Chapter 13~household And Buisness Insurance

Question 1

Difference between insurance and assurance

Answer 1

Insurance covers the risks that might or might not happen e.g car accident
Assurance refers to risks that will definitely happen e.g death

Question 2

Insurance?

Answer 2

A write promise by an insurance company to pay money to a person who has suffered a loss

Question 3

Insurance company?

Answer 3

A company which provides insurance for both households and businesses

Question 4

Insurance broker?

Answer 4

A person who works nor themselves and sells insurance for a number of different insurance companies. They offer advice and help you find the best policy.

Question 5

Proposal form?

Answer 5

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

Question 6

Premium?

Answer 6

The free paid for insurance e.g bill

Question 7

Insurance policy?

Answer 7

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

Question 8

Cover note?

Answer 8

A letter sent by the insurance Company to prove the insurance is in place

Question 9

Renewal notice?

Answer 9

A written reminder form the insurance company to remind u to pay you insurance in the next few weeks

Question 10

No Claims bonus?

Answer 10

If you have motor insurance and you do not have any accidents during the year you will receive a discount of 10% on your premium for the next year this is now as no claims bonus and it is our award for being a careful driver

Question 11

Non insurable risk?

Answer 11

Non insurable risks are those where the chances of a loss happening are impossible to estimate or where the loss Would be catastrophic. E.g The end of the world, Failure in examinations, war, acts of God, ect. None insurable risks for businesses are bankruptcy, stock becoming obsolete (out of date) bad management decisions

Question 12

Policy excess?

Answer 12

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

Question 13

Surrender value?

Answer 13

The value of a life assurance policy when it is turned into cash

Question 14

5 steps intaking out insurance

Answer 14

1. Calculate the value of the team you wish to insure
2. Contact the insurance company
3. Complete the insurance form
4. When the insurance company agrees to provide you with insurance you must pay the premium in full or instalments per year
5. With in a few weeks the insurance company will send the insurance policy and the certificate of insurance to the person who took out the insurance. Before it is sent , the insurance company may send you a cover note

Question 15

Types of household insurance

Answer 15

Life assurance: it’s insured person dies, company will pay a large sum of money to the person family

Question 16

Three types of motor insurance

Answer 16

• third party - required by law - only damage of car involved
• third party, fire and theft- -compensation if car stolen or damaged by fire
• comprehensive- everyone is compensated

Question 17

3 types of Personal insurance

Answer 17

• Heath insurance- hospital bills paid
• personal accident insurance
• PRSI(pay related social insurance) - everyone who works pays this incase of : unemployment , maternity leave, retirement.

Question 18

5 types of household insurance

Answer 18

1. life assurance
2. home insurance
3. motor insurance
4. personal insurance
5. travel insurance

Question 19

2 types of business insurance

Answer 19

1. Fire

2. accident

Question 20

2 types of different accident insurances for a business

Answer 20

Transit insurance- covers cash or Stock Stolen or damaged while being transported to and from the company’s premises

Fidelity guarantee insurance- The insurance company will pay the business owner money if one or more of the employees steals from the firm or does anything dishonest that causes them to lose money

Question 21

5 rules of insurance

Answer 21

1. Insurable interest
2. Utmost good faith
3. Indemnity
4. Subrogation
5. Contribution

Question 22

What is insurable interest?

Answer 22

You can only insure something if you have an interest in it i.e if the item is of importance to you

Question 23

What is utmost good faith?

Answer 23

You must answer all the questions on the proposal form truthfully and give any relevant information.

Question 24

What is indemnity?

Answer 24

You must not make a profit form the insurance.

Question 25

What is subrogation?

Answer 25

Once insurance company pays out compensation the insurance company become the owner of the item

Question 26

What is contribution?

Answer 26

If you have the same item insured with more then one insurance company and it gets damaged you will get paid once