Lesson Notes By Weeks and Term - Senior Secondary 1

Hazard/peril II

Get it on Google Play
Get it on the Apple App Store
  1. Home
  2. Lesson Notes By Weeks and Term
  3. Senior Secondary 1
  4. Hazard/peril II

Term – 1st Term

Week: 11

Class: Senior Secondary School 1

Age: 15 years

Duration: 40 minutes of 2 periods each

Date:       

Subject:      Insurance

Topic:-       Hazard/peril II

SPECIFIC OBJECTIVES: At the end of the lesson, pupils should be able to

  1. Discuss the meaning and give examples of moral hazard
  2. State the relationship between risk, hazard and peril

INSTRUCTIONAL TECHNIQUES: Identification, explanation, questions and answers, demonstration, videos from source

INSTRUCTIONAL MATERIALS: Videos, loud speaker, textbook, pictures

INSTRUCTIONAL PROCEDURES

PERIOD 1-2

PRESENTATION

TEACHER’S ACTIVITY

STUDENT’S ACTIVITY

STEP 1

INTRODUCTION

The teacher reviews the previous lesson on hazard

Students pay attention

STEP 2

EXPLANATION

He discusses the meaning and gives examples of moral hazard

 

Students pay attention and participates

STEP 3

DEMONSTRATION

He states the relationship between risk, peril and hazard

 

Students pay attention and participate

STEP 4

NOTE TAKING

The teacher writes a summarized note on the board

The students copy the note in their books

 

NOTE

MORAL HAZARD

This is the attitude and conduct of the people insured in relation to risk. This can influence the occurrence of a loss. 

It is a situation where there is tendency to take undue risks because the costs are not borne by the individual involved in the risk. 

A moral behaviour may occur where the behaviour of one party leads to the detriment of another party, after a transaction has taken place. 

Moral hazard is the concept that individuals have incentives to alter their behaviour when their risk or bad-decision making is borne by others. 

Moral hazard is a situation in which one party engages in risky behaviour or fails to act in good faith because he knows the other party bears the economic consequences of their behaviour.

 

Examples of moral hazard include:

  1. An insured who obtained an insurance policy with the intention of causing the loss through his action to enable him to make claim from the insurance company.
  2. Submission of false or exaggerated claim.
  3. Deliberate or innocent misrepresentation of information.
  4. Carelessness. For example, failure to take reasonable care in preventing the loss from happening, such as poor maintenance of a vehicle leading to break failure.
  5. Comprehensive insurance policies decrease the incentive to take care of your possessions.
  6. Poor maintenance of employee relationship leading to sabotage, vandalism and willful damage through fire caused by factors such as low level of welfare packages or where employers failed to show concern as to the safety and well- being of their employees.

 

Relationship between risk, peril and hazard 

Hazards increase the risk of a specific peril. 

Risk is the chance of loss, and peril is the direct cause of the loss.

If a house burns down, then fire is the peril.

A hazard is anything that either causes or increases the likelihood of a loss. For instance, gas furnaces are a hazard for carbon monoxide poisoning.  Smoking is the hazard that increases the likelihood of a house fire and illness.

It is possible for something to be both a peril and a hazard. For example, sickness is a peril causing economic loss, but it is also a hazard that increases the chance of loss from the peril of premature death.

EVALUATION:    1. Explain the meaning of moral hazard

  1. Give three examples of moral hazard
  2. State the relationship between risk, peril and hazard citing an example

CLASSWORK: As in evaluation

CONCLUSION: The teacher commends the students positively