Direct Electronic
Frequently Asked Questions
Insurance terms can be confusing. These FAQS are not intended to answer all
the questions arising but are a brief alpha listing of the more common
features. You are welcome to address any technical insurance questions to
Direct Electronic in regard to UK insurance.
Accident
Alarm Systems
Brokers
Changes
Claims History
Comprehensive Home and Contents Cover
Comprehensive Motor Insurance
Compulsory Excess
Discounts
Female Drivers
Mature Drivers
Mileage
Monthly Premium Payment
New For Old
No Claims Discount
No Claims Discount Protection
Occupation
Personal Belongings
Road Traffic Legislation
Security Discounts
Two Cars Insured
Usage
Further Queries (direct@londonmall.co.uk)
There have been many court cases over the meaning of "Accident". It is generally accepted that it is an unforseen event which happens by outward, visible and violent means. "Violent" could be the breaking of a window by a burglar, or the knocking over of a vase by a dog.
If a policyholder has an alarm system in his home or in the case of motor,
an immobiliser or tracking system, insurance companies will usually give a
discount. They will normally require such systems to be approved by a
controlling body.
Brokers are intermediaries who 'shop around' on behalf of their clients,
usually in return for receiving commission from the insurer with whom they
place the business.
This is in fact the function being fulfilled by Direct Electronic but we
are utilising a computerised quotation system, supported by nearly all the big names including Commercial Union, General Accident, Guardian, Lloyds and Norwich Union.
In respect of all insurances there is an obligation on the policyholder to
inform the insurer of any material changes. A material change is one where
the insurance company would have been influenced in regard to its rates or
excesses had they been aware of the fact.
For example if motor insurance has a restriction that the driver is the
policyholder and his spouse (partner) only, and they now allow their teenage
son who has very little previous driving experience to drive, it is material, and the insurers should be told.
Similarly if a house is left unoccupied for more than 30 days it is usually
advisable to tell the insurer.
Previous claims may affect the rating. They must be fully disclosed.
Apart from 'All Risks' insurance (which is usually expensive), this is
normally the widest insurance available. It differs from 'All Risks' in
that it specifies the perils which are insured such as fire, explosion,
lightening, earthquake, storm, flood, riot, civil commotion etc. 'All Risks'
covers just about everything other than certain perils which are excluded. The "Standard" comprehensive cover can usually be extended for an additional premium to include "Accidental" damage.
Comprehensive Cover usually includes extensions such as loss of rent or
cost of alternative accommodation, breakage of glass as well as liability to
the public for any damages for which the policyholder may become liable for
bodily injury or loss of or damage to property belonging to others.
It is sometimes possible to obtain cover for fire and theft only which is
less expensive.
Contents cover is basically restricted to the premises insured although the
cover is often extended for a limited amount to hotel bedrooms or other
houses.
If cover is required simply for losing something, or where theft cannot be
proved (for example in regard to watches, cameras or jewellery) it is wise to take out separate
insurance for Personal Belongings.
Comprehensive motor insurance means that irrespective of whose fault an accident is, the policyholder's car is covered against damage (or replacement if the repairs are beyond a certain figure).
It also covers injury to passengers, injury to third parties (people
outside of the car or in other cars) and third party damage (damage to other
cars or property).
This compares with more restricted cover such as third party fire and theft
(often referred to as TPFT) or third party only (TP). In the latter the
damage to the policyholders own car is not covered but in the former fire
and theft is added. Restricting the cover obviously reduces the premium.
Most insurance companies require the policyholder to bear a specified first
amount of any loss. These are usually fairly nominal in normal cases -
around £50 - £100.
This does mean however that if the claim is for less than £50 or £100,
there will be no claim under the policy and if it is for £200 it will be
reduced by the above amounts.
Compulsory excesses are usually increased in respect of motor for persons
under 21 years or if the licence has been held for less than 1 year.
Buildings and contents excesses could be increased if, for example, a
building was in a subsidence area.
Both forms of insurance tend to have increased excesses if there have been
several claims.
Most insurance companies give discounts for voluntary excesses (an amount
agreed by the policyholder in addition to the compulsory excess) for
seniority, for security systems, immobilisers, trackers etc. Again for the latterit is
important that these are chosen from the list of suppliers approved by the
insurers.
Certain insurance companies give discounts where drivers are restricted to
a named female(s). This should therefore be advised to the insurer.
Many insurance companies provide a discount for mature drivers. You should
therefore advise your age.
Some insurers give reductions for persons who drive less than a stipulated
mileage per annum. It is therefore in the insured's interests to declare
the annual mileage.
Most insurers will allow monthly premium payments but it is important to
check the rate of interest (APR) charged.
In regard to motor insurance most insurers will replace the vehicle with a new one if it
is severely damaged or stolen within a fairly short period of its being
purchased. Thereafter they will replace it with an equivalent vehicle.
In regard to home and contents, new for old cover can be obtained from
certain insurers. Thus if carpets or curtains are destroyed by fire, the
insurer will pay for new replacements (assuming they cannot be repaired),
providing the sum insured is for the full replacement value.
In both motor, and home and contents, where new for old is not provided,
the guiding principle is that the policyholder is entitled to be put in the
same position after the loss as before it occurred.
Usually this applies to motor only although sometimes it is given for home
and contents cover. There are differing scales which increase over
different periods depending upon the insurer.
For example 30% in year one up to 70% in year 5.
In the event of one accident the discount is usually revised downwards but
following a further claim free year it will be increased again by one step.
This is available to motorists who have earned the
maximum level of discount. If it is taken (for an extra premium) the
discount described above is not lost in the event of an accident.
In the event of more than one accident there are various penalties
dependant upon the insurer concerned.
This can cause an increase in the rating. For example students and undergraduates. It is therefore important to note when a profession changes as this could result in substantial discounts.
See Comprehensive Home and Contents Cover above. An amount for wear and
tear will usually be deducted in respect of claims for clothes, furs and
household linen.
It is required by law that all owners of vehicles must insure against
injury to third parties. The policyholder therefore requires a certificate
of insurance. It is important therefore not to allow insurance to lapse.
See alarm systems.
Insuring a second car alongside with the first can result in reductions.
In regard to motor insurance the rating changes depending upon usage.
Private use is usually cheaper than business use. Nevertheless failure to
disclose business use could lead to difficulties with a claim.
Motor Insurance Quote
Home Owner’s Insurance Quote
Life Assurance Quote
Private Medical Insurance Quote
Back to the Direct Electronic Home Page
Send Queries to direct@londonmall.co.uk
Back to the London Mall
All information © Associated Electronic Communications Limited 1996. Design by LinE & DesigN. Please read Disclaimer.