Date post: | 06-May-2015 |
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Insurance
Ms. Tiernan
Ms. Tiernan
Insurance
“Insurance is a service people can purchase that compensates them for a financial loss” (www.skoool.ie)
Ms. Tiernan
The person who wants to be insured pays a premiumPremium will be higher if loadings are added e.g.
if you were in a 2 crashes last year the risk of it happening again will be higher)
Premium will be lower if deductions are applied e.g. if you travel less than 15,000 km per year there’s less chance of you crashing
In return the insurance company promises to pay compensation if a financial loss occurs
Ms. Tiernan
Risks
Risks are insurable when:Person taking out insurance gains financially from its existence & suffers from its lossThe loss is accidentalThere are a large number of similar risks being insured againstPossible loss is not so large as to ruin the insurance company
Ms. Tiernan
Forms
Proposal Form – Completed when taking out insuranceSample Proposal Form
Claims Form – Completed when making a claim for compensationSample Claim Form
Ms. Tiernan
Ms. Tiernan
Ms. Tiernan
Principles of Insurance
3 main principles govern insurance
Insurable Interest
Utmost Good Faith
Indemnity
Ms. Tiernan
Insurable Interest – Person who wants to take out insurance must gain financially from existence of what's being insured and suffer from its loss
Ms. Tiernan
Utmost Good Faith – Person applying for insurance must truthfully answer all the questions
Failure can result in insurance being worthless
Ms. Tiernan
Indemnity – The insured person cannot make a profit from insurance – Two sub-principles:
Principal of Contribution – If same risk insured by two or more insurance companies compensation is shared between them
Principal of Subrogation – Once insurance company pays out compensation it becomes the owner of the item insured
Note: Underinsurance e.g. if you insure your house for €100,000 but it was actually worth €150,000 you will only receive the €100,000 if it’s burned down
Ms. Tiernan
Types of Insurance taken out by households
Personal Insurance
House Insurance
Life Assurance
Motor Insurance e.g. Third Party
Comprehensive
Ms. Tiernan
Types of Insurance taken out by businesses
Fire Insurance
Employers’ Liability Insurance
Product Liability Insurance
Burglary Insurance
Ms. Tiernan
Types of Insurance taken out by businesses continued
Public Liability
Motor Insurance
Glass & Business Signs Insurance
E-commerce Insurance
Ms. Tiernan
Insurance People
Actuary – Calculates the insurance premium
Assessor – Calculates compensation to be paid
Ms. Tiernan
Practice calculating insurance premiums!