MODULE 1 GENERAL AND HOUSE CONTENTS - … STUDY SECTIONS GENERAL AND HOUSE CONTENTS MODULE INTRODUCTION Mr. X approaches you to insure the content of his house. He does enjoy cover

MODULE 1 GENERAL ANDHOUSE CONTENTS

Yes. It is a chair.And this is insurance.Simple, understandable, no-mystery insurance.

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Copyright ©Santam (Pty) Ltd. 2011 Course code: ASSESS-SPP2

CASE STUDYSECTIONS GENERAL AND HOUSE CONTENTS

MODULE INTRODUCTIONMr. X approaches you to insure the content of his house. He does enjoy cover for the content, provided by another insurer. Since it is the first time that he is applying for insurance from Santam, he wants to know more about the underwriting principles for the Santam’s personal policy.

It will also be expected of you to do an inspection/summary of the house and to make the necessary notes of your observations and to list it in the schedule as provided to you.

Lastly, it will be expected of you to complete the application form according to the information available to you.

The exposure you will get by completing this case study will provide you with the necessary knowledge and confidence for future situations in which you will receive similar requests.

MODULE OBJECTIVEThe goal of this module is to evaluate your knowledge of the following aspects with regard to Sections General and House Contents of the Santam’s personal policy:

• The answering of general underwriting questions with regard to the Santam’s personal policy;

• Risk evaluation with the necessary recommendations;

• The answering of general questions with regard to risks/insured items; and

• The completion of the application form for Sections General and House Contents of the Santam’s personal policy.

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TASK 1During your visit to Mr. X, he asked for clarification on the following aspects:

Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question.

QUESTION 1Mr. X wants to pay the premium of his Santam’s personal policy monthly and therefore wants to know if the premium has to be paid in advance or retrospectively.

1

QUESTION 2The company currently providing him with insurance grants him a rebate of 15% on his premium. That is because he had no claims for the past five years. Will he also qualify for a rebate with Santam?

2

QUESTION 3Mr. X wants to know if his premium will escalate with every claim handed in.

2

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QUESTION 4If he wanted to cancel his policy, how long in advance should he notify Santam?

1

QUESTION 5Mr. X wants to know if he should report all claims to the police.

2

QUESTION 6Mr. X keeps his garden tools in a timber shed in his yard. If this timber shed is burgled, will the tools be covered in terms of his policy or should he specifically mention the timber shed on his policy contract? (Timber shed not visible on the photographs.)

2

QUESTION 7Mr. X mentions that his oldest son, who lives in George, started to work at the bank about two years ago. At this stage he only has a car, clothes and a very expensive golf set. His son needs limited cover for his car and all risk cover for his clothing and golf set. Could Mr. X insure his son’s possessions under his policy? Explain comprehensively to Mr. X when such a request will be granted.

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Copyright © Santam Ltd. 2009 12 Course code: ASSESS-SPP2 / Module 1

Part (B)

CONTENTS INSURANCE (HOUSEHOLDERS):

Contents of private dwelling house/flat and domestic outbuilding situated at …………………………………….. ……………………………………………………………………………………………………………………………..……

Important: Articles specified under Part (A) (All risks insurance), must not be taken into account under this Part (B) 1. BEDROOMS Main Bedroom 2nd Bedroom 3rd

Bedroom 4th Bedroom Totals

Curtains R400 R500 R500 R R Loose carpets R600 R R500 R R Paintings & ornaments R1 000 R400 R500 R R Bed & mattress R3 400 R1 500 R1 500 R R Dressing-table R1 400 R400 R R R Bedside cabinets R R400 R R R Loose wardrobes R R R400 R R Chairs R500 R300 R300 R R Linen, blankets and bedding R2 000 R600 R600 R R Men’s clothing and footwear R5 000 R R R R Ladies clothing and footwear R8 000 R R R R Boys’ clothing and footwear R R R3 000 R R Girls’ clothing and footwear R R4 000 R R R Hairdryers R200 R400 R R R Electric hair curlers/rollers R R R R R Electric curling tongs/hot brush R400 R R R R Cosmetics R500 R400 R R R Electric Shaver R R R500 R R Cradle R R R R R Prams/push-carts R R R R R Infants’ clothing and footwear R R R R R Toys R R R R R

Totals (1) R R R R R 2. JEWELLERY/FURS 4. ENTRANCE HALL, PASSAGES

AND LINEN CUPBOARDS 5. LOUNGE AND FAMILY ROOM

Diamond rings R Curtains R2 000 Curtains R600 Costume rings R500 Loose carpets R1 000 Loose carpets R Bracelets R600 Paintings & ornaments R1 000 Paintings & ornaments R800 Necklaces R Telephone table R Reading Lamps R400 Earrings R400 Mirror R1 000 TV set (non-portable) R6 00 Watches R40 000 Wall clock R TV set (portable) R Silver/gold chains R60 000 Tables & chairs R4 000 Video machine & equipment R4 000 Furs R Bedspreads R TV cabinet R8 400

Totals (2) R Sheets R600 Display cabinet R Pillows R200 Lounge suite/s R4 000 3. BATHROOMS & TOILETS Pillow-cases R400 Coffee /tea-tables R 1 000 Curtains R400 Blankets R600 Other furniture R1 000 Loose carpets R400 Quilts R400 Piano R Toilet seats R400 Electric blankets R Organ R Toiletries R500 Totals (4) Other musical instruments R400 Towels R2 500 Hi-fi set R3 000 Bathroom scale R600 Records R

Totals (3) R Cassettes R CD’s R2 500 Totals (5) R

400

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Part (B) (Continued) 6. DINING ROOM 9. OUTSIDE ROOM/SERVANTS

QUARTERS: 12. SUNDRIES: (Articles not mentioned in preceding 1 to 11)

Curtains R800 Curtains R200 R Loose carpets R400 Loose carpets R300 R Paintings & ornaments R500 Bed & mattress R1 000 R Table & chairs R4 000 Linen, blankets & bedding R1 500 R Sideboard/dresser R Wardrobe & contents R1 400 R Hot tray(s) R Dressing table and

contents R400 R

Cutlery R400 Table & chairs R600 R Silverware R400 Totals (9) R R Dinner-service R400 R Glassware R400 10. GARAGE/WORKROOM R

Totals (6) Power-tools R4 000 R Hand-tools R800 R 7. STUDY Lathe R R R Curtains R Work-bench and vice R500 R Loose carpets R Welding machine R R Paintings & ornaments R Lawnmower R2 400 R Reading lamps R Trimmer/edger R700 R Desk & chairs R Other gardening

implements R400 R

Bookcase R800 Gardening tools R400 R Books R2 000 Garden furniture R2 000 R Pocket calculating machine R Braai equipment R1 000 R Typewriter R Bicycles R30 000 R Sport equipment R400 Camping equipment R500 R Cameras and projectors R1 400 Totals (10) R R Binoculars R400 R Fire-arms R 11. OTHER CONTENTS R Ammunition R Bar counter and stools R R

Totals (7) Wine & liquor R1 200 R Sewing machine R R 8. KITCHEN & LAUNDRY R R Curtains R400 Portable radio/cassette

players R4 000 SUMMARY OF TOTALS

Stove R3 000 Suit/brief cases R2 000 ALL BEDROOMS (1) R Microwave oven R1 400 Pot plants R500 JEWELLERY/FURS (2) R Refrigerator(s) R2 400 Computer R44 000 BATHROOMS & TOILETS

(3) R

Contents of refrigerator R500 Fax machine R ENTRANCE HALL, PASSAGES AND LINEN CUPBOARDS (4)

R

Deep-freezer(s) R1 600 Video camera R4 000 LOUNGE AND FAMILY ROOM (5)

R

Contents of deep-freezer R1 000 Telephone answering machine

R DINING ROOM (6) R

Dishwasher R4 000 Collections of any descriptions except stamp and coin collections which are not insurable under Section 1

STUDY (7) R

Washing machine R2 000 Please describe below: KITCHEN & LAUNDRY (8) R Tumble dryer R800 R8 000 OUTSIDE

ROOM/SERVANTS QUARTERS (9)

R

Vacuum cleaner R400 R GARAGE/WORKROOM (10)

R

Polisher R R OTHER CONTENTS (11) R Carpet cleaner R R SUNDRIES (12) Iron & ironing board R300 R Sub-total R Other Electrical appliances R2 000 R Add an amount for possible

future purchases R

Tables & chairs R R Add an amount for expected inflation

R

Ornaments R400 R Tea and coffee sets R1 000 R Cutlery & crockery R1 000 R Groceries R2 000 R Laundry R500 R

Totals (8) R Totals (11) R GRAND TOTAL R

Cell phone

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QUESTION 8Mr. X also wants to know whether the sums insured in terms of Sections House Contents and Buildings of his policy will be adjusted automatically by Santam to provide for inflation or whether it is his responsibility to adjust it.

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QUESTION 9Some of the jewellery he bought on hire purchase for his wife is, in terms of the jeweller’s agreement with them, insured separately with XYZ Insurers. Mr. X is quite sceptical about the cover XYZ Insurers offers and is planning to insure the jewellery also in terms of the Santam’s personal policy. He wants to know what will happen in the event of a claim. How will he be indemnified?

1

QUESTION 10Mr. X obviously wants the maximum rebate on the premium of his policy. He wants to know in terms of which sections of the policy he will benefit by Santam’s no-claim bonus system.

SECTION NO-CLAIM BONUS

House Contents

All Risks

Buildings

Vehicles

Water craft

Personal Legal Liability

6

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QUESTION 11a. Describe what you will do if Mr. X indicated on his application form that he has had no claims for a certain period

with his current and/or previous insurer.

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b. Describe what you will do if Mr. X provides you with a schedule of his current insurer as proof of his claim-free status:

• With the schedule dating back to a month ago.

1

• With the schedule dating back to nine months ago.

1

c. Describe what you will do if Mr. X provides you with a sworn affidavit as proof of his claim-free status.

1

TOTAL 26

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TASK 2Study photographs 17, 22 to 34, 44, 45 and 47 on the CD, along with the site layout. List your observations and recommendations. (Your observations should be objective and stated in such a way that the assessor can determine during evaluation whether you are able to identify certain aspects with regard to the risk and could make the necessary recommendations.)

Observations

Recommendations

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SITE LAYOUT OF DWELLING

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TASK 3 Questions will follow after the completed inventory.

Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question.


Task 3 Questions will follow after the completed inventory. Motivate your answers with the relevant facts throughout to qualify for the maximum allocation of marks as indicated per question. INVENTORY Full name: ……Mr X……………………....……….… Postal address: …N.A..……….…..………….……... ………………………………………..…………..……… Policy number Use this inventory to evaluate existing and New insurance. Kindly mark the applicable square with an “X” Please adjust my insurance in accordance I have made an evaluation, but do With these replacement values not require any adjustment

Part (A) ALL RISKS INSURANCE: Valuable articles Please specify valuable articles eg. television sets, fur, jewellery, paintings, cameras, projectors, fire-arms, et cetera (excluding household

furnishings), which exceed R1000 in value. Kindly attach revised valuation certificates, or receipts, et cetera in respect of these articles. An evaluation by a member of the Jewellery Council of South Africa is recommended in respect of jewellery. Important: Articles specified below, must not be taken into account under Part (B) [Contents insurance (Householders)] Michel Herbalin Ladies watch R 8 000,00 Rolex men’s watch R 25 000,00 Diamond Necklace R 30 000,00 5 Gold bangles R 25 000,00 Tissot ladie’s watch R 6 000,00 Wilsons golf set R 20 000,00

Above mentioned jewellery was only listed here due to its high value. The insured also owns other cheaper jewellery included in the amounts as indicated on the inventory.

See the task to determine where/how it should be insured.

TOTAL

The Householders section and All risks section of the Multiple will compensate you at replacement value provided your sum insured was determined at replacement value. Use this inventory to determine the value, room by room and item total. At today’s prices, your household goods and personal effects are worth a fortune. By using this inventory, it is truly in your own interest to ensure that you are insured at current new prices. Otherwise it is not possible to replace articles claimed for at “new for old prices”

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QUESTION 1a. Mr. X wants to know which of the items on the inventory he should specify separately.

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b. Does a limit apply to jewellery, and if it does, how much will the limit be in terms of Section House Contents when the jewellery weren’t specified?

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QUESTION 2The sums on the inventory indicate the replacement values of the various items. He is going to insure the contents of his house with Santam. What percentage for depreciation should he subtract from the value of the following items?

Each answer is 0,5 marks.

Electrical equipment _________________%

Clothing _________________%

Furniture _________________%

Carpets _________________%

2

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SANTAM’S PERSONAL POLICY APPLICATION FORM

Thank you for considering Santam as your insurer. Please complete and sign the application. Make sure that all questions are answered completely. Cover in terms of the policy will only commence after the official approval of your application by Santam Limited. Details of “applicant” and “other insured’s” Applicant Other Insured 1 Other Insured 2

Surname: ……………………….………… ………………………………… ……..………………………

Initials: …………………………….…… ………………………………… ……..………………………

Date of birth: 15 January1953……………………....… ………………………………… ……..………………………

Gender:

ID Number:

Language of correspondence

Title (eg. Mr, Dr) …………Mr……………… ………………………………… ……..………………………

Marital Status …Married………………… ………………………………… ……..……………………… (eg. married or widow) Occupation …Estate Agent

& Developer……

…………………………………

……..………………………

Further Details of applicant

Telephone no. Work: Code

Fax number: Cell phone no:

Postal Address: ……………P.O. Box 1……………………………… Email address: ………[email protected]………………………

…………Cape Town……………………………… Postal Code: ……………8001…………………………

Street Address: …1 First Avenue, La Rochelle,. Cape Town………

(if different from postal address) …………………………………………………… Postal Code: ……………………………………………… Policy Details For use by Broker/agent

Policy code: Agent number:

Inception date: Name of Agency:…....……..

………………………………………………

Choice of payment: Handling Fee: R ……………………………………………

Telephone no. …………………………………………..

Do you require SASRIA (riot) cover? Fax Number …………………………………………..

5 3 0 1 1 5 0 0 0 1 0 0 0

021 915-7000 083 000 0000

D D M M 2 0

PLEASE PRINT ALL ANSWERS TO QUESTIONS OR MARK THE APPLICABLE BLOCK

THESE SECTIONS ARE FOR OFFICE USE ONLY

Male Female Male Female Male Female

English Afrikaans English Afrikaans English Afrikaans

House: Code

Debit order

Cash

Yes No


Monthly Debit Order collection date

On, or last working day before ………

On, or first working day after ………..

Two working days after ………………

Please note that for this option, collection will take place on the last working day before this date in the event of this date falling on a weekend or public holiday.

29th 30th 31st 1st

25th 26th 27th 28th

15th

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Banking Details

Branch code/ Reference number: Account No: Account Holder: ………………………………………… Institution/Bank: ………………………………………………………………..

Type of Account:

Authorisation by Account Holder

Santam Limited (Santam) may deduct the amount of the premium from my account at the aforementioned institution in any

way that Santam and the institution have agreed upon. Santam may pay any amount that is owed to me, into the same

account.

Any deductions from my account by Santam will be seen as if these had been signed by me.

Without my written consent, Santam may not cede it’s right in respect of this authorisation to a third party.

……………Mr X………………………….. SIGNATURE OF ACCOUNT HOLDER

General Has an insurer ever refused any proposal of yours, cancelled any policy (or section thereof), refused to renew any policy (or

section thereof) or imposed any special conditions? Cross the appropriate block.

If “Yes” supply full details …………………………………………………………………………………………

…………………………………………………………………………………………………………………………………………………………… Are you currently insured against the risks you are applying for now? Cross the appropriate block

If “Yes” supply the name of the insurer …………A.B.C. Insurers………………………………………….

If you are currently not insured but were previously, please provide the following:

Last date of insurance: ………NA…………………………….. Name of Insure: ……………………………………………………………

Please supply full details of all losses you have experienced during the last 3 years, including claims that have been paid or

not been paid.

Type of Loss Year Amount Insurer

……Main dwelling…………….. …1990…………….. R10 000,00………………… ABC Insurers……………………..

……Main dwelling………….... …1993…………….. R50 000,00………………… ABC Insurers……………………..

……Apartment……………….. …2001…………….. R12 000,00………………… ABC Insurers……………………..

…………………………………….. …………………….. ……………………………… ………………………………………..

Tick the insurance sections which you require:

Part 1 Part 2 Part 3

House Contents Personal legal liability Personal accident

All risks Death Death benefit plan

Buildings Hospital benefi t plan

Vehicles Extended personal legal liability

Water craft Legal coste and legal expenses

Current Transmission Credit Card

Yes No

Yes No

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PART 1 – PROPERTY INSURANCE HOUSE OF CONTENTS

Details of contents House contents 1 House contents 2

Type of residence

Street address of property ………………………..………..

……………………………………………..……….. ....………………………….…………………………………

………………………………………………..….. ………………………….……….…………....………….......

Postal Code …………………………. ……………………………

Above ground floor?

Burglary & theft cover excluded? Vacant area in immediate Surroundings of residence? Number of burglaries at residence (last 3 years) No claim bonus (in years) Excess Construction of roof Construction of walls Type of dwelling

Type of residence Type of residence (e.g. Flat on ground, townhouse Or double storey) ……………………………………….. ……………………………………………… Sum insured of contents Residence/landslip Accidental damage – General Mechanical/electrical/electronic Breakdown Stock-in-trade Type of home industry (e.g. bakery) …………………………………………………………………. ……………………………………………………… Does the residence have the following? Burglar bars in front of all Windows that open? (including louvers) Security gates in front of all external doors? (including sliding doors) Intercom – if linked to a 24 hour Control room i.e. security firm Security Area Neighbourhood code …………………………………………………….. …………………………………………………… Endorsements ……………………………………………………. …………………………………………………… Premium ……………………………………………………. ……………………………………………………

Main residence Holiday home Other residence Main residence Holiday home Other residence

1 2 3 4 More than 4

1 2 3 4 More than 4

0 1 2 3 4 5 6 7 0 1 2 3 4 5 6 7

Standard Non-standard Thatch Thatch with thatchsyf

Standard Non-standard Thatch Thatch with thatchsyf

Standard Non-standard Standard Non-standard

Smallholding Farm Other Smallholding Farm Other

Standard Commune Hotel Standard Commune Hotel

Boarding House

Guest House

Old age home Boarding House

Guest House

Old age home

R R

Yes No Yes No

Yes No Yes No

Yes No Yes No

Yes No Amount: R Yes No Amount: R

Yes No Yes No


Yes No Yes No


Yes No Yes No

Yes No Yes No

Yes No Yes No

Yes No Yes No

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QUESTION 3Some of the glass ornaments were bought in various African countries. Is it possible to provide cover for these items against breakage specifically, and if so, explain whether any exceptions apply?

2

QUESTION 4 Mr. X is worried that his items are under-insured and that average in terms of Section House Contents will be applied. Explain to him how average works (including the calculation to determine the percentage of under-insurance) and tell him what he should do to avoid the application of average.

3

QUESTION 5 As displayed on the photographs, he installed an alarm system in his house. Is this type of system acceptable, and if it is, will he qualify for a rebate if the alarm system is not a requirement?

2

QUESTION 6The wife of Mr. X sells Persian carpets and ornaments. This business is run from their home. Mr. X converted his double garage specifically for the storage of the carpets. No carpets are sold from home. His wife takes samples to potential buyers. If they are interested, she delivers the purchases herself. The average stock that she keeps amounts to R30 000. Mr. X wants to know if these carpets and ornaments in stock will be covered in terms of the Santam’s personal policy, and if it is covered, does a limit apply in this instance.

2

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QUESTION 7The house of Mr. X is situated on a hill. He is worried, in the light of the changes in weather, that heavy rains will wash away the soil around his house and that it could lead to the subsidence or landslip of his house. This could in the process damage his house contents.

Is this type of incident automatically covered in terms of Section House Contents, and if it is not, what should he do to acquire this type of cover?

2

QUESTION 8 The youngest son of Mr. X is at college and is living in a boarding house. (See attached photograph of the boarding house. Study the photographs 60,62,63 and 64 on the CD for more information.) His clothing and personal possessions which he usually keeps at the boarding house, amount to R15 000. Answer the following questions:

a. Will his possessions be covered in terms of the Santam’s personal policy of Mr. X?

b. Should the boarding house be mentioned on the policy as a second address?

c. Which security measures apply to this address?

6

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QUESTION 9Mr. X travels often and prefers to stay over in a guesthouse. He wants to know if his clothing and personal possessions will be covered in terms of Section House Contents:

a. If the guesthouse was burgled.

b. If his possessions were stolen by one of the employees of the guesthouse.

c. And/or does he have to specifically extend his policy to enjoy cover in these instances.

3

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QUESTION 10Mr. X rents an apartment in Johannesburg. He uses it twice a month when he is in the city for business. The apartment he is renting is on the seventh floor of the apartment block.

He decides to move to a larger apartment on the first floor of the apartment block. He wants to know what the impact on the cover will be if the contents of the apartment are also to be insured in terms of Section House Contents?

Study the following photographs available on the CD and describe in your opinion the underwriting measures that apply to this new risk. Currently, the only requirement is that a security gate should protect the entrance door of the apartment.

2

TOTAL 33

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TASK 4The insured gives you the following information:

A completed inventory of the contents of his permanent dwelling.

Bank details

• XYZ Bank

• Account holder: Mr. X

• Account number: 00010001 (Current account)

• Branch code: 11 22 33

• Debit order advance: Last working day before the 30th of each month.

Complete Section General and Section House Contents on the application form according to the above-mentioned information. Some of the information has already been completed on the application form. Remember to clearly indicate on the application form any of your requirements following on the inspection you have done.

The insured needs the following cover:

• Cover for the contents of his house: (see inventory)

• Cover for the contents of his apartment in Johannesburg: R50 000 702 Park Apartments Park Street Johannesburg

• Accidental damage to the contents of his house: R 5 000

• Stock in trade (Persian carpets and ornaments): R10 000

The insured has no need for any optional excess over and above the normal excess that applies.

The insured is not interested in cover for Subsidence and landslip due to the high premium.

The insured asked for electronic and mechanical breakdown cover for the following computers:

• Acer computer Hard drive Veriton 3200 (serial number: 10002000) R6 000 Screen AC713 (serial number: 10002999) R2 000 Keyboard 6511 (serial number: 33344455) R1 000

• Acer computer Hard drive Veriton 3600 (serial number: 20002000) R7 000 Screen AC713 (serial number: 10002998) R2 000 Keyboard 6511 (serial number: 33344456) R1 000

• Acer Travelmate 180 laptop (serial number: 445566) R10 000

• Acer Travelmate 280 laptop (serial number: 445566) R15 000

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SUMMARYFollowing on the information available to you with regard to this section(s):

• How will you classify the insured and risks? 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

Documents

MODULE 1 GENERAL AND HOUSE CONTENTS - … STUDY SECTIONS GENERAL AND HOUSE CONTENTS MODULE INTRODUCTION Mr. X approaches you to insure the content of his house. He does enjoy cover