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Chapter 09
Insurance
| Question | Answer |
|---|---|
| Insurance def | Financial protection against possible loss |
| Insurance policy def | Sets out details of types of losses covered and amount of compensation paid |
| Compensation def | Financial payment made to insured person if they suffer an insured loss |
| Premium def | Amount paid by insured person |
| 5 principles of insurance | Insurable interest Utmost good faith Indemnity Subrogation Contribution |
| Third party motor insurance covers… | Injury to another person or damage to their property, not policy holder or their vehicle |
| Third party, fire and theft motor insurance covers… | Same as third party plus compensation for insured person if vehicle is stolen or catches fire |
| Comprehensive motor insurance covers… | Benefits all parties and vehicles |
| No claims bonus def | Discount on insurance premium for making no claims on policy |
| Loading def | Extra amount to basic premium to cover increased risk |
| 3 types of insurance (not motor) | Home insurance (buildings cover) Home insurance (contents cover) Health insurance |
| 3 types of life assurance | Whole life policy: pays compensation on death of insured person Term policy: outstanding payments (eg mortgage) is paid off Endowment policy: pays fixed amount on specific date |
| Insurance broker def | Helps people get insurance best suited for their needs and budget |
| Agent def | Sells policies on behalf of one insurance company |
| Actuary def | Employed by insurance company to decide on a premium that should be charged |
| Loss adjuster def | Investigates claim for compensation and decides if claim is covered by insurance policy |
| Proposal form def | Application form for insurance |
| Policy excess def | Amount insured person must pay for loss/damage to insured item |
| Exclusions def | Specific items not insured |
| Average clause def | Applies in case of under insurance or partial loss |
| Underinsurance def | Insured item is not fully insured |
| Renewal notice def | Notice sent by insurers to renew policy |
| Uninsurable def | Ineligible for insurance |
| 2 benefits of insurance | Protect income Replace/repair damaged items |
Created by:
TomDel123
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