insurance Flashcards
what is insurance
covers any risk that might happen
what is assurance
covers a risk that will happen
what are the five princaples of insurance
utmost good faith insurable interest indemnity subrogation contribution
what is utmost good faith
a person has to answer all questions truthfully when completing a proposal form and disclose all relevant facts
what is insurable interest
you must gain by its existents and suffer by its loss
what is indemnity
you cannot make profit from a loss. the compensation you receive will only be equal to the current value of the item
what is subrogation
the insurance company has the right to seek compensation from the party who caused the loos or damage and take damaged item for scrap value
what is contribution
if you insure an item with more that one insurance company each company will contribute to the compensation
What are the steps of insurance
Seek quota
Proposal form
Pay premium
Issue policy
waht is seeking a quota in insurance
you must apply to a number of insurance companies and make application. this is to insure that you receive the best value for you money. you can enquire yourself for request the help from insurance broker
what is a proposal form
it is a application for to be completed when applying for insurance. you must tell the truth when completing the form
irem on proposal form
age
gender
address
value of item
what is the premium
it is the sum of money paid ti the insurance company in return of the insurance
how is premium price
level of risk
value of item being insured
the length of time
what is the insurance policy
this is the document covering the details of the
risks covered
period covered
value of cover
conditions of contract
it is the contract of insurance
what is an insurance agent
work for herself
shops around for the best deal on behalf
paid commision from the insurance company
what is an insurance broker
works for insurance companies
receives commision for each sale trade
what is a insurable risk
it must be possible to calculate the risk involved and there must be a likelihood of the risk not happening
what is an non-insurable risk
chances of risk or loss happening are impossoble ti estimate
what is an actuary
this is the person who calculates the premium
what is a loading
any extra risk is known as a loading. an extra premium is changes when the risk is high
no claims bonus
this is the deduction given to customers given accident free record
what are days of grace
it may take a few days to renew policy so the insurance company will cover for you free known as days of grace to give you time to renew policy
what is fully insured
this means that you will be compensated for the full amount of damage/loss created
