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Essay / Research Paper Abstract
This 6 page paper discusses the issue of indemnity and the way it impacts on instances and policy holders where there is underinsurance and a partial claim and the way in which policy holder may be treated with equity. The bibliography cites 4 sources.
Page Count:
6 pages (~225 words per page)
File: TS14_TEindemnity.rtf
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Unformatted sample text from the term paper:
losses against theft, fire and if specified against event such as hurricanes and floods, car insurance covers against the loss of a car though theft as well as damage caused
by others. In order to understand the way in which identity may operate where there is under insurance the term indemnity needs to be defined in terms of insurance. Morgan
Clark (2007) define it as "A policyholder is indemnified in situations where he/she is compensated in respect of a loss which they have sustained or is protected from legal liabilities
which they may have incurred. An indemnity is provided when a claim is accepted under the terms of a policy" (Morgan Clark, 2007). However there are some problem with insurance,
especially where a there is a case of under insurance. The insurance company will not be liable for all and every loss; there have to be limits due to the
risk as asymmetrical information and adverse selection (Howells and Bain, 2004). Insurance is often seen as a grudge purchase, those who buy insurance may often feel they do not want
to buy it, the reasons behind the purchase may be legal or contractual, or undertaken as a result of fear and the desire to self protect against. As this is
a product that is only of value where there is a claim many policies are seen as homogenous, despite firms attempts to differentiate them, the result is a high level
of price sensitivity on the part of the buyers. There are a number of approach which may be utilised in order to reduce the premiums that are payable. This
can include the use of brokers and shopping around, however, in order to lower premiums there may also be the tactic of under insuring with the aim of reducing the
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