Textbook Notes (368,317)
Canada (161,798)
MCS 3040 (228)
Chapter 28

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Department
Marketing and Consumer Studies
Course
MCS 3040
Professor
Joseph Radocchia
Semester
Fall

Description
Chapter 28 Insurance Introduction Insurance Policy: A contract of insurance Insurer: A company that sells insurance coverage Insured: One who buys insurance coverage Premium: The price paid for insurance coverage  Insurance isn’t a panacea for all risks as insurance can be costly and isn’t always available  Insurance doesn't prevent loss from occurring or prevent potential adverse publicity associated with loss Insurance legislation’s purposes include…  Mandating the terms that must be found in insurance contracts  Regulation the insurance industry  Putting in place a system of monitoring insurance companies Basic types of insurance are…  Life and disability insurance  Property Insurance  Liability Insurance  Will the exception of life insurance contracts, insurance policies can be written so that insured pays a deductible  Insured is responsible for the 1 part of the loss and insurer pays the balance The Insurance Contract Duty to Disclose Duty to Disclose: The obligation of the insured to provide to the insurer all info that relates to the risk being insured  If the insured fails to do so the insurer may choose not to honor the policy  An insurance company can deny coverage for non disclosure even when the loss has nothing to do with the matter that it was left undisclosed  The law places a duty of disclosure on the insured for a straightforward reason: the insurer has to be in a position to fully assess the risk against which the insured wants protection  The only way the insurer can properly assess the risk is if the insured is candid & forthcoming  The insured is usually in the best position to provide insurer with the needed info Insurable Interest Insurable Interest: A financial stake in what’s being insured  The test for whether insured has an insurable interest is whether the benefits from its existence and would be prejudiced from its destruction Indemnity Indemnity: The obligation on the insurer to make good the loss  Insured isn’t supposed to profit from the happening of the insured-against event but at most come out even Subrogation rd Subrogation: The right of the insurer to recover the amount paid on a claim from a 3 party that caused the loss  Insurance company also has the right to rebuild, repair or replace what’s damaged so as to minimize costs  Also has right of salvage Forfeiture rule: A rule that provides that a criminal shouldn't be permitted to profit from a crime The Policy Rider: A clause altering or adding coverage to a standard insurance policy Endorsement: An alteration to the coverage at some point during the time the policy is in force Insurance Products  Insurance is broadly divided into 3 categories: life, property and liability Auto Insurance  A car owner by law is required to have insurance for use & operation of a car  Several types of auto insurance coverage  3 party liabili
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