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JC Business > Insurance > Flashcards

Insurance Flashcards

1
Q

Explain compensation

A

When an insurance company pays for damage its known as compensation

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2
Q

Explain premium

A

The amount of money people pay to the insurance company is called premium

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3
Q

How does insurance work

A

People pay their premium for the year to the insurance company.
The insurance company then uses this pool of money to pay people who have suffered a loss.
They invest the remainder of the money to try and make more.

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4
Q

How do insurance companies make money

A

They make money because not everybody will suffer a loss in their lives so they receive more money than they pay out.

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5
Q

Explain actuary

A

Actuary works for an insurance company. Uses statistics to work out the risk of something happening the higher the risk the higher the premium.

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6
Q

Explain insurance broker

A

If you need insurance you contact an insurance company directly or you contact a broker. A broker contacts multiple companies to get you the best deal. Ex:chill insurance

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7
Q

Explain loss adjuster

A

Independent investigator who becomes involves when there is a disagreement between the insured and the insurance company. This occurs for complicated claims and negotiates something between the insurers and insured. .

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8
Q

Explain Assessor

A

Is employed by the insurance company to make sure claims are covered by the terms of policy and investigates cause of damage or loss

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9
Q

What does an insurance company do

A

They pay for damage caused

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10
Q

Explain risk

A

Likelihood of something happening

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11
Q

Explain claim

A

Damage is done and asking the insurance company to pay for the damage.

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12
Q

Loadings

A

Loading~higher risk~higher premium.

Ex: if you have a dangerous job you pay more for life assurance

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13
Q

Discount

A

Dicount~ lower risk~ lower premium

Ex:non-smoker

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14
Q

What does house insurance cover

A

Building and contents

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15
Q

What is the buildings insurance

A

The cost that it would take to build the house not what it would sell for.

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16
Q

Explain contents

A

Valuables inside the house

17
Q

Explain and give example of average clause

A

Under insuring your home.

Ex:
House value;200,000
Insured for :100,000
Damage done: 50,000
Compensation: 25,000
18
Q

Name the two types of motor insurance

A

3rd party fire and theft

Fully comprehensive

19
Q

Explain 3rd party fire and theft

A

Minimum insurance cover you have to have. If the damage is your faulty out or your car are not covered. Only the other person is covered.

20
Q

Explain Fully comprehensive

A

Everybody in the crash is covered this has an expensive premium

21
Q

Explain no claims bonus

A

If you don’t make a claim your premium is lower.

22
Q

What is a proposal form

A

You fill out this form when applying for insurance. You must tell the truth on the form and the insurance company can say yes or no to your application.

23
Q

Explain policy

A

If an insurance company says yes to your proposal form they send out a policy. This is the contract between you and the insurance company and it gives details of the risks covered

24
Q

Explain claim form

A

When you suffer a loss and you want compensation you fill out this form. You may need to provide evidence with your claim form ex. Cost to fix roof.

25
Q

What are the five principles of insurance

A 
Utmost good faith
Insurable interest
Contribution
Indemnity
Subrogration
26
Q

Explain utmost good faith

A

Must tell the insurance company the truth and all the facts

27
Q

Explain insurable interest

A

You must suffer a loss when insured item is damaged

28
Q

Explain contribution

A

If your house is covered by two insurance companies they will pay half the compensation each

29
Q

Explain indemnity

A

You can’t make a profit from insurance

30
Q

Explain subrogation

A

If there is a dispute over who is at fault the insurance company can continue the claim in your name.

31
Q

What are the three types of life assurance

A

Term policy
Whole life policy
Endowment policy

32
Q

Explain term policy and why people get it

A

Term policy pays out if the insured person dies before an agreed date. Policy pays next of kin
It’s cheaper and also people get it to protect their young families.

33
Q

Explain whole life policy

A

This type of life assurance will pay out an agreed sum of money whenever insured person dies. The money is paid to persons next of kin
The premium is higher because the company will definitely have to pay out.

34
Q

Explain endowment policy

A

The most expensive policy. It pays out money on a certain date, in the future to the insured person or it pays out to the next of kin if the insured person dies before that date.
They can also be cashed in by insured person before the set date for a lower amount known as surrender value

JC Business (24 decks)

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