Insurance Flashcards
Premium
Is the fee paid by the insured to the insurance company to cover a particular risk
Compensation
Is the payment made to an insured person if they suffer a loss or injury
Insurable interest
You must gain (financially) by its existence and
suffer (financially) by its loss
Indemnity
You cannot make a profit from a loss. The
compensation you receive will only be equal to the current value
of the item.
Subrogation
The insurance company has the right to seek
compensation from the party that caused the loss/damage and
take the damaged item for scrap value
Contribution
If you insure an item with more than one insurance
company, each insurance company will contribute/divide the
compensatio
Life assurance
is protection against a risk that will happen e.g. death
Whole life assurance
an agreed amount of money is paid to the person’s
dependants when the individual dies
Endowment assurance
an agreed amount of money is paid when the insured
reaches a certain age or on the death of the person – whichever comes first.
Term policy
An agreed amount is paid if you die within a certain period of time.
This might be appropriate if you want to protect your family while they are young.
Motor insurance
Motor Insurance is required by Law
Third party
provides compensation to owners of property damaged by your
car – it does not compensate for any damage to your car
Third party fire and theft
provides compensation to owners of property
damaged by your car – it does not compensate for any damage to your car.
Car is also covered in case of Fire or Stolen
Fully comprehensive
provides compensation to all injured parties by your
car AND also compensation for any damage to your car.
Due to extra cover – premium is more expensive
Home insurance
This covers the house building in the case of fire, storm or flood damage
