CII IF4 cheat sheet

Claim notification: the policyholder must notify the insurer within a reasonable time or a specified period; late notification only defeats a claim where it causes prejudice to the insurer's investigation.

Insurer's first duties on notification: acknowledge promptly, appoint a named handler, confirm policy number and claim reference, and issue a claim form or request the required evidence.

Coverage check sequence: (1) is the policy in force at the date of loss; (2) is the peril insured; (3) do exclusions or conditions apply; (4) are policy limits, sub-limits, deductibles and average correctly applied.

Indemnity principle: the insured is restored to the pre-loss financial position, no better and no worse; new-for-old replacement is only available where the policy expressly provides it.

Average (underinsurance) formula for property: claim payment = loss x (sum insured / value at risk at the time of loss), less any deductible.

Betterment and salvage: where the insured retains damaged property or receives improved property, the settlement is reduced by the residual or improved value.

Claims conditions are usually conditions precedent to liability: failure to submit a proof of loss, or to allow subrogation rights to be preserved, can entitle the insurer to decline.

Fraudulent claim rule: a deliberately exaggerated or fabricated claim entitles the insurer to reject the whole claim and may allow avoidance of the policy from inception; a wholly fraudulent claim forfeits all benefit.

Subrogation: after paying, the insurer is subrogated to the insured's recovery rights against third parties; the insured must not prejudice those rights by settling with the third party.

Contribution between insurers: where two policies cover the same interest, the same peril and the same loss, liability is shared, commonly rateably by independent liability or by the sum-insured proportion.

Third-party liability claims: the insurer's duty is to indemnify the insured against legal liability, and it normally controls the defence; claimant costs and defence costs are payable in addition unless the limit states otherwise.

Limitation periods: contract claims are generally time-barred after six years (twelve for deeds) in England and Wales, but policy wording and jurisdiction may impose shorter notification or limitation terms.

Reservation of rights: where coverage is uncertain, the insurer should continue handling while reserving its position in writing, avoiding any representation that cover is confirmed.

Complaints and disputes: an unresolved claim complaint may go to the Financial Ombudsman Service within the eligible time limits, and the insurer must issue a final response letter.

Claim notification: the policyholder must notify the insurer within a reasonable time or a specified period; late notification only defeats a claim where it causes prejudice to the insurer's investigation.

Insurer's first duties on notification: acknowledge promptly, appoint a named handler, confirm policy number and claim reference, and issue a claim form or request the required evidence.

Coverage check sequence: (1) is the policy in force at the date of loss; (2) is the peril insured; (3) do exclusions or conditions apply; (4) are policy limits, sub-limits, deductibles and average correctly applied.

Indemnity principle: the insured is restored to the pre-loss financial position, no better and no worse; new-for-old replacement is only available where the policy expressly provides it.

Average (underinsurance) formula for property: claim payment = loss x (sum insured / value at risk at the time of loss), less any deductible.

Betterment and salvage: where the insured retains damaged property or receives improved property, the settlement is reduced by the residual or improved value.

Claims conditions are usually conditions precedent to liability: failure to submit a proof of loss, or to allow subrogation rights to be preserved, can entitle the insurer to decline.

Fraudulent claim rule: a deliberately exaggerated or fabricated claim entitles the insurer to reject the whole claim and may allow avoidance of the policy from inception; a wholly fraudulent claim forfeits all benefit.

Subrogation: after paying, the insurer is subrogated to the insured's recovery rights against third parties; the insured must not prejudice those rights by settling with the third party.

Contribution between insurers: where two policies cover the same interest, the same peril and the same loss, liability is shared, commonly rateably by independent liability or by the sum-insured proportion.

Third-party liability claims: the insurer's duty is to indemnify the insured against legal liability, and it normally controls the defence; claimant costs and defence costs are payable in addition unless the limit states otherwise.

Limitation periods: contract claims are generally time-barred after six years (twelve for deeds) in England and Wales, but policy wording and jurisdiction may impose shorter notification or limitation terms.

Reservation of rights: where coverage is uncertain, the insurer should continue handling while reserving its position in writing, avoiding any representation that cover is confirmed.

Complaints and disputes: an unresolved claim complaint may go to the Financial Ombudsman Service within the eligible time limits, and the insurer must issue a final response letter.