Personal General Insurance
Core concepts
Personal lines covers motor, household (buildings and contents), travel, and personal accident. Candidates must understand insurable interest, utmost good faith/disclosure, indemnity, subrogation, contribution, and average (under-insurance).
Know the cover structure: buildings (structure, fixtures, permanent fittings) vs. contents (movables, personal effects); sum insured vs. sum assured; excess/deductible; exclusions (wear and tear, gradual deterioration, intentional acts); and new-for-old vs. indemnity settlement. For motor, distinguish third party, third party fire and theft, and comprehensive, and understand no-claims discount and agreed value vs. market value.
Traps in questions
- Applying average incorrectly: payout = loss × (sum insured ÷ actual value). Under-insurance reduces claims proportionally.
- Confusing excess (first amount paid by insured) with exclusion (loss not covered at all).
- Assuming buildings cover includes contents - they are separate sections.
- Forgetting insurable interest must exist at inception (and often at claim).
- Mixing subrogation (insurer steps into insured's rights after paying) with contribution (sharing between insurers).
Worked example / rule of thumb
Average clause: property worth 200,000 insured for 150,000; loss 40,000. Payout = 40,000 × (150,000 ÷ 200,000) = 30,000, less any excess.
Rule of thumb: Insure to full reinstatement value, not market value, for buildings; otherwise average bites. Always state the excess and whether settlement is new-for-old or indemnity.