General Insurance Advice
Jump to Exclusions
Why should I insure?
Insurance is a mechanism which transfers risk from one party to another in exchange for financial compensation (premium).
Some of the most common reasons for purchasing an insurance product are:
- The person seeking insurance cannot afford to incur a loss relating to the item they are looking to insure
- It is required by law i.e. compulsory insurance for vehicles
KBIS recommend that you consider insuring any risk you are exposed to which could affect you physically or financially.
What should I consider?
When looking to purchase insurance the most important question to ask is whether the policy is appropriate to your needs, taking out the incorrect insurance could be likened to having no insurance at all.
You also need to consider if the insurance is required by law or statute, the following acts may affect yourself as a rider or your business and would therefore require you to have the appropriate insurance:
- Employers Liability Act 1969
- Riding Establishment Act 1964
- Road Traffic Act 1988
When taking out insurance you will most likely be asked a number of questions to enable the insurers to assess the risk prior to agreeing cover. It is your duty to ensure that you answer all questions honestly and reasonably. If you fail to tell your insurer something when asked or deliberately make misrepresentations when answering questions your policy may leave you with no insurance protection.
The Insurance Act 2015, which came into affect in August 2016, also has a significant impact on the operation of your insurance policy, including your disclosure obligations towards an insurer. The Act applies to all non-consumer insurance policies and we have detailed further information about the reforms and their importance in the following document: Client Information – The Insurance Act 2015.
Who can I approach?
When looking to take out an insurance policy you can either choose to approach an insurance company direct or you can ask an intermediary, more commonly known as a broker, to act on your behalf.
The Insurer or Broker must be authorised and regulated by the Financial Conduct Authority (FCA) who regulate by means of a range of strict rules and principals. You can find out if a company is registered by the FCA by visiting www.fca.org.uk/register/. A broker may also be regulated by the Prudential Regulation Authority (PRA).
The Financial Ombudsman Service (FOS) also has an important role in that it serves to mediate between an Insurer or Broker and a consumer who feels that their complaint has not been appropriately resolved. You can find out more about the FOS by visiting www.financial-ombudsman.org.uk
What service will I receive?
Most firms provide one of two types of service; an advised or non-advised sale.
An advised sale means that the customer will receive a personalised recommendation about the suitability of a product based on the individual’s unique demands and needs.
A non-advised sale entails providing the customer with enough information so that they can make a reasonably informed decision about the suitability of an insurance product.
Generally speaking, most general insurance sales are non-advised however if you employ the services of an insurance broker you are more likely to be offered an advised sale.
How do I choose which insurance company to use?
When choosing which company to use there are some simple questions you can consider:
- Have you heard of the company before?
- How long has the company been trading?
- Are they registered with the FCA (Financial Conduct Authority)?
- Are the staff knowledgeable and friendly?
- Do they offer flexible cover options?
- Have they gained a good reputation for paying claims?
- Do they offer additional cover such as horseboxes, liability & property that you may wish to look at taking out in the future?
One of the best indicators is often to ask around and see what companies other people would recommend.
What will I pay?
When you take out an insurance policy you will pay what is referred to as a ‘premium’. This will vary depending on the type and level of cover selected. A high level of cover may result in a higher premium. You will normally have two payment options offered to you; payment in full by credit/debit card, or the option to pay monthly by Direct Debit. If opting for the latter there may be an additional charge by the provider of which you would be notified.
What do I do if I need to claim?
Insurance companies have their own claims procedure and this will be set out in your policy terms and conditions. As soon as you think you might have to make a claim on your policy you should contact your insurance company to make them aware of the incident. They will usually send you a claim form to complete. Depending on the policy it may require part of the form to filled out by another party, for example in the case of a vet fee claim the attending vet will be required to fill out part of the form
When submitting your claim form you may be asked to forward any receipts/invoices in relation to the claim, together with any photographs of the damage.
In the case of a complex claim, the insurance company may appoint a Loss Adjuster, an independent claims specialist, to establish the cause of the loss.
You can view the KBIS Claims Procedure here.
Can I cancel my insurance cover?
The terms of cancellation will vary between insurance policies as well as between insurance companies. If you choose to cancel your insurance prior to the expiration date of the policy the insurer may keep a percentage of the unearned premium (UEP) in order to cover costs incurred, this is referred to as short rate cancellation.
You may be able to cancel your policy on a pro rata basis, though there may be an administration charge incurred. A full refund may be offered on a policy if you cancel within the first 14 days.
In the event that a claim has been paid out on the policy then there will be no return in the premium.
You should always refer to the policy wordings for full cancellation details of the product you are looking to purchase.
How long does my insurance cover run for?
It is common practice for insurance policies, such as horse insurance, to run on a 12-month contract. At the end of this 12 month period, you will normally be offered the chance to renew your policy. This renewal will take into account any changes in the insured’s position and you will be asked to complete a set of questions to ascertain whether there have been any changes in circumstances, and or incidents, during the previous policy period that may affect the covered offered. The insurer is not obliged to offer the renewal of the policy and neither is the policyholder obliged to accept the renewal policy.
Some policies may run for a longer period, for example, KBIS provide 15 months vet fee cover contracts under our Competition policy. You can also obtain shorter contracts in relation to a specific time frame, for example, event insurance, or cover for a horse in transit which normally runs 24 hours before and after the specified journey.
What do I do if I am unhappy with my insurance company?
If you are unhappy with your insurance cover or feel that you have been misled, then you should contact the company who sold you the policy directly. They will try to resolve the problem. They should acknowledge your complaint and send you a copy of their complaints procedure. They should also set out a time frame in which you can expect to hear back from them regarding the complaint.
If the company is unable to resolve your complaint to your satisfaction and you want to take it further then your will be directed to the Financial Ombudsman Service (FOS).
Glossary of Terms
Certificate
The certificate of insurance details the spesific insurance cover the policyholder has agreed to take out. In addition to the cover purchased, any additional terms imposed by the insurer will be shown here. These could be exclusions or conditions that the policyholder must comply with to ensure that their insurance remains valid.
The certificate of insurance is normally issued once the premium has been received (or monthly payments set up) and is issued with the terms and conditions of the policy.
Co-insurance
An arrangement by which the insurer and the insured share, in a specified ratio, payment of losses covered by the policy after the excess has been paid. Sometimes also referred to as a co-payment.
Excess
This indicates the amount of any claim that you will have to cover before the insurer will start to pay. For example if the value of your claim was £750 and your excess is £100 – you will pay the first £100 and the insurer will pay the difference, up to the sum insured, in this instance £650.
The excess amount will often affect the premium, a higher excess will often mean a lower premium as the insurance company decreases the potential payout in a claim.
Exclusions
Noted conditions or risks that are not covered under the policy.
Extension Periods
Apply to expired policies when cover is extended beyond the expiry date of the policy, normally 12 months from the date of the onset of a condition.
Financial Conduct Authority (FCA)
Regulates the general insurance industry and authorises individual companies allowing them to sell insurance products. You can check on the regulation of a company by visiting the FCA’s website www.fca.org.uk or by contacting the FCA on 0800 111 6768.
Financial Ombudsman Service
The organisation that handles complaints by policyholders against insurance providers.
Inception Date
This is the start date of the policy.
Insurance Agent
An intermediary who has a contract to sell and administer policies on behalf of the insurer.
Insurance Broker
An Intermediary who acts on behalf of the client.
Limit of Indemnity
Refers to the insurer’s maximum liability in respect of any one event or series of events i.e. the total amount to which you are covered up to. In some cases you will be offered a choice to the limit of indemnity and in other instances it will be fixed.
Market Value
The price at which the insured item would change ownership between a willing seller and a willing buyer, with both parties having reasonable knowledge of the facts.
Period Of Insurance
The period of time covered by the policy as shown on the insurance certificate and policy documents for which the insurer agrees to insure you, normally this is 12 months.
Pre-existing Conditions
Those conditions that manifested before the inception date and are therefore not covered by the insurance.
Premium
The amount payable by the insured to the insurer for the agreed cover, either a one off payment at the start of the policy or by monthly instalments.
Proposal Form
The basis of the contract between the insured and insurer. The insurer will ask questions in relation to the ‘risk’ to which the insured must answer fully and honestly. Failure to do so may void the cover in the event of a claim.
Renewal
The point at which the insurer invites the policyholder to reinsure for a further year. Normally terms will be issued at least 6 weeks prior to your renewal date and will stipulate the terms of the new policy.
Settlement
The payout received by the policyholder at the resolution of a claim and in line with the terms and conditions of the policy.
Underwriter or the insurer
A Lloyd’s syndicate, insurance company or mutual insurer who accepts the risk that the insurance policy covers in return for payment of the premium. The underwriter/ insurer sets the rates and determines the terms and conditions of the policy.
Exclusions
Exclusions are noted conditions or risks that are not covered under your Insurance Policy.
General Exclusions
All insurance policies carry general exclusions, that is areas or circumstances when the policyholder is not covered. General exclusions will be stated in the terms and conditions of your insurance policy. You will normally find that there are general policy exclusions, relating to the policy as a whole, as well as exclusions applicable to certain sections of the policy. For instance, on an equine policy general exclusions may be listed under such sections as vets fee, personal accident and public liability cover.
It is therefore important to read your terms and conditions carefully when you receive them with your certificate of insurance and if you have any queries on any aspect of the cover to contact us.
Specific Exclusions
Specific exclusions are ones that apply to an individual policy. On an equine policy they can be in reference to an illness, injury or disease, which occurs or was diagnosed before the policy was taken out – a pre-existing condition. It could also be in relation to a noted condition or conformational fault that may pre dispose a horse to a specific condition, illness or injury.
At KBIS we will list any specific exclusions clearly on your certificate of insurance. Unlike general exclusions, specific exclusions can be re viewed and depending on the type of injury or illness may be removed after a certain period of time. We are always happy to discuss any specific exclusions on your policy and you can find out more about our exclusion review procedure here – KBIS Exclusion Review Procedure
Below are some commonly asked questions relating to specific exclusions
Will I have an exclusion placed on my policy if I make a claim?
Generally if you make a claim that condition will then be excluded in the next policy period, as in most cases it will mean that the horse will be pre disposed to that illness or injury again.
Depending on the condition the exclusion may be very specific to that individual circumstance or it may be more generic if it is viewed by professionals as being likely to predispose the horse to other related injuries or illnesses.
Although you will have an exclusion for the condition placed on a new policy i.e. at renewal, it is important to remember that your 12 or 15 months, depending on the policy you have, cover for that condition starts from the onset date of the injury or illness so you could still have cover in place for the condition under your old policy.
For example if your horse sustains an injury to its stifle on the 1st May 2015, on a 12 month policy you will be able to claim for any ongoing treatment up until the 30th April 2016. If your policy falls for renewal on the 1st August 2015 your new insurance policy for that horse will list a specific exclusion relating to the stifle injury but you will be still be covered for the injury under your old policy up until the 30th April 2016.
The reason the exclusion has to be placed on your policy at renewal and not at the end of the cover period is to avoid dual liability (a term which means that the insurers are liable for the same ‘loss’ under two or more policies)
Does my exclusion related just to my vet fee cover?
A specific exclusion relates to all sections of cover you have taken out. For instance if your horse has had colic and you claimed for treatment under the vets fee cover you had in place, any subsequent exclusion placed on your policy relating to colic would apply to your vets fee cover and your mortality cover. It would also relate to loss of use cover if you had this in place.
How long will the exclusion be in place?
This is dependent upon the severity of the condition, the chance of re occurrence and whether it will then pre dispose the horse/pony to the condition or a related condition in the future.
Some conditions are very unlikely to be removed such as a tendon injury while in other cases we may review an exclusion after a certain time frame or at the next renewal. You can read about our exclusion review procedure here – KBIS Exclusion Review Procedure.
Why is my exclusion very broad?
If the exclusion placed on your policy is very broad/non specific it is usually because we have not received enough information to allow us to apply a more appropriate exclusion. If this is the case supplying the onset date, the nature of the problem and any treatment your horse has received so far will help us to adjust the exclusion.