Principles of Insurance Q8 Complete the sentences using the words in the box. Each term is used once.


Indemnity


Subrogation Utmost Good Faith


Insurable Interest


Contribution


1. Under ___________________________________, all material facts must be disclosed when applying for insurance.


2. ________________________ means a person must have a financial interest in the item being insured.


3. ________________________ means a profit cannot be made from insurance. The insured is restored to the same financial position as before the loss.


4. Under ________________________, if the same risk is insured with more than one insurer, the companies share the cost of any claim between them.


5. ________________________ allows the insurance company, after paying out on a claim, to take legal action against the party responsible for the loss to recover its costs.


Q9 Read each example below and name the principle of insurance it relates to by writing your answer in the box.


Example


1. Eoin does not mention his penalty points when filling out his motor insurance proposal form. Which principle has he broken?


2. Rachel’s three-year-old television is destroyed in a fire. Her insurer pays her its current value, not the price of a brand-new model.


3. Niall wants to take out an insurance policy on his friend’s motorbike. Which principle prevents this?


4. Orla’s insurer pays to repair her car after another driver crashes into it, and then takes legal action against the driver at fault to recover the cost.


5. A jeweller insures the same stock with two insurance companies. When a claim is made, each company pays half.


54 2 Principle


STRAND 1


CHAPTER 6: Personal insurance


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