types of household insurance. distinguish between insurance protection against a loss you hope will...

Types of Household Insurance

Types of Household Insurance

Distinguish between • Insurance• Protection against a loss you hope

will not happen.

• Eg. car accident.

• Assurance• Protection against a loss you know

will happen.

• Eg. death.

1. Life Assurance2. Home Insurance3. Motor Insurance

4. Personal Insurance

Motor Insurance• Any person who operates a motor

vehicle must BY LAW take out motor insurance.

• The premium payable depends on various things such as:

• Drivers age -Size of car engineaddress

• Type of license - Previous accidents

• Insurance company’s offer a reduction in the premium each year if the insured has made no claims during the previous year. This is known as a no claims bonus.

No Claims Bonus• In car insurance you get a

discount if you do not claim for any accidents the previous year

• It encourages people not to claim for small amounts

There are two types of motor insurance:• Third party, fire and theft- This is the minimum motor insurance

required.- If you have a car accident, the

insurance company will only cover the damage done to the other car (the third party)

- They will not pay for the damage to your car or any injury you have suffered.

- However, they will compensate you if your car is stolen or is damaged by fire.

•

The second type of Motor Insurance is:

• Comprehensive- Most expensive car insurance.- The insurance company covers

everything, to all those who have suffered injury or damage, including the insured person who caused the accident.

Types of Personal Insurance

Medical Insurance• In case you get sick or need

an operation.

• The cost of your stay and medical care will be covered by insurance

• Eg: VHI • Voluntary Health Insurance

Personal Accident Insurance

• Covers people who are injured due to an accident.

• Lump sum payment for loss of finger, sight, hearing etc.

PRSI • Pay Related Social Insurance.

• Statutory Deduction from you salary.

• You will receive an income if you are out of work due to illness, disabiity, maternity leave…

Salary Protection• Provides an income in case

you can’t work due to illness.

• Will provide you with a higher income than PRSI only.

Holiday/Travel Insurance

• Provides you with health care if you get sick or have an accident on holidays.

• It also covers things like, lost baggage, delays, loss of money, emergency return home.

Risk Effects for Personal Insurance

Loading • Older, smoker, risky job

Discount• Younger, non-smoker, low risk job