1. © Annie Patton Insurance Part 1 Next Slide

2. © Annie Patton Aim of Lesson To introduced to the concept of insurance, associated words, insurable and non insurable risks and the need for different types of insurance. Previous slide Next Slide

3. © Annie Patton What is Insurance? Insurance is an agreement between an insurance company and individual or a business, that if they suffer a particular loss they the insurance company will Compensate (reimburse) them for the loss. Notice only the loss mentioned in the agreement is covered. Next Slide Previous slide

4. © Annie Patton Pooling of Risks Insurance is a pooling of risks, because a lot of people with similar risks contribute their premium to an insurance company and hopefully only a few of them will suffer the loss at a particular time. In addition to the insurance company making a profit, the premium that the insurance company receives will go towards compensation of the unfortunate ones. Thus all that take out insurance are contributing to the loss of the few, who suffer the loss. Previous slide Next Slide

5. © Annie Patton Insurance company HABCDEFG Insurance is based on the principle that A, B, C, D, E, F, G, H etc all pay in Premiums, but the risk only happens to A. However if the accident also happens to B and C the insurance company makes very little profit and if it happens to more they will make a loss. Next Slide Previous slide

6. © Annie Patton The person or business that gets compensated if the loss occurs is known as the Insured. The company that agrees to pay the compensation is known as the Insurer. The money that is paid by the Insured to the Insurer is called the Premium. Next Slide Previous slide

7. © Annie Patton The Premium, that is the money that is paid in will be much less that the compensation that will be paid out if the loss is suffer, because there has to be a chance that the loss will not occur. The greater the risk of the incident occurring the greater the premium. For example young drivers have to pay greater premiums, because more of them have accidents. Premium Next Slide Previous slide

8. © Annie Patton Notice the insurance company will only cover risks that may or may not happen. For example a fire, a robbery, car accident. These are called Insurable Risks. However if you crash your car on purpose, it will not be covered. Things that one can influence whether it happens or not are called uninsurable risks. For example passing one’s Leaving Certificate examination. These are called Uninsurable Risks. However insurance can be got on ones life, but it is not whether they will die that is being insured but when they will die. It is called Life Assurance rather than Life Insurance. Next Slide Previous slide He is crazy taking an uninsurable risk

9. © Annie Patton The premium depends on three factors: The cost of compensation. This will depend on the cost of the item insured and the chance of the risk involved happening. The insurance company’s costs. For example wages, cost of running their offices. The insurance company’s profits. Next Slide Previous slide

10. © Annie Patton The premium depends on three factors: Next Slide Previous slide

11. © Annie Patton Proposal Form Before the insurance company (the Insured) agrees to cover you for insurance, they will ask you to fill out a form called a Proposal Form. Like a marriage proposal the insurance company can then agree to accept your proposal or reject it. However the method of rejection is often done by, asking for a very high premium. Next Slide Previous slide

12. © Annie Patton Sample proposal form Next Slide Previous slide Click here to see a typical proposal form for car insurance and go to car insurance quotes. http://www.allianzdirect.ie/?m=p&s=a&c=1&Ad=5.1.1 If worksheet is being used, there is no need to view this page in great detail.

13. © Annie Patton Insurable Risks for an Individual Fire in the home Break in Water Leakage Vehicle Insurance The need for health care (Private Health Care) Death of a spouse Health of a pet (Vet’s fees) Next Slide Previous slide

14. © Annie Patton Insurable Risks for a Business Employers Liability. This is incase one of their employees have an accident or suffer injuries, while working for them. This load is damaging my back. This screen is damaging my eyes Next Slide Previous slide

15. © Annie Patton Insurable Risks for a Business continued Product Liability. This covers them for any damage their products could do to other people. For example someone getting food poison from a restaurant or a child cutting their finger on a toy. Next Slide Previous slide Cake company against food poising

16. © Annie Patton Insurable Risks for a Business continued Public Liability This covers the firm against claims made by members of the public, who have had an accident on the firm’s premises. The accident has to be caused by the firm's neglect. For example someone slipping on a banana skin would be covered, but someone having a heart attack would not be covered. It also covers damage done to other people, as a result of any activities of the firm. For example sickness caused by pollution caused by the firm. Next Slide Previous slide

17. © Annie Patton Actuary The person in the insurance company that calculates the premium required for each category of risk, is called an actuary. This is normally a very well paid job. High mathematical skills required. Next Slide Previous slide

18. © Annie Patton Policy Document issued by the Insurance Company (Insurer) to the Insured. This document outlines details of what is covered and what is not covered. It is always important to read the small print. It is proof of the insurance deal. Next Slide Previous slide

19. © Annie Patton Cover Note This is like a temporary policy, but normally only acts as proof of insurance and only gives brief details of what is covered. Previous slide Next Slide

20. © Annie Patton The End More about Insurance next lesson Previous slide