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Fundamentals of Insurance (Chapter 1 - Introduction to General Insurance…
Fundamentals of Insurance
Chapter 1 - Introduction to General Insurance
5 functions of insurance
Spread Risk
Basis of Credit System
Eliminates worry
Loss prevention and loss reduction
Source of Employment and Investment capital
Definition of Insurance
Shifts the financial loss from one financial responsibility to another
Payment made in the event of the happening of a certain risk or peril
Amount of payment is restricted to amount required to indemnify the insured
Insurance cover losses
Compensation provided (indemnity) can be money or other form of thing of value
General Insurance
Automobile Insurance
Property Insurance
Liability Insurance
Organization of Insurance
Government Insures
Private Insures
Stock Companies
Mutual Companies
How Insurance is distributed
Direct writing system
Independent Brokerage System
Agency System
Lloyds of London
Chapter 2 - Insurance Contracts
Dealing with risk
Categories of Risk
Property risk (lost or damaged property)
Liability risk (injury or damage to others)
Personal Risk (unemployment)
Avoidance of Risk
Controlling of Risk
Retention of Risk
Transfer of Risk
Risks
NOT
insurable
Speculative Risk
Pure Risk
Understanding Insurance Contracts
5 elements of contracts
Agreement
Consideration
Legality of Object
Legal Capacity of the Parties to Contract
Minors
Mental Incompetents
Person under the influence of alcohol or drugs
Legal Entities
Genuine Intention
Fraud
Mistake
Duress
Concealment
3 Essential Elements to Insurance Contracts
Utmost Good faith
Insurable Interest
Indemnity
Status of Contracts where essential elements are not present
Void
Voidable