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Insurance Ans

The document outlines key concepts and principles of insurance, including terms like utmost good faith, indemnity, and insurable interest. It discusses various types of insurance policies, challenges faced in the industry, and the process of acquiring insurance. Additionally, it highlights the importance of proper disclosure and the relationship between the insured and the property or life being insured.

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10 views5 pages

Insurance Ans

The document outlines key concepts and principles of insurance, including terms like utmost good faith, indemnity, and insurable interest. It discusses various types of insurance policies, challenges faced in the industry, and the process of acquiring insurance. Additionally, it highlights the importance of proper disclosure and the relationship between the insured and the property or life being insured.

Uploaded by

trecityanselm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INSURANCE

1. a – Insure

b – Risk
c – Premium
d - Insurer
2. i) Utmost good faith-ensures that details offered are up to date and correct for
proper
evaluation
ii) Indemnity-stresses the understanding that in the event of loss, the insure
does not
benefit/insures does not over compensate
iii) Contribution-creates understanding to insurers who may have jointly en-
sured a risk
iv) Insurable interest-ensures that insured does not incur losses on property not
assured by
insurer

3. - Bad debt cover


- Consequential loss
- Workman’s compensation
- Personal accident cover

4. -Ignorance on the importance of these policies


-Wide spread poverty/low incomes
--Fear of losing their money because of past experience
-Corruption and embezzlement of funds by insurance company officials result-
ing in delay of
compensations
-Long procedure of claiming

5. (a) Total constructive marine loss: When a ship and/or its cargo are totally
damaged but can
be retrieved
(b) General average marine loss: This is when some of the cargo are jettisoned
into sea
deliberately to save the ship and rest of the cargo from sinking

6. - The property or life being insured must be the subject matter of the insurance
agreement
- There must be some property or life that is capable of being insured
- The relationship between the insured and the property or life must be recog-
nized
- The insured must stand in relationship with the property or life being insured

7. - Occurrence of a loss must be accidental not deliberate


- Risk must not violate laws of the country
- Risk must be pure and not speculate
- Insured must suffer financial loss
- The risk must not be catastrophic
- The possibility of the risk taking place should not be near certainty
- For any misfortune the must be a large number of people affected

8. - Compensation is guaranteed
- Losses are shared by the group
- Funds contributed by the group are large

9. i) A person wishing to acquire a policy must fill in the form


ii) The insurance company then accesses the applicant and then calculates the
premium to be paid by the insured
iii) The insured then pays the first premium to the insurer/ insurance company
iv) The insured then issues a cover note to the insured to show that the con-
tract is now on
v) Then finally the insured is issued with a policy document
Note a step must NOT be skipped or confused for another

10. 400,000- true value of property

INSURANCE
1. (i) Where the policy has elapsed due to non-payment of premiums
(ii) Where the occurrence of the risk was not accidental
(iii) Where the insured had no insurable interest in the property insured
(iv) Where the insurer fails to make a formal claim for compensation
(v) Where the cause of the loss has no close relationship with the risk insured
Where the insured failed to disclose all the relevant material facts about the
subject
insured and he/she is proved

2. - Identification of insures
- Filling in the proposal form
- Inspection of the subject matter and calculation of premiums
- Payment of the first premium upon which a binder is issued
- Issuance of the actual policy by the insurer

3. - Saving – The payment of premiums is a kind of saving to the policy holder


- Security – The policy is security for both the assured and beneficiaries
- The holder can secure a loan from the insurer without having to pledge for
further security
- Interest/ Bonuses – The policy earns interest or bonuses on the paid up
premium
- Investment – The holder may want to invest more by buying shares in the
company
- Can use the matured amount after the stated period to invest

4. - Insurable interest : Insurable interests exists where due to a risk occurring a


person is bound
to suffer financial loss. A person has insurable interest in his or her own life
and property but
not in that of his or her mere friend
- Indemnity: It is the restoration of the insured who suffers loss to his former
financial position
he or she was before the loss occurred
-Utmost good faith: (“Uberrima fedei”)
Obligation to both the insurer and the insured to disclose all the relevant mate-
rial facts relating
to the insurance contact
- Proximate cause: The cause of the loss for which a claim for compensation is
made should
have direct or fairly close connection with the actual or real risk insured
against
- Contribution: Incase one insures with two or more insurance companies to
cover the same
risk, the different insurance companies will share proportionately. When it
comes to
compensating the insured for the loss arising from the occurrence of the risk.
N.B Incase of
life assurance policies each insurance company will for instance in the case
of a bodily injury
compensate the insured as per its contract with him or her
-Subrogation: Once the insurer has indemnified the insured fully as a result,
the insurer
acquires all the rights the insured had in the destroyed property

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