MODULE 2 - Santam · CASE STUDY SECTION ALL RISKS ... Rolex men’s watch R25 000 ... Personal documents, coins and/or stamp collection R R

MODU

LE 2

ALL RISKSUnit standards applicable

120011 Apply knowledge of personal all risk insurance120118 Underwrite a standard risk in short term personal insurance120121 Apply technical knowledge and understanding of the cover provided under a Short Term Multi-Peril

Insurance policy

Assignment.indd 32 25/04/2013 11:11:47 AM

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Copyright ©Santam Ltd. 2013 Course code: ASSESS – SPP2

CASE STUDY SECTION ALL RISKS

MODULE INTRODUCTIONMr X is highly impressed with the underwriting of his House Contents insurance. He understands that not all circumstances will be covered under the House Content section. He is an avid sportsman and would like to know how his sporting equipment and other personal belongings could be insured.

It is required from you to first answer all the questions relating to the cover of his equipment and personal belongings, and then complete the application forms accordingly.

MODULE OBJECTIVEThe 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 1Study 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.


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Question 1Mr 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 2Refer 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 3Mr 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


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Question 4Mr 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 5If 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 6Describe 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

Question 7Suppose 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


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Question 8Mr 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 9Do we still need a full description of this bicycle, even though its value is only R875?

1


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Question 10When 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 11Mr X wants to know if he should extend the policy to provide for replacement value?

1

TOTAL 19


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TASK 2With 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 effectsUnspecified items: R 5 000

JewelleryMichel Herbalin ladies’ watch R 8 000 (replacement value)

– Model CSX 33 (serial number: 112233)

Rolex men’s watch R25 000 (replacement value)

– Model “Yachtmaster 100” (serial number: 1Y100R)

5 Gold bangles (R5 000 each) R25 000 (replacement value)

Racing bicycleMake and model: Merida 909

Original purchase price: R25 000

Replacement value: R28 779

Current value: R15 000

Use: Private and for races

Mountain bikeMake and model: Raleigh Shutano 18

Original purchase price: R600

Replacement value: R875

Current value: R400

Use: Private (recreational purposes)

Golf setComplete set Wilson’s “Pro” golf clubs including the golf bag and accessories.

Original purchase price: R18 000

Replacement value: R20 000

Current value: R15 000


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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

Wheelchairs

1. Make R R

2. Make R R

Bicycles

1. Make Serial number R R


Cellular telephones



Television sets, video recorders, decoders and video cameras

1. Make Type (eg. TV) Serial number R R



Computer equipment

1. Make Type Serial number R R



Items in bank vault

1. Description Serial number R R



Specified items (e.g. cameras and jewellery of which the value exceeds R1 000)





Endorsements


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SummaryFollowing 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 Low risk/high frequency No potential risk

MODU

LE 3


Documents

MODULE 2 - Santam · CASE STUDY SECTION ALL RISKS ... Rolex men’s watch R25 000 ... Personal documents, coins and/or stamp collection R R