Study 3 Flashcards
1
Q
Who is the “pool” managed by?
A
The insurer
2
Q
What is the contract evidence of?
A
The insurance policy
3
Q
Who brings together the customer and insurance company?
A
An agent or broker
4
Q
What is the primary function of insurance?
A
Spread risk
5
Q
What are the six functions of insurance?
A
(S.A.L.S.A.S.)
S. Spread risk
A. Aid to security- peace of mind
L. Loss prevention
S. Source of capital- insurers invest large ammounts of
money in the canadian economy through bonds and
stocks
A. Aid to credit
S. Source of employment
6
Q
What are three functions of spreading the risk?
A
(D.V.D.)
D. Diversity of type of risk- writing insurance on as
many types of risks
V. Volume- insuring a large number of risks
D. Diversity of location
7
Q
Methods to calculate indemnity…..
A
- Actual cash value (ACV)- value of property taking into
account depreciation - Replacement value - will be valued on the basis of
the cost to repair or replace it without any deduction
or depreciation
8
Q
What is it when in the event of total loss, the insurer pays a predetermined amount agreed upon when contract was made (Example: used for jewelery, paintings, stamps and coin collection)?
A
Valued contracts
