•People insure things that arevaluable to them and that wouldcost a lot of money to replace ifthey were stolen or damaged insome way
Insurance is a way of protecting ourselves financially by arranging for the payment of a sum of money in the event of loss or injury occuring.
Cover all possible risk Be enough to cover the loss that might occur e.g. if a house is worth €100,000 it should be insured for €100,000, and not for less http://www.commoncraft.com/video/insurance
Example of Motor Insurance Not everyone’s car will be stolen or damaged so the money paid to the insurance company is used to pay a small % of people whose cars are stolen or damaged This is known as the Pooling of risk
1. Calculate the value of the item you wish to insure 2. Contact an insurance company 3. Complete the proposal form
4. When the insurance company accepts the proposal for insurance, you must pay the premium. 5. Within a couple of weeks, the insurance company will send the insurance policy and certificate of insurance to you.
By law every person who drives a car must have insurance. http://www.nononsense.ie/ http://allianz.ie/car-insurance/
Third party, fire Compensates the insured inand theft the case of the car going on fire or being stolenComprehensive This gives third party, fire and theft cover, as well as accidental damage, which gives compensation for damage to the motorist’s own car
If you have no accidents or claims made during the year, you will receive a discount on your premium for the next year. This is known as a no claims bonus
House Insurance Covers the house against damage by fire or break in. It is very important that the insurance cover is adequateHouse Contents This gives compensation if household contents are stolen or damaged, e.g. furniture, clothes etcAll Risks All risk insurance gives wider cover than that given by house contents insurance.
Medical insurance This covers the cost of doctors and hospitals in time of illness. E.g. VHI and AvivaPRSI The State insurance covers people who are out of work through illness or unemploymentHoliday Insurance This gives compensation in the event o a holiday having to be cancelled, a person becoming ill on holiday or goods being stolen while on holiday
Whole Life This guarantees to pay an agreedAssurance sum of open to the dependents when the insured person diesTemporary life Provides cover for an agreed(Term) Assurance period of time, e.g. up to 65Endowment to pay an agreed sum on theAssurance death of the insured person, or on the insured person reaching a certain age, whichever comes first
Assurance differs from insurance in two ways:1. In insurance there is the possibility of the event happening, whereas in life assurance, there is a certainty that a person or reach a certain age2. Insurance is taking out on an annual basis whereas life assurance is taking out over a definite number of years
1. Insurable Interest:People can only insure something where they benefitfrom having the item and it would cost you money toreplace it if it was robbed or stolen, e.g. Your houseYour House Neighbours House
2. Utmost good faith: Answer all questionstruthfully and provide all relevant informationto the insurance company. E.g. Insurancecompany may refuse to pay a claim for ahouse fire, because it was not told that theroof was thatched.
3.Indemnity: This rule states you should notmake a profit from insurance.
4. The principle of Contribution: If a risk is insured by two or more insurance companies, any compensation payable will be shared between the companies. Eg. Camera stolen on holidays. – house and holiday insurance policy.
5. The principle of Subrogation: Insurers, who payout full compensation for an item which they haveinsured, are entitled to take possession of the itemand sue a third party. subrogation – linked to indemnity.
Average Clause: Besides the five principles there is another important rule in insurance, called the average clause. This states that if something is insured for only a proportion of its value, for example, half of its value, the insurer is only liable for the same proportion of the loss, i.e. half, when a claim is made.
There may be a legal requirement to do so. E.g. PRSI, Motor Insurance. Insurance may be required as a condition for getting a loan. To protect against the risk of serous financial loss. To give the insured person peace of mind.
1. Loss of profit due to sudden increases in the cost of production2. Loss of profit due to strikes3. Loss of profit due to changes in consumers’ tastes and fashions4. Loss of profit due to the entry of new rival firms into the industry5. Loss of profit due to the adverse effects of new legislation6. Loss of profit due to adverse effects of international trade agreements before the trade agreement7. Loss of profit due to bad management
Install security devices Security Procedures Training Staff Maintenance of Car Careful Driving