MODULE 2
ALL RISKS
Yes. It is a camera.
And this is insurance.
Simple, understandable, no-mystery insurance.
36
CASE STUDY
SECTION ALL RISKS
MODULE INTRODUCTION
Mr X is highly impressed with the underwriting of the insurance for his house contents. He is also aware of the fact that he will
not enjoy cover in terms of Section House Contents in all circumstances. Since he is an avid sportsman, he would like to know
how he should insure his sport equipment and other possessions.
Therefore, it will be expected from you to answer all the questions he asks about the cover for equipment, etc. and to
complete the application form accordingly.
MODULE OBJECTIVE
The goal of this module is to evaluate your knowledge of the following aspects with regard to all risks insurance:
•
•
The answering of general questions on the policy cover and underwriting of Section All Risks; and
The completion of the application form in terms of Section All Risks.
TASK 1
Study the following photographs of the sport equipment of Mr X and answer the relevant questions accordingly. The
photographs are also on the CD (photographs 73, 74, 76, 77 and 78).
Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per
question.
Copyright ©Santam (Pty) Ltd. 2011
Course code: ASSESS-SPP2
37
QUESTION 1
Mr X says the value of his racing bicycle is about R30 000. He wants to know if he can insure his bicycle in terms of the
Santam’s personal policy.
1
QUESTION 2
Refer to Question 1. If the bicycle could be insured in terms of the Santam’s personal policy, what should he do to insure it
then? (Which suggestions will you make to ensure that the bicycle is correctly underwritten?)
3
QUESTION 3
Mr X arranged for financing to purchase the bicycle and wants to know if we will note the financial institution’s interests on the
policy.
2
Copyright ©Santam (Pty) Ltd. 2011
Course code: ASSESS-SPP2
38
QUESTION 4
Mr X says he participates in various races during the year. Some of these races take place outside South Africa’s borders, for
instance in neighbouring countries. Will he also enjoy cover in those countries in terms of his all risks policy?
2
QUESTION 5
If the bicycle of Mr X is specified on the policy, will there also be cover for accessories like the pump, water bottle, bicycle
computer, or does the cover only apply to the bicycle? In other words, should the above-mentioned equipment be specified
separately?
2
QUESTION 6
Describe how you will go to work in determining whether Mr X has made previous claims for this bicycle, which is of such a
high value.
1
.
Copyright ©Santam (Pty) Ltd. 2011
Course code: ASSESS-SPP2
39
QUESTION 7
Suppose he has claimed several times during a period of two years for accidents with his previous bicycle (bicycle’s value was
R40 000), which underwriting measures will you apply to this bicycle?
2
QUESTION 8
Mr X also owns a Raleigh mountain bike, which he uses for recreational purposes like when he goes riding into the veldt at his
holiday home. The value of this bicycle is R875. Is it necessary that Mr X specify this bicycle on the policy?
2
QUESTION 9
Do we still need a full description of this bicycle, even though its value is only R875?
1
Copyright ©Santam (Pty) Ltd. 2011
Course code: ASSESS-SPP2
40
QUESTION 10
When Mr X insures his golf set, does it provide cover for only the bag and clubs or will all the other accessories, like the sand
bag, balls, markers, tees and gloves he currently uses, be covered too? In other words, should the last-mentioned items be
specified separately?
2
QUESTION 11
Mr X wants to know if he should extend the policy to provide for replacement value.
1
TOTAL
Copyright ©Santam (Pty) Ltd. 2011
19
Course code: ASSESS-SPP2
41
TASK 2
With regard to the above-mentioned questions, Mr X now wants to insure the below-mentioned items in terms of Section All
Risks. Underwriting should be performed continuously.
Remember that any requirements you may require following on your inspection will have to be indicated clearly on the
application form.
Clothing and personal effects
Unspecified items:
R 5 000
Jewellery
Michel Herbalin ladies’ watch (
-- Model CSX 33 (serial number: 112233)
Rolex men’s watch
-- Model “Yachtmaster 100”(serial number: 1Y100R)
5 Gold bangles (R5 000 each)
R 8 000 (replacement value)
R25 000 (replacement value)
R25 000 (replacement value)
Racing bicycle
Make and model:
Original purchase price:
Replacement value:
Current value:
Use:
Merida 909
R25 000
R28 779
R15 000
Private and for races
Mountain bike
Make and model:
Raleigh Shutano 18
Original purchase price:
R600
Replacement value:R875
Current value:R400
Use:
Private (recreational purposes)
Golf set
Complete set Wilson’s “Pro” golf clubs including the golf bag and accessories.
Original purchase price:
Replacement value:
Current value:
Copyright ©Santam (Pty) Ltd. 2011
R18 000
R20 000
R15 000
Course code: ASSESS-SPP2
42
ALL RISKS
PROPERTY
SUM INSURED
PREMIUM
Clothing and personal effects (maximum R1 000 or 20% of the insured amount per item)
R
R
Personal documents, coins and/or stamp collection
R
R
Transport pf groceries and household goods
R
R
Keys, locks and remote control units
R
R
1. Make
R
R
2. Make
R
R
Wheelchairs
Bicycles
1. Make
Serial number
R
R
2. Make
Serial number
R
R
1. Make
Serial number
R
R
2. Make
Serial number
R
R
Cellular telephones
Television sets, video recorders, decoders and video cameras
1. Make
Type (eg. TV)
Serial number
R
R
2. Make
Type (eg. TV)
Serial number
R
R
3. Make
Type (eg. TV)
Serial number
R
R
1. Make
Type
Serial number
R
R
2. Make
Type
Serial number
R
R
3. Make
Type
Serial number
R
R
1. Description
Serial number
R
R
2. Description
Serial number
R
R
3. Description
Serial number
R
R
R
Computer equipment
Items in bank vault
Specified items (e.g. cameras and jewellery of which the value exceeds R1 000)
1. Description
Serial number
R
2. Description
Serial number
R
3. Description
Serial number
R
4. Description
Serial number
R
R
R
R
Endorsements
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Course code: ASSESS-SPP2
43
SUMMARY
Following on the information available to you with regard to this section:
•
How will you classify the insured and risk? Describe it in your own words.
•
Categorise the insured and risk by making a cross in one of the following blocks.
Low frequency/high risk
Copyright ©Santam (Pty) Ltd. 2011
Low risk/high frequency
No potential risk
Course code: ASSESS-SPP2