appears in the magazine click here .
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