1. * Take Charge of Your Finances 1.10.1.G1
07/16/96
Insurance
Take Charge of Your Finances G1 *

2. Insurance
Method of spreading individual risk among a large group of people to make losses affordable to all

3. Risk Risk is the uncertainty about a situation’s outcome
Three Major insurable risks
Person
Property
Liability- legal responsibility to pay the cost of another person’s losses or injuries

4. How does it work?
Policy- a written contract describing the terms of an agreement between you and your insurance agent
Will include explanations of:
Coverage-protections provided by the terms of a policy
Premiums- fee a policy holder agrees to pay to be covered by an insurance company
Deductibles- specific amount of loss a policy holder pays before insurance will pay

5. Purpose of insurance
Provide relief from fear of severe financial loss due to hazards and events beyond your control
Hazard- a condition that creates or increases the likelihood of loss
Indemnification- Meant to get you back to same financial condition you were in before loss occurred
New home
Healthy

6. Types of Insurance Types of insurance can include: Automobile
Homeowners/Renters
Health
Life
Disability

7. Automobile Insurance
Automobile Insurance is an arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents

8. Four types of coverage for Automobile Insurance:
Liability Insurance covers the insured if injuries or damages are caused to other people or their property.
It is the minimum amount of insurance required by law for automobiles
If accident is your fault, insurance will not pay for your losses

9. Medical Payment insurance
Medical Payment Insurance covers injuries sustained by the driver of the insured vehicle or any passenger regardless of fault
It also covers family members injured as passengers or if injured as a pedestrian

10. Uninsured motorists insurance
Uninsured or Underinsured Motorists Insurance covers injury or damage to the driver, passengers, or the vehicle caused by a driver with insufficient insurance

11. Physical damage insurance
Physical Damage Insurance covers damages caused to the vehicle
Collision – covers damage to your vehicle from accidents you caused or not covered by other driver
Comprehensive – covers all physical damage losses except collision and other specified losses
Fire, theft, hail, vandalism

13. Factors that affect cost of Auto insurance
Probability-mathematics of chance used by insurance companies to set premiums
Includes:
Model, style and age
Driver classification
Age, gender, marital status, driving record
Stats- young, single more likely than over 25 married to be in an accident
Location of driver
Big Cities cost more
Purpose- work, get around town
Claims- request for reimbursement for a loss under the terms of an insurance policy