วันเสาร์ที่ 23 กรกฎาคม พ.ศ. 2554

Knowledge All Insurance

I. Insurance: a contractual arrangement that protects against loss.

i. Indemnify- the party that pays to compensate for a specified type of loss that occurs for another party.

ii. Insurer- the party who agrees to indemnify.

iii. Insured- the party covered or protected.

iv. Policy- written contract of insurance

v. Face Value- the stated maximum amount that could be paid if the harm a person is insured against occurs.

vi. Premium- consideration for a contract of insurance

vii. Risk- the possible loss arising from injury to or death of a person or from damage to property from a specified peril.

A. Life Insurance: Insurance that pays the beneficiary a set amount upon the death of a specified person.

a. Term Insurance- written for a certain number of years—generally 1, 5, or 10 years.

i. If the insured dies within the policy term, the beneficiary receives the face value of the policy.

ii. If the term ends before the insured dies, the contract ends with no further obligation on the insured or insurer.

b. Whole Life Insurance (ordinary or straight life insurance)- provides for the payment of premiums for as long as the insured lives or until age 100.

i. If the insured dies, the face value less any outstanding loans against it is paid to the beneficiary.

c. Endowment Life Insurance- requires the insurer to pay the beneficiary the policy’s face amount if the insured dies within the period of coverage, usually 20 years or until the insured reaches retirement age.

i. If the insured lives to the end of the coverage period, the owner of the policy (usually the insured) is paid the face value.

B. Fire Insurance: Indemnifies for loss or damage due to fire (and usually smoke as well).

C. Casualty Insurance: Provides coverage for a variety of specific situations in which the intentional, negligent, or accidental acts of others or mere chance may result in loss.

i. Burglary, Robbery, Theft, and Larceny Insurance- Protects against losses resulting from identifiable criminal behavior.

ii. Automobile Insurance- indemnifies for losses arising from or connected to the ownership and operation of motor vehicles.

iii. Liability Insurance- Provides protection against claims of parties who suffer injury or other loss as a result of negligence or other torts committed by the insured.

iv. Disability, Accident, or Health Insurance- These policies protect the insured from the financial consequences of hospital bills and loss of income stemming from accident or illness.

D. Social Insurance: Insurance that protects individuals against unemployment, disability, poverty, and medical expense problems.

E. Marine Insurance: Indemnifies for loss of or damage to vessels, cargo, and other property exposed to the perils of the sea.

F. Inland Marine Insurance: Covers personal property against loss or damage caused by various perils where the property is located. The property is also covered while it is being transported by any means other than on the oceans.

G. Fidelity and Surety Bonding Insurance: Provides coverage against financial loss caused by dishonesty.

i. These include:

1. Embezzlements

2. Failure of one person to perform a legal obligation to another

ii. Contracts of fidelity insurance are often known as surety bonds.

iii. Insurable Interest- potential to sustain loss.

II. Insurable Interests

A. Insurable Interests in Property: Any person who would suffer a direct and measurable monetary loss if property were damaged or destroyed has an insurable interest in that property.

B. Insurable Interest in Life: A person has an insurable interest in her or his life.

III. Property and Casualty Insurance

i. Property Insurance- Intended to indemnify for harm to the insured’s personal or real property brought about by perils such as fire, theft, and windstorm.

ii. Casualty Insurance- Indemnifies for losses resulting from accident, chance, or negligence.

iii. Exclusions: Certain exceptions to coverage that relieve the insurance company from paying.

A. Fire Insurance: Type of property insurance that covers the direct loss to property resulting from fire, lightning strike, or removal from premises endangered by fire.

i. Standard Fire Policy- Composed of basic policy provisions required by the law of the state in which the policy is written.

ii. Endorsements to the Standard Fire Policy

1. Endorsements- attached to the policy and forms to provide for special and individual needs.

iii. Providing a Loss Should be Indemnified: 3 steps must be taken

1. The insured must show that there was an actual fire. A glow or flame is required. Damage to an item resulting from scorching, blistering, or smoke due to being too near to a heat source is not enough.

2. The actual fire has to be hostile.

a. A fire started by accident, negligence, or deliberate act uncontrolled by the insured

b. A friendly fire ( a fire in its intended place) that becomes uncontrollable

3. The hostile fire has to be the natural and foreseeable cause of the loss.

iv. Coinsurance: a clause in a fire insurance policy that requires the insured to maintain coverage equal to a certain percentage of the total current value of the insured property.

B. Inland Marine Insurance: Indemnifies loss to most personal property while it is being transported across land or inland waterways.

C. Liability Insurance: A type of casualty insurance that indemnifies against personal injury or property damage claims for which the insured is legally responsible.

IV. Automobile Insurance: Coverages that include: liability coverage, medical payments coverage, collision and comprehensive coverage, and uninsured and underinsured coverage.

A. Liability Coverage: Obligates the insurer to represent and provide for the insured’s defense is the insured is accused of or sued for negligent ownership, maintenance, or use of the motor vehicle.

B. Medical Payments Coverage: Pays for the reasonable medical claims of occupants of the insured’s vehicle who are injured in an automobile accident.

C. Collision and Comprehensive Coverage

i. Collision Insurance- Protects against direct and accidental damage due to the vehicle caused by:

1. colliding with another object

2. overturning

ii. Comprehensive Insurance- Indemnifies insureds for damage to their own vehicles.

D. Uninsured and Underinsured Coverage

i. Uninsured Motorists Coverage- allows the insured to collect damages from his or her own insurance company when they are not collectible because the person who caused the harm is uninsured.

ii. Underinsured Motorists Coverage- Compensates the insured when the negligent driver may be insured but doe not have sufficient insurance to cover damages.

E. No-Fault Insurance: requires that parties to an automobile accident be indemnified by their own insurance company regardless of who is at fault.

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