Non-Life Insurance Products and Coverages
What this domain tests
Recognition of the main non-life lines, what each insures, and which policy responds to a given loss.
Core coverages
- Fire. Standard fire policy covers fire, lightning and explosion; allied perils (windstorm, flood, earthquake) are added by endorsement. The average clause reduces recovery if the sum insured is below the value at risk.
- Marine. Cargo and hull cover, including Institute Cargo Clauses (A), (B), (C); general average and sue-and-labor charges may be covered.
- Motor. Compulsory Third-Party Liability (CTPL) for bodily injury/property damage to third parties; own-damage and theft cover are optional. Deductibles and depreciation affect settlement.
- Casualty, engineering and liability. Contractors' All Risks (CAR), Erection All Risks (EAR), public liability, products liability, employers' liability, personal accident, and allied lines such as burglary, money, fidelity, glass and equipment breakdown.
- Personal accident. Accidental death, disablement and medical expenses; distinct from life insurance and often excludes illness.
Worked example
A fire policy has a sum insured of PHP 8 million on a building worth PHP 10 million and a PHP 100,000 deductible. A PHP 2 million fire loss occurs. Because the sum insured is 80% of value, the average clause pays 80% of the loss: PHP 1.6 million, less the deductible, so PHP 1.5 million. Without the average clause the insurer would pay PHP 1.9 million.
Traps
Do not treat CTPL as own-damage cover; do not ignore average clauses; do not assume 'all risks' covers every cause; and do not mix engineering CAR/EAR with fire cover. Check whether liability cover is on an occurrence or claims-made basis.