You are on page 1of 13

Introduction to Insurance

WHAT IS INSURANCE?

Insurance is a legal contract that


transfers risk from a policyholder to
an insurance provider.
Introduction to Insurance

Premiums

Insurance
Company Claims

HOW INSURANCE WORKS


Introduction to Insurance
WHAT TYPES OF RISKS DOES INSURANCE COVER?

Risk Insurance Coverage

1. You lose your job Mortgage and Credit Will cover your debts
for a fixed period
while you are
unemployed

2. Your stocks lose value None None

3. You have a car crash Auto Will pay for damage to


your car and other
damaged vehicles and
property. Will pay for
medical expenses for
you and other parties.
Introduction to Insurance
WHAT TYPES OF RISKS DOES INSURANCE COVER? (Cont.)
Risk Insurance Coverage

1. Your friend falls in your Homeowners, Will pay fixed amount


home and breaks his leg renters, condo for his medical
owners expenses

2. A pipe bursts in your Renters Will pay to replace


apartment building and ruins your sofa or for the
your sofa sofa’s value

3. The police give you a None None


speeding ticket

4. You are hurt on the job Disability; workers’ Disability: Will pay
compensation your lost wages and
medical expenses
Introduction to Insurance
WHAT TYPES OF RISKS DOES INSURANCE COVER? (Cont.)

Risk Insurance Coverage

1. A necklace is stolen from Homeowners; Will pay to replace


your home renters/ condo; your necklace up to a
mobile home fixed amount

2. You die Life Insurance Will distribute money


to your beneficiaries
and cover household
expenses

3. Other suggestions? ??? ???


RISK FACTORS DETERMINE WHETHER YOU WILL
BE ABLE TO BUY A POLICY AND HOW MUCH IT
WILL COST.

GENERALLY SPEAKING:
> RISK = > COST
Introduction to Insurance

 PRINCIPLES OF INSURANCE:
 Principle of Insurable interest.
 Principle of Utmost Good Faith.
 Principle of Indemnity.
 Principle of Subrogation.
 Principle of Contribution.
 Principle of Causa Proxima.
 Principle of Mitigation of Loss.
Introduction to Insurance
Introduction to Insurance
Introduction to Insurance
Introduction to Insurance
Introduction to Insurance