Business: Insurance Flashcards
(19 cards)
What is insurance?
Insurance offers protection against financial loss and tries to put the person back in the same financial position they were in before the loss occurred.
What is insurable interest?
To insure something, you must benefit from its existence and suffer (financially) from its loss.
What is utmost good faith?
You must answer all questions truthfully and reveal all relevant information when completing a proposal form (application) or a claim form (for compensation).
What is indemnity?
The insured person must not profit from insurance.
What is subrogation?
Once an insurance company has paid compensation for any insured item, the right of ownership of that item passes to the insurance company, which is allowed to sue any third party responsible for the loss to recover any compensation paid.
What is contribution in insurance?
Where the same risk is insured by more than one insurer, they will divide the cost of the claim between them.
What are the types of car insurance?
Third party, Third party, fire and theft, Comprehensive.
What is a no-claims bonus?
A discount that makes next year’s premium cheaper.
What is loading in insurance?
An extra amount added on the premium to cover an increased risk.
What is compensation in insurance?
A financial payment made to an insured person if they suffer an insured loss.
What is an insurance policy?
Sets out details of the types of losses covered and the amount of compensation to be paid.
What does an insurance broker do?
A broker helps people to get the insurance that best fits their needs and their budget.
What is an agent in insurance?
Sells policies on behalf of only one insurance company.
What is the role of an actuary?
Employed by an insurance company to decide on the premium that should be charged.
What does an assessor do?
An assessor will investigate a claim for compensation and decide whether the claim is covered by the insurance policy.
What are exclusions in insurance?
Specific items or risks that are not insured.
What is policy excess?
The amount the insured person must pay for any loss or damage to the insured item.
What is the average clause?
Applies in the case of underinsurance and partial loss, based on the principle of indemnity.
What does underinsurance mean?
Means that the insured item has not been insured for its full replacement value.
