Irish Junior Certificate Notes on Insurance

1. Insurance
Ms. Tiernan

2. Insurance
“Insurance is a service people can
purchase that compensates them for a
financial loss” (www.skoool.ie)
Ms. Tiernan

3. 
The person who wants to be insured pays
a premium
 Premium
will be higher if loadings are added
e.g. if you were in a 2 crashes last year the
risk of it happening again will be higher)
 Premium will be lower if deductions are
applied e.g. if you travel less than 15,000 km
per year there’s less chance of you crashing

In return the insurance company promises
to pay compensation if a financial loss
occurs
Ms. Tiernan

4. Risks

Risks are insurable when:
Person taking out insurance gains financially
from its existence & suffers from its loss
The loss is accidental
There are a large number of similar risks
being insured against
Possible loss is not so large as to ruin the
insurance company
Ms. Tiernan

5. Forms

Proposal Form – Completed when
taking out insurance
 Sample

Proposal Form
Claims Form – Completed when making
a claim for compensation
 Sample
Claim Form
Ms. Tiernan

6. Ms. Tiernan

7. Ms. Tiernan

8. Principles of Insurance

3 main principles govern insurance
Insurable Interest
Utmost Good Faith
Indemnity
Ms. Tiernan

9. 
Insurable Interest – Person who wants
to take out insurance must gain financially
from existence of what's being insured
and suffer from its loss
Ms. Tiernan

10. 
Utmost Good Faith – Person applying
for insurance must truthfully answer all the
questions

Failure can result in insurance being
worthless
Ms. Tiernan

11. 
Indemnity – The insured person cannot make
a profit from insurance – Two sub-principles:
Principal of Contribution – If same risk
insured by two or more insurance companies
compensation is shared between them
Principal of Subrogation – Once insurance
company pays out compensation it becomes
the owner of the item insured
Note: Underinsurance e.g. if you insure
your house for €100,000 but it was
actually worth €150,000 you will only
receive the €100,000 if it’s burned down
Ms. Tiernan

12. Types of Insurance
taken out by households

Personal Insurance

House Insurance

Life Assurance

Motor Insurance e.g. Third Party
Comprehensive
Ms. Tiernan

13. Types of Insurance
taken out by businesses

Fire Insurance

Employers’ Liability Insurance

Product Liability Insurance

Burglary Insurance
Ms. Tiernan

14. Types of Insurance
taken out by businesses continued

Public Liability

Motor Insurance

Glass & Business Signs Insurance

E-commerce Insurance
Ms. Tiernan

15. Insurance People

Actuary – Calculates the insurance
premium

Assessor – Calculates compensation to
be paid
Ms. Tiernan

16. Practice calculating insurance premiums!
Ms. Tiernan