Household Insurance. Distinguish between Insurance Protection against a loss you hope will not...
-
Upload
baldwin-brooks -
Category
Documents
-
view
221 -
download
1
Transcript of Household Insurance. Distinguish between Insurance Protection against a loss you hope will not...
![Page 1: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/1.jpg)
Household Insurance
![Page 2: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/2.jpg)
Distinguish between Insurance Protection against
a loss you hope will not happen.
Eg. car accident.
Assurance Protection against
a loss you know will happen.
Eg. death.
![Page 3: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/3.jpg)
Two reasons for adequate insurance You must cover all possible risks. Eg. In household insurance: fire,
theft, flood and accidental damage.
You must insure enough to cover full amount of loss.
Eg. If your house is worth €200,00 you must insure it for that value.
![Page 4: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/4.jpg)
The basis for insurance is sharing the risk.
Large number of
small premiumsInsurance pool/fund
Ins. co. expenses
Ins. co. profit
Compensation
![Page 5: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/5.jpg)
Distinguish between Insurable risk Things that can
be insured. Eg. Houshold
insurance; fire theft, damage.
Personal accident for a farmer.
Non-insurable risk Things that cannot
be insured against. Eg. Damage to car
used in crash testing.
Personal accident for a bungee jumper.
![Page 6: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/6.jpg)
Insurance Terms Exclusion Clause: Situations that cannot be insured. Eg. Household insurance: A house situated near a river that
is known to flood every year.
![Page 7: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/7.jpg)
Insurance Terms Policy Excess/Excess Clause:
The insured person may have to pay the first €100 of the compensation themselves.
This is to reduce the number of small claims being made.
To make people more careful.
![Page 8: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/8.jpg)
Insurance Terms Proximate Cause:
What is the exact cause of the loss.
Eg. was it fire or theft or flood? ie. what actually happened? This helps the insurer decide if
compensation is due.
![Page 9: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/9.jpg)
Insurance Terms Compensation:
Is the money you get when you make a claim.
![Page 10: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/10.jpg)
Principles of insurance Insurable Interest Utmost Good Faith Indemnity Contribution Subrogation
![Page 11: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/11.jpg)
Insurable Interest In order to insure something you
must benefit from its existence & suffer from its loss.
Eg. You can insure your own house but you cannot insure your neighbours’s house.
![Page 12: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/12.jpg)
Utmost Good Faith You must tell all relevant
information when filling out an application for insurance.
Eg. If you have an illness you must tell the ins. co. as they may want to charge a higher premium or not insure you at all.
![Page 13: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/13.jpg)
Indemnity You cannot make a profit from
insurance.
There is no point in insuring your house for more than it is worth as the ins. co. will only compensate you for the actual value of the house.
![Page 14: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/14.jpg)
Contribution If a risk is insured with two
insurance companies each will pay half of the compensation.
Eg: A ring insured with two ins. co.’s. for €1,000
Both will give ?? €500 each.
![Page 15: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/15.jpg)
Subrogation Passes the legal right of the
insured over to the insurer to claim from a third party who caused the loss.
Eg. Whirlpool oven causes house to go on fire. Ins. co. pays compensation to insured and then seeks their own compensation from whirlpool.
![Page 16: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/16.jpg)
Average Clause Related to underinsurance and partial
loss.
If you only insure an item for a fraction of the value, you only get the same fraction compensation.
![Page 17: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/17.jpg)
Formula
SUM INSURED x CLAIM = COMPENSATION
ACTUAL VALUE
![Page 18: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/18.jpg)
EXAMPLE 1. Mary insured her house for
€200,000. The market value is €250,000. A fire causes €10,000 worth of
damage. How much compensation will she
receive???
![Page 19: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/19.jpg)
Solution 1
200,000 x 10,000 = 8,000 250,000
![Page 20: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/20.jpg)
Documents used in insurance
Proposal Form
Application form for insurance
![Page 21: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/21.jpg)
Policy
Contract of insurance Gives full details of cover Must be filled away safely
![Page 22: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/22.jpg)
Cover Note
Temporary policy Used in car insurance, while
you are waiting for insuracne disc
![Page 23: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/23.jpg)
Certificate of Insurance
Proof of insurance
![Page 24: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/24.jpg)
Claim Form
Form you fill out when a loss occurrs and you want compensation
![Page 25: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/25.jpg)
People in insurance Broker
Gives advice on insurance Sells insurance on behalf of
lots of companies. Eg:
![Page 26: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/26.jpg)
Agent
Sell insurance for only one co.
Eg: FBD, Quinn Direct……..
![Page 27: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/27.jpg)
Actuary
Calculates insurance premiums
![Page 28: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/28.jpg)
Loss Adjuster
Calculates the value of the loss
Works for the insurance co.
![Page 29: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/29.jpg)
Loss Assessor
Calculates the value of the loss
Represents the insured
![Page 30: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/30.jpg)
Steps involved in taking out insurance
1. Decide what risks you want covered. (ask a broker)
2. Fill out proposal form. (ugf)
3. Pay your premium.
4. File your policy in a safe place.
![Page 31: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/31.jpg)
Steps involved in making a claim.
1. Contact guards & ins. co.
2. Obtain estimates of lost/stolen items.
3. Fill out claim form. (ugf)
4. Talk to assessor and agree on compenstaion.
![Page 32: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/32.jpg)
Terms relating to premium calculation
![Page 33: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/33.jpg)
Premium The cost of insurance Money you pay to be
insured The higher the risk the
higher the premium
![Page 34: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/34.jpg)
Risk Effect Things that cause premiums to
be high or low
Eg: In car insurance No car accidents = lower
premium Under 25 male = higher
premium
![Page 35: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/35.jpg)
Loading Extra premium for higher
risk
Eg: A smoker will have a higher premium for life assurance than a non smoker
![Page 36: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/36.jpg)
Discount Money taken off premium
for a lower risk
Eg: In house insurance you get a discount for having an alarm
![Page 37: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/37.jpg)
No Claims Bonus In car insurance you get a
discount if you do not claim for any accidents the previous year
It encourages people not to claim for small amounts
![Page 38: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/38.jpg)
Renewal Date The date you must have
your premium paid by.
Eg : 1/10/08
![Page 39: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/39.jpg)
Days of Grace You may be given a few
extra days to pay your premium
Not allowed in motor insurance
![Page 40: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/40.jpg)
Premium Calculation Questions
![Page 41: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/41.jpg)
Types of Personal Insurance
![Page 42: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/42.jpg)
PRSI Pay Related Social Insurance.
Statutory Deduction from you salary.
You will receive an income if you are out of work due to illness, disabiity, maternity leave…
![Page 43: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/43.jpg)
Medical Insurance In case you get sick or need
an operation
Eg: VHI Voluntary Health Insurance
![Page 44: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/44.jpg)
Personal Accident Covers people who are
injured due to an accident.
Lump sum payment for loss of finger, sight, hearing etc.
![Page 45: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/45.jpg)
Salary Protection Provides an income in case
you can’t work due to illness.
Will provide you with a higher income than PRSI only.
![Page 46: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/46.jpg)
Pension Plan
Provides you with lump sum and income for your retirement.
![Page 47: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/47.jpg)
Holiday Insurance Provides you with health
care if you get sick on holidays.
![Page 48: Household Insurance. Distinguish between Insurance Protection against a loss you hope will not happen. Eg. car accident. Assurance Protection against.](https://reader035.fdocuments.us/reader035/viewer/2022062308/56649d125503460f949e5c13/html5/thumbnails/48.jpg)
Risk Effects for Personal Insurance
Loading Older, smoker, risky job
Discount Younger, non-smoker, low risk job