Circle the correct option in the case of each of the following statements - Leaving Cert Business - Question 4 - 2021
Question 4
Circle the correct option in the case of each of the following statements.
(i) A larger policy excess will result in a higher / lower insurance premium.
(ii) The p... show full transcript
Worked Solution & Example Answer:Circle the correct option in the case of each of the following statements - Leaving Cert Business - Question 4 - 2021
Step 1
(i) A larger policy excess will result in a higher / lower insurance premium.
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
A larger policy excess will result in a lower insurance premium. This is because a higher excess means the policyholder accepts more risk, leading to a reduction in the premium cost.
Step 2
(ii) The person who calculates the amount of compensation to be paid to a claimant is known as an Actuary / Assessor.
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The person who calculates the amount of compensation to be paid to a claimant is known as an Assessor. Assessors evaluate claims and determine the compensation owed.
Step 3
(iii) Indemnity / Utmost good faith means you cannot make a profit from an insurance claim.
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Indemnity means you cannot make a profit from an insurance claim. This principle ensures that compensation is provided solely to restore the insured to their pre-loss financial position.
Step 4
(iv) Loadings on an insurance policy result in an increase / decrease in the premium.
98%
120 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Loadings on an insurance policy result in an increase in the premium. Loadings account for additional risks or factors that heighten the likelihood of a claim.
Step 5
(v) An insurance company who tries to reclaim any losses against a third party is using the principle of contribution / subrogation.
97%
117 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
An insurance company who tries to reclaim any losses against a third party is using the principle of subrogation. This allows insurers to recover their costs after compensating the insured.
Join the Leaving Cert students using SimpleStudy...
