You are a claims handler for an insurer specialising in household insurance. One of the policyholders has
home insurance, which includes buildings and contents cover. When the insurance policy was incepted the
policyholder confirmed the property was their permanent residence.
The policyholder notifies you of a claim for water damage to the property and personal possessions. Whilst
investigating the claim, you discover the following:
• The policyholder rents out the property on short-term lets, during which they temporarily vacate the
property. However, the policyholder has never informed the insurer of this.
• The personal possessions are owned by a guest who had rented the property for the weekend.
• The policyholder has received a criminal conviction for burglary, although this conviction occurred after the
inception of the policy.
(a) Discuss the possible effects of the short-term lets on the policyholder’s claim for the property
damage. Refer to one statute in support of your discussion. (14)
(b) Explain, with justification, whether the claim for the personal possessions will be settled. (6)
(c) Discuss the effect on both the policy and the claim of the policyholder failing to inform the insurer
of the criminal conviction.
