1. What is insurance? . . . . . . . . . . . . . . 109 2. What types of personal insurance can we . . have? . . . . . . . . . . . . . . . . . . . . 109
3. How can we take out insurance? . . . . . . 111 4. What rules apply when insurance companies pay compensation? . . . . . . . . . . . . . 113
5. How can an insurance company settle a claim? . . . . . . . . . . . . . . . . . . . . 115 Chapter Review . . . . . . . . . . . . . . . . 116
Learning Outcomes 1.2 1.6
Case Study Home Insurance
The Foleys are renewing their house insurance. They don’t want to make the same mistake as Uncle Larry. He tried to save money by not having house insurance, but a faulty plug in the living room started a fire one night. Larry did not have any smoke alarms and only woke up when he heard his neighbours shouting.
I thought the
risk of a fire or other disaster was tiny. I needed the insurance money to get the latest smartphone.
You tried to save
on insurance and ended up losing your home. Now you are back living with Granny and
Grandad in your old bedroom - complete with matching Spiderman duvet and pillowcase!
Pair work
When Larry chose to buy a new smartphone, what was the opportunity cost of this decision?
