Types of Insurance
What is home insurance?
Covers damage to your home and belongings.
What is a premium?
The amount you pay each month or year for cover.
What is insurable interest?
You must have a financial connection to what you insure.
Who is an actuary?
Works out insurance risk using maths and statistics.
Claim = €2,000
Excess = €500
How much does the insurer pay?
€1500
What is Motor/Car Insurance?
Required by law to drive legally in most countries.
What is an excess?
The amount you must pay towards a claim.
What is utmost good faith?
Both parties must disclose all relevant information honestly.
Who is an insurance broker?
Represents clients and finds insurance from different companies.
Premium = €600
No-claims bonus = 10%
New premium?
€540
What is travel insurance?
Covers medical expenses when travelling abroad.
What is a policy limit (sum insured)?
The maximum amount an insurer will pay.
What is indemnity?
Insurance should restore you to your original position, not allow profit.
Who is an underwriter?
Assesses whether to accept or reject insurance applications.
Two policies:
Policy A covers 60%
Policy B covers 40%
Claim = €10,000
How much does Policy A pay?
€6000
What is term insurance?
Pays out when a person dies during a fixed period.
What is subrogation?
The right of an insurer to recover money from a third party.
What is risk pooling?
Spreading risk across many policyholders.
Who is a claims handler?
Investigates and processes claims.
Claim = €20000
Excess = €5000
How much does the insurer pay?
€15000
What is public liability insurance?
Covers a business against claims made by customers.
What is contribution?
When two insurers share the cost of a claim.
What is assurance?
A life policy pays out because death is certain to occur.
Who is an insurance agent?
Sells policies on behalf of one insurance company.
Two policies:
Policy A covers 60%
Policy B covers 40%
Claim = €100,000
How much does Policy B pay?
€40,000