Chapter 13 - Household And Business Insurance☀️

Question 1

What is assurance?

Answer 1

Assurance refers to risks that will definitely happened e.g. Death

Question 2

What is an insurance company?

Answer 2

A company which provides insurance for both households and businesses.

Question 3

What is a proposal form?

Answer 3

An application for insurance.

Question 4

What is a premium?

Answer 4

The fee paid for insurance.

Question 5

What is an insurance policy?

Answer 5

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

Question 6

What is a no claims bonus?

Answer 6

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

Question 7

What is a non insurable risk?

Answer 7

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. End of the world, bankruptcy.

Question 8

What is policy excess?

Answer 8

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 9

What are the steps in taking out insurance?

Answer 9

1. Calculate the value of the item you are insuring
2. Contact an insurance company or an insurance broker
3. Complete the proposal form
4. When the insurer agrees to provide insurance, pay the instalments!
5. The company will send the policy and certificate to the insured. Before it is sent, they will send the insured a cover note.

Question 10

What is life insurance?

Answer 10

If insured person dies the company will pay money to their family. Types include: Endowment Insurance (can cash in policy) and Whole Life Policy (pays for whole life).

Question 11

What is Home Insurance?

Answer 11

• Consists of buildings and contents insurance
• Premium depends on value of house and contents
• Discount ordered to homes protected by burglar alarms, smoke alarms, window locks, neighbourhood watch schemes.

Question 12

What is Motor Insurance?

Answer 12

1. Third Party: Required by law, if you have an accident the company will only pay for damage to the other car involved.
2. Fire & Theft: You get compensation if your car is stolen or damaged by fire
3. Comprehensive: Everyone involved is compensated for damage and injuries including person responsible

Question 13

What is PRSI?

Answer 13

Everyone who works and receives an income must, by law, pay PRSI.

Question 14

Name a type of business insurance.

Answer 14

Accident e.g. Transit Insurance (cash or stock stolen when transported), Fidelity Guarantee Insurance (when an employee steals).

Question 15

What are the rules of insurance?

Answer 15

1. Insurable Interest
2. Utmost Good Faith
3. Indemnity
4. Subrogation
5. Contribution

Question 16

What is insurable interest?

Answer 16

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 lost or stolen.

Question 17

What is Upmost Good Faith?

Answer 17

Where 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.

Question 18

What is indemnity?

Answer 18

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.

Question 19

What is subrogation?

Answer 19

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

Question 20

What is contribution?

Answer 20

If you have the same item insured with more then one insurance company and it get 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.

Question 21

What is insurance?

Answer 21

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