Page 46 - Personal Underwriting Mandates & Guidelines - Binder product rules & addendums - Version 1

Balance of Third Party, Fire and The Bene ciary
Blanket Policy
Broker
Burglary
the terms used in South Africa for the form of motor insurance which covers the Insured's liability for:
(i) injury to passengers not covered in terms of the Road Accident Act 1996; and
(ii) damage to the property of third par es caused by the vehicle.
This type of policy provides a limited extent of cover to owners of motor vehicles. The balance of Third Party risk is covered, as well as loss or damage from the perils of Fire and The .
a policy covering several items under one Sum Insured.
an insurance broker is usually an agent of the Insured. A Broker advises the Insured on ma ers of insurance, and acts on behalf of the Insured in nego a ons and purchase of insurance cover. The Broker is usually remunerated by the Insurer by payment of commissions, however Brokers charge clients handling/ service fees on a policy as well. Brokers may be responsible to clients for errors or omissions that prejudice the client's interests.
a term (without legal meaning in South Africa) is o en used to describe the accompanied by forced and violent entry into or exit from a building.
Terminology
Automa c Increase Margin
an automa c increase of the Sums Insured buildings and contents by a percentage commensurate with the prevailing in a on index. This does not a ect the applica on of average and the Insured's duty to ensure that the Sums Insured are adequate.
Average
a condi on or clause in a policy which s pulates that if the Sum Insured is less than the value of the property insured, the policyholder will be his own insurer for the di erence and will carry a propor onate share of the loss.
Example: Contents of a house are insured for R100 000. The actual replacement cost of the contents is R200 000. If the contents were damaged by an insured peril to the value of R50 000 the claims se lement would be calculated as follows:
Value at Risk R Sum Insured R Amount of loss R
200 000 100 000 50 000
Sum Insured
Amount Payable = Value at risk X Amount of loss
R100 000 X R50 000 = R25 000 The amount payable. R200 000
Average is applied for three main reasons:
(i) To avoid underinsurance.
(ii) To obtain a full premium for the risk the Insurer is carrying.
(iii) To ensure that each party bears a fair share of each loss.
in general insurance, this is a policy provision which has the e ect of reducing a claim payment where under-insurance is discovered.
Be erment
the value of the improvement in an insured property when it has been repaired or rebuilt following loss or damage.
Bordereaux
the sheets of informa on prepared by an Insurer detailing cessions under reinsurance trea es.
Brokerage
the commission or fee paid to the Brokers by the Insurers for placing business with them.
Burning Costs
method of calcula ng the insurance premium (especially in reinsurance) taking account of previous claims.
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Binder Claims Mandates and Guidelines – 2015/2016