Insurance Flashcards
(21 cards)
What are some insurance companies in Trinidad and Tobago?
ALGICO, Guardian Life, SAGICO, TATIL, Maritime
These companies provide various insurance products and services.
What is insurance?
An Aid-to-Trade/Service Industry that spreads the cost of large losses over many individuals to reduce individual costs.
What is the need for insurance?
Provides protection against loss by paying compensation in modern economies.
How does insurance work?
Based on the ‘Pooling of Risks’ where premiums from many individuals are used to pay for losses of the few.
What is a premium in insurance?
A small amount of money contributed by individuals toward the insurance pool.
What is the ‘Probability of Loss’?
The estimation of how likely it is that a business place will be damaged.
What are insurable risks?
Risks that can be insured against and have calculable probabilities, e.g. fire, flood, burglary.
What are non-insurable risks?
Risks that cannot be insured against, such as losses due to poor management.
How are premiums related to risk?
Higher risk results in higher premiums; lower risk results in lower premiums.
What is the difference between assurance and insurance?
Insurance is based on uncertain events, while assurance is based on certain events like death.
Who are the parties to an insurance contract?
Insured, Insurer, and a third party.
What is the principle of ‘Utmost Good Faith’?
Both parties must disclose all relevant facts; failure to do so can invalidate the contract.
What is ‘Insurable Interest’?
The insured must have a financial interest in what is insured.
What does the principle of ‘Indemnity’ aim for?
To compensate the insured to restore them to their pre-loss position.
What is ‘Subrogation’?
The insurance company’s right to take over the insured’s legal rights against third parties.
What does ‘Proximate Cause’ mean in insurance?
A claim will be paid only if the loss was a direct result of the insured risk.
What is the principle of ‘Contribution’?
If a risk is insured with multiple companies, the loss is shared among them.
How does insurance contribute to the development of business?
By providing protection against risks, allowing business growth and focusing on operations.
What role do insurance companies play in investment?
They collect premiums and invest in stocks and shares, providing capital for industry.
What protection does insurance provide for individuals?
Protects against risks in life, including fire, theft, and accidents.
How does insurance contribute to economic development?
By creating jobs and reducing unemployment, thereby increasing living standards.
