Insurance Flashcards
Insurance
Protects you against a financial loss that might happen
Premium
Money payed to buy insurance
Compensation
Money paid by the insurance company if you suffer a loss
Principals of insurance
Insurable interest Utmost good faith Indemnity Subrogation Contribution
Insurance interest
Benefit from its existence, suffer from its loss
Utmost good faith
Must be 100% honest when completing proposal form
Indemnity
No one can profit from insurance, insurance should make you whole again
Subrogation
If an item is recovered they become the insurance company’s property. You can have the item or the money
Contribution
If insured with more than one insurance company, you will only receive compensation once
Over insurance
Item insured for more than it’s worth
Under insurance
Item is insured at less than its worth
Average clause
Current market value of item
Non insurance risks
Some items that cannot be insured
Adequate insurance
Covers all risks and ensures compensation for the full market value
