LEARNER’S STUDY GUIDE

Demonstrate knowledge and skill in order to assess a fire or accident claim

(14974)

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Unit Standard SAQA 14974 – Demonstrate knowledge and skill in order to assess a fire or accident claim

Contents
Instructions to the learner / 2
UNIT 1
Prepare to conduct an assessment (SO1) / 7
UNIT 2
Investigate the merits of a claim (SO2) / 13
UNIT 3
Make a decision to settle a claim (SO3) / 23
UNIT 4
Conclude a settlement with a client (SO4) / 30
Answers to self-tests / 36
Addendum 1 / 38
Addendum 2 / 41


Instructions to the learner

Introduction
Welcome / Welcome to the learning intervention that deals with the knowledge and skills in order to assess a fire or accident claim.
This learning intervention forms part of a Level 4 skills programme (Demonstrate knowledge and skill in order to assess a fire or accident claim), which enables you to meet the minimum requirements to be “fit and proper” in terms of the FAIS legislation.
Purpose of this learning intervention / This learning intervention will provide you with the knowledge and skills to provide insurance solutions by acquiring knowledge and skills in order to assess a fire or accident claim.
Overall outcome / By the end of this learning intervention, you will be capable of
·  preparing to conduct an assessment,
·  investigating the merits of a claim,
·  making a decision to settle a claim, and
·  Concluding a settlement with a client.
Target audience / This learning intervention is intended for claims assessors, negotiators, and other learners who assess the damage in a fire or accident claim.
Delivery medium / This training will take place in the form of self-study. In other words, you are required to work through this self-study guide and complete the activities included. The activities are comprehensive, practical, and experiential in nature. They are based on “real work” where learners work with real workplace scenarios and case studies.
Prerequisites / Learning assumed to be in place:
·  You should be competent in Communication, Mathematical Literacy, and Financial Literacy at NQF Level 3.
Learner’s roles and responsibilities / You are required to do the following:
·  Work through this self-study guide.
·  Complete activities.
·  Ask for guidance and support when required.
·  Complete the assessment.
Introduction to this self-study guide / Demonstrating knowledge and skill in order to assess a fire or accident claim is the central theme of this training and is discussed in detail in this self-study guide.
This guide makes use of icons to guide you in your learning process. Below is a description of these icons:
Icon / Meaning / Icon / Meaning
/ Self-tests and activities / / Assignments and assessments
/ Study / / Outcomes
/ Read
Action verbs / This guide uses action verbs in its learning outcomes. Action verbs tell you what you must DO.
Action verb / Explanation
Analyse / Separate, order, explain, connect, classify, arrange, divide, compare, select, explain, infer
Apply / Make use of relevant rules; put into practice
Compare / Examine in order to note the similarities and/or differences
Compile / Collect information, assemble, gather, list
Complete / Use information, apply, use methods, concepts, theories, solve a problem using required skills
Decide / Compare and discriminate between ideas, assess value, make choices, verify value, assess, grade, measure, recommend, convince, select, judge
Demonstrate / Show or prove by reasoning
Establish / Find, institute, create
Gather / Collect information, assemble, gather, list
Indicate / Show by using examples
Name / List, define, tell, show, label, collect, tabulate, who, when, where
Make / Create, design, compose, formulate, prepare, use related knowledge to make
Present / Impart, portray, stage, explain, infer
Quantify / To determine or express the quantity of
Use / Use information to apply, demonstrate, complete, illustrate, show, solve, relate, change, classify, discover, etc.
The diagram below illustrates the broad process to follow when assessing a fire or accident claim and will also illustrate how the self-study guide is structured.

Unit standards / The overall outcomes and specific outcomes of this learning intervention are aligned with registered Unit Standard 14974.
This means that if you are able to demonstrate competence in the learning outcomes, which are aligned to the specific outcomes of the unit standard, you will qualify for credits, which will contribute towards the 120 credits required for a national certificate at Level4.
If you are unable to demonstrate competence, you will not obtain any credits for the unit standard.
This learning intervention is aligned to the following unit standard as illustrated in the table below:
Unit standard title / Unit standard number / NQF level / Number of credits
Demonstrate knowledge and skill in order to assess a fire or accident claim / 14974 / 4 / 3
This means a total of three credits towards a national certificate.
How is this course made up? / This course has four units. Each unit corresponds to a specific outcome (SO) as indicated in the SAQA documentation (Addendum 2). Each unit has a number of sub-units. These sub-units correspond to the assessment criteria (AC) as indicated in the SAQA documentation.
Note: SO1AC1 refers to Specific Outcome 1, Assessment Criterion 1.
Assessment / In order to obtain the three credits for Unit Standard 14974, you must provide evidence of your competence after working through this self-study guide.
Providing evidence of your competence will occur during the assessment process. The laid-down policies, procedures, and related issues regarding assessments will be explained to you before the assessment takes place. You will also be given an overview of, or instructions on how, the assessment will take place, what evidence you must produce, how you must prepare yourself, etc.
A qualified assessor or your line manager will guide and support you throughout this process.
Our wish to you / Everything of the best in your studies. Enjoy every moment that you spend studying. It is time well spent in making sure of your future.

UNIT 1

Prepare to conduct an assessment (SO1)


Specific outcomes for this unit
/ After completing this unit, you should be able to do the following:
·  Analyse information relating to the client in order to compile a profile (AC1.1).
·  Analyse the schedule cover to establish the cover in terms of the policy (AC1.2).
·  Analyse a claim’s history for information relevant to the current claim and risk management requirements (AC1.3).
/ Study the material for each sub-unit before moving on to the activities.
1.1 / Information relating to the client is analysed in order to compile a profile (AC1.1)
A profile / A profile is an outline of the subject matter. So the profile of a client is an outline of what the client is all about. In terms of the Financial Intelligence Centre Act (FICA) 38 of 2001, all financial service providers must have on record details about their clients.
Once a client has indicated that he/she could have suffered a claim in terms of his/her short-term insurances, it is vital that the claim administrator prepare a profile of the client before any assessment is undertaken. This is required in order to have the basic information regarding the client at hand.
Profile for a client’s business / A profile of a client’s business would include the following:
·  Full name of the client or the company
·  Physical address
·  Contact details, including name, telephone number, e-mail, and facsimile number of the contact person at the business
·  VAT status of the client, that is, vendor or non-vendor, and VAT number
·  Name of insurance company and branch office
·  Insurance policy number
·  Client’s insurance broker and details
·  What insurances the client has
·  Previous claims experience
·  Any other information that may be useful
Profile for a private individual claim / If you are to assess a claim for a private individual, the profile would be similar:
·  Full name of the client
·  ID number
·  Bank branch and account number
·  Physical address
·  Contact details, including telephone number, e-mail, and facsimile number
·  Name of insurance company and branch office
·  Insurance policy number
·  Client’s insurance broker and details
·  What insurances the client has
·  Previous claims experience
·  Any other information that may be useful
Templates / It is suggested that you create templates, such as the following, customised to the needs of your organisation. Subject to obtaining the necessary authority, access the information available, and complete the template as far as is possible.
Example of an assessment template for a possible business claim / Business claim assessment form
Profile of client’s business
Name of client’s business:
Physical address:
Contact person:
Telephone number:
Cell number:
E-mail address:
Facsimile number:
VAT status of the client – vendor or non-vendor – and VAT number:
Bank and account numbers:
Example of an assessment template for a possible personal lines claim / Personal lines claim assessment form
Client profile
Name of client:
ID number:
Physical address:
Telephone number:
Mobile number:
E-mail address:
Facsimile number:
Bank and account numbers:
1.2 / The schedule of cover is analysed to establish the cover in terms of the policy (AC1.2)
Legal document / Policies are legal documents comprising the following parts:
·  Wording
·  Endorsement and amendments
·  Schedule
Policy wording / These parts must be read together.
Printed wording
The printed wording contains the following parts, which likewise must be read together as one document:
·  Preamble clause: this states the benefit basis of the policy following the payment of the premium. This will be explained in greater depth in Assessment Criterion 3.2.
·  General conditions: the insurance company sets out the requirements with which the insured (your client) must comply and the actions allowed by the insurance company to settle any claim. Failure to comply with the general conditions can make the policy void (of no effect), allowing the insurance company to refuse to settle any claim.
·  General exceptions: these are circumstances under which the insurance company states it will not settle any claim.
·  Specific exceptions: these are circumstances or events that are not covered in any particular section of the policy.
·  Operative clause: this clause sets out the actual insurance cover purchased and the defined events that must happen to allow the insured (your client) to seek a claim settlement.
·  Defined event: this is the actual event that causes the loss or damage.
Endorsements and amendments / These are sections of wording that change the printed wording or amend the printed wording, depending on the circumstances. An example could be an endorsement that changes a claim limit stated in the printed wording, such as increasing the limit relative to covering the replacement of lost keys from R1000 to R2 000. Endorsements are also issued, amending the schedule, such as increasing the value insured. When reading a policy, you must also read any endorsement to note what changes have been made to the policy.
Schedule (or specification) / The schedule of the policy will provide information regarding the name or title of the insured (your client), the period of insurance, the territorial limits (countries where the insurance operates), the property insured, defined events, first amounts payable (sometimes known as the excess), and any specific conditions (which could be titled as a warranty) that are not negotiable and must be complied with in full.
A fire policy schedule usually states buildings, machinery, stock, and other items insured and the values concerned.
In South Africa, insurance companies issue policies either designed by them, such as personal lines documents, or the industry’s Multimark III™ business policy wording.
Personal lines policies / Personal lines, or domestic policies, as they are otherwise known, also contain a variety of insurance classes in one policy, suitable for the private individual. Typically, a personal lines policy can include home owners (residential buildings), householders (contents of residential premises), all risks (both a general item for wearing apparel and personal effects and specified items for things such as cameras), personal computers, personal liability, personal accident, motor vehicles, motorcycles, caravans, trailers, pleasure craft, and, in some cases, emergency rescue services and appliance warranties (household appliance maintenance and breakdown cover).
Multimark III™ policies / These are composite or multi-risk policies to insure small to medium-size businesses. With this one policy, the client can obtain most of the classes of insurance required for his/her business enterprise.
The fire and accident classes of insurance on the Multimark™ policy, which are the subject of this unit standard, include fire, building combined, office contents, theft, money, fidelity guarantee (employee dishonesty), glass, business all risks, accidental damage, and electronic equipment (such as telephone switchboards, facsimile machines, and computers). It should be noted that there are other classes of insurance available on the Multimark™ policy that are beyond the scope of this course.
The schedule of a Multimark III™ policy is made up of a general schedule first, followed by individual section specifications for each class of insurance taken by the insured.

Sample schedules / See the sample of a Multimark III™ General Schedule and Fire Section Specification and a sample of a personal lines schedule in Addendum 1 on p. 37.
1.3 / A claim’s history is analysed for information relevant to the current claim and risk management requirements (AC1.3)
Reported loss / Once the insured (client) has reported a loss, establish as much information as possible as to what defined event may have caused the loss or damage. In this way, you hope to establish the policy and section that could respond to the loss. You also need some estimate as to the value of the loss. Once this is known, extract information of the client’s previous claims history. By studying the pattern of previous losses, you should be able to ascertain whether the circumstances of the reported loss could be a persistent problem. This will indicate whether the insured has taken reasonable precautions to prevent a reoccurrence of such loss or damage. This is a general condition of the policy and will indicate whether the insured is conducting any risk management or loss control measures.
Broker’s records / You need to secure information about all previous losses reported. This information should be available from the insurance broker’s records or the insurance company. The information is likely to be presented on a spreadsheet indicating the type of insurance, date of loss, details of loss, gross amount of loss, date paid, and amount.
Claims administration / Loss reports immediately incur a claims administration expense. The details must be lodged onto a system, a file opened, a claims assessor appointed, and the details input into a financial record system for the insurance company to reserve sufficient money possibly to pay the claim amount. Frequent small losses may indicate a need to raise the level of the first amounts payable, since the costs of handling claims could exceed the amounts being claimed. From a risk management perspective, self-funding by the client (by increasing the value of the first amount payable) in respect of smaller losses is a far more efficient way of financing risk.
Insurance companies will naturally include provision for all the smaller anticipated losses into their premium for the next year. This is sometimes referred to as “rand swapping”. For every rand paid out by an insurance company, the insured could expect to pay at least R1.45 in premium at next renewal.
Policy assistance / An insured must not use an insurance policy to compensate himself/herself for events that he/she should have tried to prevent. An insurance policy is there to assist the insured should all his/her loss prevention measures fail, resulting in a loss he/she tried to prevent. Should an insured have suffered a similar loss in the past, you must establish what measures the insured has taken to prevent the reported loss.
Historic claims / From an analysis of the historic claims record, you are better armed to investigate the loss reported, since repeated losses usually have similar circumstances.

Self-test 1 / 1.  Why is it important to prepare a client profile before visiting a client who has reported a loss?
2.  What is a schedule or specification of cover about?
3.  What benefit is there to having the claim record on file?
Competency check / Competency / Check / SO1
I can analyse information relating to the client in order to compile a profile. / c / AC1.1
I can analyse the schedule cover to establish the cover in terms of the policy. / c / AC1.2
I can analyse a claim’s history for information relevant to the current claim and risk management requirements. / c / AC1.3

UNIT 2

Investigate the merits of a claim (SO2)