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Explain the purpose of a contract with reference to a policy - short term insurance?
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What is the purpose of a contract?
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∙ 16y ago
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What is the basic purpose of insurance?
What is the basic purpose of insurance
What is the purpose of policies?
An insurance policy is a contract between an insurance company and the person purchasing the policy (or the insured). The policy costs a specified amount and if all premiums are paid in a timely manner, once the insured has died, their beneficiary (who whomever they name) will be paid a sum of money.
What is the purpose of contract review?
The purpose of contract review is to ensure that all parts of the document are logically sound. This can include implied agreements, along with the actual agreement. All related information must make sense as well, while facilitating the needs of all parties involved.
Explain underinsurance and the implications of underinsurance?
In a word... Co-insurance penalty. Not every property insurance policy has a co-insurance clause, but most do, and it is one of the least explained but potentially most important things policy holders should understand. The co-insurance clause is represented by a percentage - 80% or 90% are common. This percentage represents the amount of coverage you are required to carry in relation to the replacement cost of the property insured. For instance, if have a warehouse of stock worth $1,000,000 and a property insurance policy with an 80% co-insurance clause, you would need $800,000 of coverage to be compliant. The co-insurance clause only becomes relavant at the time a loss occurs. At that point the insurance adjuster must determine if you adequately insured, to the co-insurance requirement. The formula to determine co-insurance is as follows: Coverage Carried / Coverage Required x Amount of Loss For example, suppose you had an inventory worth $1M and only carried $500k of insurance, with a 90% co-insurance requirement. You have a devastating fire and suffer a loss to half your inventory. Co-insurance would work like this: 500,000 / 900,000 x 250,000 = 138,889 The $138,889 is the amount your insurance company is obligated to pay you. Does seem like craziness? You paid for $500,000 of coverage any only got $138,000? Let me further explain.... Believe it or not, the purpose of co-insurance is to keep things fair for the insurance company. Most consumers and business owners know that the odds of them ever having total loss - that is the entire sum of their property destoyed - is extremely low. Many insured only want to buy enough coverage for what they perceive is their average potential claim. The problem is, they also want the policy to provide coverage on a replacement cost basis. Insurance companies, for their part want to insure the property for its entire replacement cost - for real estate this is the cost to rebuild the structure; for stock or personal property it is the cost to replace old with new. The purpose of property insurance is to protect the policy holder from the possibility of a complete and total loss. Co-insurance is an in-elegant way of forcing policy holders to insure their stuff for its full replacement value in the event of that total loss occuring. Now, what if you don't want to insure your stuff for replacement value? No problem, just buy a policy that pays on actual cash value basis. Or, find a policy with no co-insurance clause built in (expect to pay more). Or, use something called "blanket" insurance to eliminate the possibity of a co-insurance penalty. Don't let all this scare you though. In the real world of claims adjusting, co-insurance doesn't come up all that often. Policies often have clauses built in to accomodate seasonal fluctations of inventory values. Buildings are typically inspected to determine an estimated replacement cost. However, as the policy holder it is still your responsibility to ensure the policy coverage limit is appropriate to prevent a co-insurance penalty.
Which of tge following best explain tge purpose of protectionist trade policies such aa tariffs and subsidies?
They allow producers to sell products more cheaply than foreign competitors
What is the purpose of a reference point?
A reference point helps to explain why we are, where we are.
What is the purpose of insurance?
An insurance policy is a contract of Indemnity. It is a means of transferring risk of financial loss and or financial liability to another party, Namely the insurance company.
What is the purpose of a disclosure statement in the life insurance policies?
To explain features & benefits of a proposed policy to the consumer
Which type of insurance contract requires a lumps or periodic payment in exchange for receiving periodic payments from the insurance payment?
Whole Life, Universal Life, as well as Annuities can be used for this purpose.
What is the basic purpose of insurance?
What is the basic purpose of insurance
Which type of insurance contract requires a lump-sum or periodic payment in exchange for receiving periodic payments from the insurance payment?
Whole Life, Universal Life, as well as Annuities can be used for this purpose.
Which type of insurance contract requires a lump-sum or periodic payment in exchange for receiving periodic payments from the insurance company?
Whole Life, Universal Life, as well as Annuities can be used for this purpose.
Can someone legally bind someone else by a contract?
Yes. That is the purpose of a contract although you haven't included the details.Yes. That is the purpose of a contract although you haven't included the details.Yes. That is the purpose of a contract although you haven't included the details.Yes. That is the purpose of a contract although you haven't included the details.
What is the purpose of insurance policies?
An insurance policy is a contract between an insurance company and the person purchasing the policy (or the insured). The policy costs a specified amount and if all premiums are paid in a timely manner, once the insured has died, their beneficiary (who whomever they name) will be paid a sum of money.
Can they repossess your car even if you have been making all the payments?
They can only LEGALLY repo your car IF you are in DEFAULT of the contract. That could be no payments, no insurance, using the car for an illegal purpose, ect. Is there any requirements in your contract that you may have not met? If you are NOT in default of the contract, call an attorney NOW. Good Luck
What is the purpose of receivables insurance?
The purpose of receivables insurance is to get insurance for your company and keep it safe. Insurance is very important in many aspects in life and recivable insurance is great for companies.
What is the purpose of a reference solution?
Please indicate what you mean by a reference solution.
