Insurance Chapter 13 Flashcards Preview

Business 2nd Year > Insurance Chapter 13 > Flashcards

Flashcards in Insurance Chapter 13 Deck (23):
1

What is a proposal form

The application form for insurance. It is a list of questions about the person taking out the insurance and the object they want to insure.

2

What is a premium

The fee paid for insurance.

3

What is Insurance policy

A written document from the insurance company and contains all the details about the insurance contract.

4

What is no claims bonus

If you have motor insurance and you don't have any accidents during the year, you will receive a discount of 10% on your premium for the next year. This is known as a no claims bonus and is a reward for being a careful driver.

5

What is policy excess

The amount if the loss you have to pay yourself when a claim is made. The insurance company will not pay the total amount of the loss.

6

What is insurance

A written promise by an Insurance company to pay money to a person who has suffered a loss

7

What are the types of household insurance

Home insurance

Motor insurance

8

Explain home insurance

Consists of buildings insurance and contents insurance

Premiums depends on value of house and contents

Discount will be offered to homes protected by burglar, alarms smoke alarms, window locks and neighbourhood watch schemes.

9

Explain motor insurance

(i) Third party (required by law )
🔹if you have an accident the insurance company will only pay for the damage to the other car involved.

(ii) Third party fire and theft
🔹You will get comprehensive if your car was stolen or damaged by fire.

(iii) Comprehensive
🔹 Everyone involved in the accident is compensated for their injuries and for damage to their cars including the person responsible for causing the accident.

10

What are the rules of insurance

1) Insurable interest
2) Utmost Good Faith
3) Indemnity
4) Subrogation
5) Contribution

11

Explain Insurable interest

You can only insure something if you have an interest in the item i.e you benefit from having the item and it would cost you money to replace it if it was stolen or damaged.

12

Explain Up Most Good Faith

When a person is taking out insurance they must answer all questions on the proposal form truthfully and give the insurance company any relevant information about themselves and the item they want to insure. All material facts must be disclosed.

13

Explain Indemnity

You must not make a profit from insurance. You should end up in the same financial position after the loss or damage as you were in before the loss or damage occurred.

14

Explain Subrogation

Once an insurance company pays out compensation the insurance company becomes the owner of the item insured.

15

Explain Contribution

If you have the same item insured with more than one insurance company and it gets stolen or damaged, you will only get paid once. Each of the insurance companies will pay part of the compensation depending on how much was insured with them.

16

Explain home insurance

Consists of buildings insurance and contents insurance

Premiums depends on value of house and contents

Discount will be offered to homes protected by burglar, alarms smoke alarms, window locks and neighbourhood watch schemes.

17

Explain motor insurance

(i) Third party (required by law )
🔹if you have an accident the insurance company will only pay for the damage to the other car involved.

(ii) Third party fire and theft
🔹You will get comprehensive if your car was stolen or damaged by fire.

(iii) Comprehensive
🔹 Everyone involved in the accident is compensated for their injuries and for damage to their cars including the person responsible for causing the accident.

18

What are the rules of insurance

1) Insurable interest
2) Utmost Good Faith
3) Indemnity
4) Subrogation
5) Contribution

19

Explain Insurable interest

You can only insure something if you have an interest in the item i.e you benefit from having the item and it would cost you money to replace it if it was stolen or damaged.

20

Explain Up Most Good Faith

When a person is taking out insurance they must answer all questions on the proposal form truthfully and give the insurance company any relevant information about themselves and the item they want to insure. All material facts must be disclosed.

21

Explain Indemnity

You must not make a profit from insurance. You should end up in the same financial position after the loss or damage as you were in before the loss or damage occurred.

22

Explain Subrogation

Once an insurance company pays out compensation the insurance company becomes the owner of the item insured.

23

Explain Contribution

If you have the same item insured with more than one insurance company and it gets stolen or damaged, you will only get paid once. Each of the insurance companies will pay part of the compensation depending on how much was insured with them.