Insurance.Lecture4

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Insurance.Lecture4

  1. 1. Principles of Insurance <ul><li>Insurance Lecture 4 - Mark Griffin </li></ul>
  2. 2. Principles of Insurance <ul><li>The Principles of Insurance are concerned with conditions that create the need to insure, allow for items to be insured and allow for appropriate compensation to be gained, having placed a claim with the insurer. </li></ul>
  3. 3. Insurable Interest <ul><li>The insured must benefit from the existence of what he/she is getting insured and must suffer if it is lost. </li></ul>
  4. 4. Insurable Interest <ul><li>Legal ownership is a prerequisite to this principle. </li></ul>
  5. 5. Utmost Good Faith <ul><li>Trust must exist between the insurer and insured. </li></ul><ul><li>If all facts are not disclosed it would lead to a void contract of insurance. </li></ul>
  6. 6. Indemnity <ul><li>Subrogation, Contribution and Proximate Clause are follow on conditions to indemnity. </li></ul>
  7. 7. Indemnity <ul><li>Only the loss incurred is compensated - no more. </li></ul><ul><li>The insured is no better off (No profit gained) than they were prior to the incident that triggered the claim. </li></ul>
  8. 8. Subrogation <ul><li>After the insurance company has paid out the compensation to the insured, the company is entitled to claim against any third party and can take legal action against the person who was responsible. </li></ul>
  9. 9. Contribution <ul><li>If two different insurance companies are employment </li></ul><ul><li>i.e. if the insured is overinsured, the principle of indemnity still applies, and the insured only gets back the loss and no more. </li></ul>
  10. 10. Proximate Clause <ul><li>This referees to the nature of the risk that an item is being insured against. </li></ul><ul><li>The insurance company always checks the policy to make sure that the risk was insured against before they pay out the compensation. </li></ul>
  11. 12. Principles of Insurance <ul><li>How many principles of insurance are there? </li></ul><ul><li>Can you name them? </li></ul><ul><li>Would you be able to explain in your own words each principle? </li></ul>
  12. 13. mark. ie griffin@lcfe. For questions, queries and meetings.

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