Management and Organizational Studies 2277A/B Chapter Notes - Chapter 8: Home Insurance, Mortgage Loan, Insurance Policy

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2277A/B
• Professor: Barry Hawn

Document Summary

Primary function of insurance is to maintain your existing level of wealth by protecting you against potential financial losses or liability as a result of unexpected events. Benefit even if the insurance company isn"t paying you because you will have peace of mind that your assets are protected. Consider actions that expose you to a financial loss. E. g. owners are exposed to a financial loss if their property is not properly maintained. E. g. purchase a small home instead of a large one, reduce exposure to illness by taking care of your health. Feasible when the likelihood of financial loss low and the extent is very small. Many people choose to accept risk rather than purchase insurance because they don"t feel as much satisfaction. Insurance premium - the cost of obtaining insurance. Obliged to cover claims as described in the insurance policy. Price insurance premiums in relation to the likelihood of the event occurring and the size of liability.