Fundamentals of Insurance BC

What is the major function of insurance? - to allow the spread of risk What are the five important functions of insurance? - 1) insurance is the shifting of financial responsibility for a loss 2) payment will be made only in the event of an insured risk 3) the amount of payment is restricted to the amount required to indemnify the insured 4) insurance covers losses the object may be exposed to 5) the indemnity can be in the form of money or repair/replacement What are the three main types of insurance included in broad insurance (property and casualty) - Auto insurance property insurance liability insurance (Also known as general insurance) Identify the two major types of insurers - 1) private insurers 2)government insurers define how stock companies work compared to mutual companies - Stock companies exist to turn a profit Mutual companies exist to provide lower insurance rates for its policy holders What type of insurance involves government insurers - Mandatory auto insurance, such as ICBC