Insurance

insurance - financial cover in case of an accident that causes damage

types of insurance

legally required - house and car

voluntary - gadget , health , pet , travel.

key terms

  • premium - the amount you pay each month (or each year) to keep your insurance policy active

  • insurance policy - details of what is insured and for the period in question usually one year

  • insurance agent - an insurance agent works with one company

  • broker - works for his/herself on behalf of companies to get you the best deals

  • actuary - calculates the price of the premium

  • assessor - a person who arrives on the scene and decides the amount of compensation to be paid

  • proposal form - application form for insurance

  • no claim bonus - a reduction in your car insurance premium that you receive for each year you don't make a claim

principles of insurance

  1. insurable interest - you must benefit from its existence and suffer from its loss you must own it

  2. utmost good faith - you must say the truth on the insurance proposal form

  3. indemnity - you can’t make a profit from your insurance claim

  4. subrogation - if you suffer loss but receive compensation you must give it back

  5. contribution - when the insurance is so much you have to use more than one insurance company

  6. average clause - when you only insure a percentage of the thing you own

  7. uninsurable risk - the insurance company might refuse to insure some risks if the likelihood of it taking place is too high

calculations

  • loading increases the cost of premiums

  • discounts decrease the cost and premium

  • the total premium is the basic premium + loadings - discounts

  • loadings are calculated as a percentage of the total basic premium

  • discounts are calculated as a percentage of the basic premium

car insurance

2 types of car insurance

  • Third-party fire and theft - provides the same level of cover as Third Party but with added cover, if your car is stolen or damaged by fire. Like Third Party, if you are at fault for an accident it will NOT cover you for damages to your car

  • fully comprehensive - provides the same level of cover as Third Party Fire & Theft but will also cover you in the event of an accident or damage caused by vandalism. With comprehensive cover, you will receive compensation for the damage to your vehicle even if you're at fault for the accident.

things the car insurance company needs to know

  1. the value of car

  2. the engine size

  3. the alarm immobilizer

  4. your age

  5. driving ability - learner, new driver, or, full license

  6. experience number of years driving

  7. NCB - no claim bonus

policy excess - part of the claim not covered by the insurance company

life assurance

types of life assurance

  • whole life - pays out a lump sum when the insured person dies the premium is bigger than it is for the term insurance because the insurer will have to pay it out

  • term - a type of life insurance policy that provides coverage for a certain period of time, such as 30 years. If the insured dies during the time period specified in a term policy and the policy is active, then a death benefit will be paid.

  • endowment assurance - life insurance that offers a death benefit and a guaranteed lump sum payout after the policy term, as long as premiums are paid.

extra - loadings for life assurance examples dangerous occupations/hobbies

and discounts are non-smokers and non-drinkers