Chapter 6- Personal Insurance Flashcards
What is insurance?
Insurance is a way of protecting yourself from the costs that may rise from damage to your property or your health.It is a way of transferring risk
RISK OF FINANCIAL LOSS.
What are assets ?
Assets are something of money value
Info on insurance
If your assets are damaged destroyed or stolen you may not be able to afford to repair or replace them,
If you pay a fee (is a small proportion of the price of the asset) to insure them,then an insurance company agrees to pay the costs of such losses or accidents.This fee is known as a premium.
Shop around
You may either years and insurance broker who will source an insurance company for you at a fee or speak to the insurance companies direct.
However you can only insure something if you benefit financially from having it and suffer financially if you lose it.
Insurance company ( insurer) HOW THEY MAKE MONEY.
Money in
Premiums ( fee paid to the insurer)
Profits from investing
Money out
Compensations (amount to be paid in the event of a loss)
Running the business (taxation,marketing,wages)
Investing
Types of insurance
The competition and consumer protection commission (CCPC) publishes a range of guides that explain how different types insurance work.
- Motor Insurance
- Home Insurance
- Health Insurance
- Life Insurance
Motor car insurance
Motor car insurance is compulsory by law.
Car Insurance may be the 1st type of insurance that you will need.
Types of motor car insurance
- COMPREHENSIVE
- THIRD PARTY
- THIRD PARTY,FIRE AND THEFT
Comprehensive insurance
Comprehensive car insurance is the most common and the most expensive car insurance. It covers you for loss,theft or damage to your vehicle. It also covers you for accidental damage to another vehicle or to property. Without this cover, you will be responsible for paying for the damage to your own car and to others if you cause an accident.
Third-party
Third-party car insurance is a cheaper option. It covers you for damage to another persons vehicle or property, but not for the damage to your own car.
Third-party fire and theft
Third-party fire and theft covers the risk of your car being destroyed by fire or being stolen
Setting the premium
The factors that insurance companies use to determine what premium will be charged for a car insurance include age, occupation, address, type of car, driving experience and qualifications and any previous claims.
You cannot really change these factors except perhaps the type of car you drive or hope to drive. When buying a car, remember that insurance costs are more expensive on high-performance engines.
you have the responsibility to tell the truth when you apply for insurance. If you leave out important information when applying for insurance, it could result in non-payment by the insurance company when you make a team.
Some insurance companies offer discounts to young drivers who have completed advanced driving skills courses and drivers who have signed up or taken a minimum of 10 driving lessons for register driving instructor.
If you have heard an insurance policy before and not made any claims on it, you may be entitled to a no claims bonus, which is a discount on your premium. The size of the reduction increases the longer you are without needing to make a claim.
Be sure to question your insurer about any discounts that you may be eligible for when taking out insurance.
Often a policy includes an an excess which is a portion of the clean do you have to pay yourself.
Questions to ask about car insurance
What type on level of cover best meets your needs?
How many quotes do you need to get?
Do you want to use a broker? What extra services does the broker provide such as help with making claims and what fee does the broker charge?
Could you get a lower quote by dealing directly with the insurance company or by buying online?.
What loadings (extra charges to cover extra risk) Are the insurance company applying in your case? Are you paying more because of your car, occupation or where are you live? Can you reduce any of these loadings?.
Do you qualify for any discounts?
Rising premiums
Premiums are increasing because insurance companies are losing money on car insurance. There are many reasons for this. The increase in traffic is a major factor because it leads to more accidents and hence more claims. In addition, Ireland has a high level of Road deaths and injuries which result in large injury claims.
Premiums are particularly high for young drivers. Young drivers in Ireland are generally classed as all those under the age of 25
A young driver is about three times more likely to crash than an older driver. One and five young drivers will be involved in a road traffic accident during the first year of insurance. Young drivers are More likely to cause injury to their passengers. As a result of the cost of car insurance for younger drivers is considerably higher than that for more experienced or older drivers.
Home insurance
Home insurance is not a requirement by law.However,insuring your home protects it against the risk of fire or other accidents and damage.
Also,home insurance is required by your lender when you have a mortgage ( and you will have to take out mortgage protection insurance in case you cannot meet your repayments ).
What’s covered with home insurance ??
Policies vary, but in general at home insurance will cover the cost of rebuilding your home in the event of a disaster. It will also include contents insurance to cover harm to or loss of your belongings. In addition some third-party cover will be included in case you’re done with someone else has been in the house you are living in..
