Last week we posed 20 questions to test your knowledge of household and motor insurance. Here are the answers
1. Which of the following is NOT usually covered by an unfurnished household contents policy?
2. If a premium is paid on a monthly instalment plan and a claim has been settled during the current period of insurance, if the customer cancels the policy what refund of premium can typically be expected?
3. A customer is required to maintain the property insured in good repair. Which of the following does NOT typically receive a reduction for wear and tear?
a) jewellery (precious stones)
4. Which of the following is a term used to describe property which has some special measure of protection, e.g. a house with a burglar alarm?
b) protected risk
5. What is meant by the term `pairs and sets' clause?
b) the clause limits the loss of one of a pair to the value of the item in its own right.
6. For the purposes of contents cover, which of the following is NOT usually covered by the term `money'?
c) lottery tickets
7. Under which one of the following conditions is the insured usually covered for smoke damage?
c) if it is caused by a domestic accident
8. A typical household contents policy will include an automatic increase in the sum insured for what reason?
a) for Christmas
9. If the repair of the damaged parts of a dwelling results in a reduction in the market value of a property, which one of the following is typically correct?
d) the insurer will not pay any reduction in the market value
10. If the home is being sold and between exchange of contracts and completion of the sale, the property is destroyed, who is entitled to any benefit from the insurance after the completion of the sale?
11. Which of the following is the correct definition of a `comprehensive policy'?
c) a policy covering a number of risks
12. Which of the following is the most accurate definition of a green card?
b) a document required by certain non-EU countries to provide proof that the Insured has the minimum insurance cover required by law to drive in that country
13. Which UK legislation sets the minimum insurance requirements for drivers?
a) the Road Traffic Acts
14. What is the maximum duration that a cover note can be issued for?
d) 60 days
15.Which organisation, as a haven of last resort, has the responsibility of compensating accident victims where no insurance cover is applicable as the culprit was uninsured or untraced?
b) Motor Insurers Bureau
16.When does the excess for glass not usually apply on a standard motor policy?
a) when the glass is repaired
17. Which one of the following statements is false when considering the usage of a vehicle for carriage for hire and reward in a private motor policy?
c) it generally includes car sharing where payment is made to the driver
18. Which one of the following is generally not covered by the theft section of a private motor policy?
d) theft by a member of the insured's household
19. What is generally considered to be the market value of a vehicle?
d) the cost of replacing the vehicle with one of similar type and condition
20. Which of the following must not legally be included on the certificate of motor insurance?
a) full details of the policy cover
So, how did you get on? Remember that this is a diagnostic assessment so what we have to do now is to consider what the results mean in terms of personal and staff competence.
What you will notice is that the focus of the 20 questions was generally what is or is not covered by a typical household and motor insurance policy. There was none of those questions about market principles (disclosure, insurable interest etc) nor was there any behavioural questions (what do you do in this or that situation).
In other words, this was a basic product knowledge assessment as required by GISC and the first stage of a process of risk management designed to reduce the chance of PI claims and customer dissatisfaction.
Remember also that full product knowledge assessment might well involve specific products in the market and should include anything unique or unusual about the products that you actually recommend.
A good example is that in a recent commercial PI claim, one company's business interruption policy automatically included and increase in cost of working item for the time to replace lost documents, the replacement policy did not. You can guess what happened!
In an ideal situation, anyone who is advising on household or motor policies in your firm (see last week's CPD article) should have done well in this assessment. In a non-prescriptive regulatory environment it is up to you what level of success is deemed a competent result but in reality, should you not be considering that 100% is an ideal benchmark?
Surely, anyone who has not answered a question correctly can be asked to go away with the questionnaire itself plus a standard household and motor policy wording and be asked to return to undertake another questionnaire in say a month. This process can be repeated until the individual achieves a 100% norm at which time you may suggest a six monthly assessment to make sure that the knowledge remains in place and up to date.
But what do you do if the result is poor, say more than four wrong answers, the choice is yours). There must be a benchmark below which you should question whether an individual should be giving advice unsupervised. In such cases, you may well wish to adopt a more proactive approach to filling the knowledge gap and consider one to one or group training before a further assessment and a return to unsupervised activity.
Proof of knowledge and understanding competence lies in three measurements:
Facts: what is or is not
Behavioural: what to do or not do
The effect: of getting things write or wrong.
Take for example question 17 above.
Fact: the policy includes car sharing if no payment is made to the insured
Behaviour: a proposer should be asked if car sharing takes place and whether a payment is received
The effect: The receipt of a payment could invalidate a claim and possibly allow the insurer to avoid if not disclosed.
What we have created is a Competence Lozenge © for that fact. The only matter that remains unresolved is whether the individual applies this knowledge and understanding in the workplace and this can be addresses with a robust supervision and monitoring procedure.
Do let us know how you got on and we will be taking a look at another area of the insurance business in a month's time.
Using this CPD page to help you to create a regular study plan
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.
You will need Adobe Acrobat
To download a PDF of this article as it appears in the magazine click here .