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Personal Insurance covers losses to individuals and families due to death, illness, injury, disability and unemployment. Loss exposure presents the possibility of financial loss, whether or not loss occurs. Cause of loss: Means by which property is damaged or destroyed (fire, windstorm etc). This is also called as Peril.
Elements of Property loss exposures Property exposed to loss Real property land, building and other structures embedded in it or attached to it. E.g.: Underground pipes, foundations, storage shed, and detached garage. Personal Property tangible / intangible property that is not real property. E.g. Patent, Copyright, Coins Possible causes of loss means by which property is damaged/destroyed (perils) Financial consequences of loss Reduction in value of property: preloss value postloss value Increased expenses in addition to normal living expenses Lost income
Dwelling contents: Broadest category of personal property Common to the use of dwelling as a home Items generally insured as a group High-value personal property: Silverware, jewellery, furs and firearms Can be partially covered under dwelling contents, however might require separate category because of limitations on coverage amount. To keep premium reasonable for the average customer, might have to pay additional premium to insure such property
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Liability loss is a claim for money damages because of injury to another party or its property. Claims are governed by civil law the legal foundation of insurance. Financial consequences that might occur Cost of investigation and defense Money damages awarded if defense is unsuccessful Civil law deals with rights and duties of citizens regarding one another.
Types of claims
Tort Liability Contractual Liability Statutory Liability
Types of claims
Tort Liability:
Tort a wrongful act other than a crime or breach of contract. Negligence failure to act in a reasonably prudent manner A duty to act Breach of duty Injury or damage Breach of duty the direct cause of injury/damage
Types of claims
Tort Liability:
Tort a wrongful act other than a crime or breach of contract.
Intentional torts regardless of whether harm is intended deliberate act Libel written or printed untrue statement Slander oral untrue statement Assault intentional and unlawful threat of bodily harm Battery unlawful physical contact Trespass unauthorized possession or use of land. Nuisance violation of a persons right to enjoy use of property without disruption from outside sources
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Types of claims
Tort Liability:
Tort a wrongful act other than a crime or breach of contract.
Absolute liability- dangerous activities/defective products, regardless of degree of care, it does not require proof of negligence.
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Risk Management
Carrying out decisions that will decrease the adverse effects of potential losses is risk management.
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Basics of Personal Risk Management (risk management applied to loss exposures of individuals and families)
It involves the following steps: Identifying loss exposures Analyzing loss exposures Examining various techniques Choosing the appropriate technique Implementing the chosen technique Monitoring and revising the plan.
Errors and omissions: Negligent act (error) or failure to act (omission) while conducting insurance business. Can lead to legal liability of damages
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Loss prevention: control frequency of loss Loss reduction: controls severity of loss
Avoidance: by choosing not to own a particular property or engage in particular activity Noninsurance Transfer: transfers loss from one party to another party that is not an insurer. Retention: no transfer of loss exposures to insurance company or anyone else.
Intentional Unintentional.
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