MCS 2100 Lecture Notes - Lecture 6: Vehicle Insurance, Liability Insurance, Mortgage Insurance

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 2100
• Professor: May Aung

Document Summary

Chapter 8 home and automobile insurance. Chapter 9 life health and disability insurance. Insurance company/insurer: a risk-sharing firm that agrees to assume financial responsibility for losses that may result from an insured risk. Person joins the risk-sharing group (insurance company) by purchasing a policy (contract) Under the policy, the insurance company agrees to assume the risk for a fee (the premium) that the person (the insured or the policyholder) pays periodically. Insurance companies offer financial protection against dangers and losses by promising to compensate the insured for a relatively large loss in return for the payment of a much smaller, but certain expense the premium. Risk: the (cid:272)ha(cid:374)(cid:272)e that so(cid:373)ethi(cid:374)g (cid:373)a(cid:455) (cid:271)e lost; (cid:373)a(cid:455) also (cid:373)ea(cid:374) (cid:862)the i(cid:374)su(cid:396)ed(cid:863); (cid:449)he(cid:374) people buy insurance, they assume that even if the associated risk happens, they will not be overly affected (minimize the potential impact of risk)