Class: Senior Secondary School 1 (SS1, SS 1, SSS1, SSS 1)
Term: 2nd Term
Week: 6
Age: 15 years
Duration: 45 minutes
Subject: Insurance
Curriculum Theme: Insurance Principles
Previous Lesson: Subrogation.
Topic: Contribution
Subject Matter: definition of contribution, conditions required for contribution to arise, how contribution may arise, application of contribution, methods and examples of contribution, modifications to the principle of contribution

Specific Objectives

By the end of the lesson, pupils should be able to:

Cognitive Domain:

Define the principle of contribution in insurance.
State the conditions required for contribution to arise.
Explain how contribution may arise in an insurance contract.
Identify different methods of applying contribution.
Describe modifications to the principle of contribution.

Affective Domain:

Appreciate the importance of the principle of contribution in ensuring fair claim settlement.
Participate actively in discussions related to insurance principles.

Psychomotor Domain:

Apply the principle of contribution to simple claim scenarios.

Work collaboratively with peers to understand complex insurance concepts.

Reference Materials

The following resources were used in planning this lesson:

National Senior Secondary Education Curriculum for Insurance.
State Unified Scheme of Work for Insurance SSS 1.
Olakunori, O.K. (2018). Comprehensive Insurance for Senior Secondary Schools. Abuja: Excellent Books.

Instructional Materials

The teacher will teach this lesson with the aid of:

Charts illustrating contribution scenarios.
Word cards displaying key terms.

Rationale for the Lesson

This lesson helps pupils understand how claims are settled when an insured person has multiple insurance policies covering the same risk. It is important for pupils to know this principle to understand fairness in insurance claims and to manage their own insurance needs effectively in the future.

Prerequisite/Previous Knowledge

Pupils are expected to have prior knowledge of basic insurance principles such as indemnity, subrogation, and utmost good faith.

Lesson Content/Board Summary

Contribution

Definition of Contribution

Contribution is an insurance principle that states that if an insured person has more than one policy covering the same risk, all the insurers must share the loss proportionately when a claim occurs.

Conditions Required for Contribution to Arise

For the principle of contribution to apply, the following conditions must be met:

There must be more than one policy covering the same subject matter.
The policies must cover the same peril or risk.
The policies must be taken out by the same insured person.
The policies must cover the same insurable interest.
The policies must be in force at the time of the loss.

How Contribution May Arise

Contribution usually arises when an insured person has over-insured a particular property or risk by taking out policies with different insurance companies, all covering the same subject matter and peril.

Application of Contribution

The principle of contribution is applied when an insured suffers a loss that is covered by multiple policies. The insurers will then contribute to the loss in proportion to their respective liabilities.

Methods of Contribution

The common methods used for calculating contribution include:

Independent Liability Method: Each insurer’s liability is calculated as if it were the only insurer, and then the actual payment is prorated based on these liabilities.
Pro-Rata Condition of Average (for property insurance): This method is often applied when the sum insured is less than the actual value of the property, but it also helps in distributing liability among multiple insurers.

Modifications to the Principle of Contribution

Sometimes, the application of contribution can be modified by specific clauses in insurance policies. These include:

Excess Clauses: A clause stating that the insured must bear the first part of any loss. If multiple policies have excess clauses, these are usually applied before contribution.
Non-Contribution Clauses: A clause stating that an insurer will not be liable for any loss that is covered by another policy. Such clauses can lead to disputes but are generally overridden by the principle of contribution unless specifically worded to exclude liability entirely.

Teaching Methods/Instructional Techniques

Discussion, Lecture, Demonstration, Question and Answer, Visual Aids

Instructional Procedures

Step 1: Introduction

Time: 5 minutes
Teaching Skill: Set Induction
Teacher’s Activity: The teacher greets the pupils and reviews the previous lesson briefly. The teacher then asks pupils what they think would happen if someone insured their car with two different companies and the car got damaged. This question leads into the topic of contribution.
Pupils’ Activity: Pupils respond to the teacher’s questions and share their ideas.
Learning Point: Pupils are introduced to the concept of sharing liability among multiple insurers.

Step 2: Definition of Contribution

Time: 5 minutes
Teaching Skill: Explanation/Definition
Teacher’s Activity: The teacher explains the definition of contribution, emphasizing that it ensures no insured person profits from a loss by claiming from multiple policies for the same incident. The teacher writes the definition on the board.
Pupils’ Activity: Pupils listen attentively, take notes, and ask questions for clarity.
Learning Point: Pupils understand the meaning and purpose of the principle of contribution.

Step 3: Conditions Required for Contribution to Arise

Time: 7 minutes
Teaching Skill: Elaboration/Listing
Teacher’s Activity: The teacher lists and explains each of the conditions necessary for contribution to apply, using a chart or word cards to highlight key terms like “same subject matter,” “same peril,” and “same insured.”
Pupils’ Activity: Pupils identify and note down the conditions for contribution.
Learning Point: Pupils know the specific criteria that must be met for contribution to be applicable.

Step 4: How Contribution May Arise

Time: 5 minutes
Teaching Skill: Explanation/Illustration
Teacher’s Activity: The teacher explains scenarios where contribution might arise, focusing on instances of over-insurance or accidental multiple coverage for the same risk. An example of insuring a house with two different fire insurance policies is used.
Pupils’ Activity: Pupils listen and understand the practical situations leading to contribution.
Learning Point: Pupils can identify situations where contribution becomes relevant.

Step 5: Methods of Contribution

Time: 8 minutes
Teaching Skill: Demonstration/Calculation
Teacher’s Activity: The teacher explains and demonstrates the common methods of calculating contribution, such as the Independent Liability Method, using a simple numerical example on the board or chart. The teacher guides pupils through the calculation steps.
Pupils’ Activity: Pupils follow the examples, ask questions, and attempt simple calculations.
Learning Point: Pupils learn how to apply the principle of contribution to share losses proportionally.

Step 6: Modifications to the Principle of Contribution

Time: 5 minutes
Teaching Skill: Explanation/Clarification
Teacher’s Activity: The teacher explains how certain policy clauses, like excess clauses and non-contribution clauses, can modify the standard application of the contribution principle. The teacher clarifies their impact on claim settlement.
Pupils’ Activity: Pupils listen and understand how policy terms can affect contribution.
Learning Point: Pupils learn about variations in the application of the contribution principle.

Step 7: Evaluation/Review

Time: 5 minutes

Teaching Skill: Questioning/Assessment

Teacher’s Activity: The teacher evaluates the learning by asking the following questions:

Define contribution in insurance.
List three conditions required for the principle of contribution to apply.
Explain how contribution may arise in an insurance contract.
Mention two methods used for calculating contribution.
State one modification to the principle of contribution.

Pupils’ Activity: Pupils answer orally and in writing.

Learning Point: Pupils demonstrate understanding of the lesson.

Step 8: Conclusion

Time: 5 minutes
Teaching Skill: Summarization/Assignment
Teacher’s Activity: The teacher summarizes the key learning points of the lesson on contribution and gives pupils an assignment to find examples of insurance policies that might involve the principle of contribution.
Pupils’ Activity: Pupils listen to the summary and copy the assignment.
Learning Point: Pupils reinforce their understanding and are encouraged to research further.

Lesson Keywords

Contribution – An insurance principle where multiple insurers share a loss proportionately.
Over-insurance – Having more than one insurance policy covering the same risk or property.
Pro-rata – Proportionate sharing based on the sum insured by each policy.
Excess Clause – A policy condition requiring the insured to pay the first part of a claim.
Non-Contribution Clause – A policy condition attempting to exclude liability if other insurance exists.

Differentiation

For pupils who grasp concepts quickly, the teacher will provide more complex scenarios for calculating contribution. For pupils who require more support, the teacher will offer simplified examples and provide one-on-one guidance during practical exercises.

Note for teachers using this lesson plan

Teachers should ensure to use real-life examples relevant to the pupils’ environment to make the concept of contribution more relatable. Visual aids like diagrams showing different insurance policies covering the same item will be very helpful. Encourage pupils to ask questions and participate in discussions to deepen their understanding.