1. Insurance Basics (Don’t Risk It)

2. What is Insurance?
Risk management tool that limits financial loss due to illness, injury or damage in exchange for a premium
Shared Risk- Insurance company collects premiums from several people and use these premiums to pay losses of another policyholder.

3. Insurance Terms
Premium – regular payment you make to an insurance company
Policy – legal contract you sign when you buy insurance
Policy holder – what you become when you buy insurance
Claim – formal request for payment from an insurance company
Risk - the chance that you will suffer a financial loss

4. Insurance Terms
Grace Period - if you do not pay your premium before the due date, you have no insurance
Underwriter – Employee of an insurance company who evaluates risk and assigns premium amounts.
Key factors: age, gender, and health
Insurance Agent –representative of an insurance company who sells insurance contracts and provides customer services.

5. Insurance Terms
Actuary – a person with advanced math training that calculates the risks based on loss percentages and determines insurance rates and premiums
Probability –the chance that something happening or not happening within a certain number of occurrences

6. Insurance Terms
Liability – the section of the property policy that pays for damages that you may have unintentionally caused; it also pays for personal damage or injuries to others
Comprehensive – auto insurance coverage that pays you if your car is stolen or for any acts of nature
Collision – auto insurance coverage that pays you to fix your car if you are at fault of an accident or the other guy doesn’t have insurance
Uninsured motorist –a person that does not have insurance

7. Insurance Terms
Discount – Good driver, good student, member and multiple policies are things that can bring down the cost of insurance
Deductible – a clause in your insurance policy that states that you will pay for a specific amount of claim before the company pays
Financial responsibility – Being able to pay for the damage you are legally liable for
Appraisal – an expert’s determination of the value of a piece of property
Rider – a special addition to an insurance policy that covers a specific type of loss (such as jewelry, guns, etc.)

8. Types of Insurance
Property Insurance (protection from financial loss when things you own are stolen, damaged, or destroyed)
Liability Insurance (protects you from loss that you cause others)
Personal Insurance -Health and Life (protects you and your family from loss due to illness, disability, or death)

9. How Does an Insurance Company Set Premiums?
Based on data about past losses and their costs

10. Automobile Insurance--
Types of Coverage
Bodily injury liability coverage
Property damage liability coverage
Medical payments coverage
Uninsured/underinsured motorist coverage

11. Liability Insurance
Pays for someone else’s property or injuries if you are liable, or at fault, in an accident
Every driver in Mississippi must carry liability insurance – state law
Minimum liability amounts in an auto insurance policy are:
$25,000 for bodily injury per person
$50,000 for bodily injury per accident
$10,000 for property damage
Referred to as 25/50/10
Before you get in an accident, you may wish to carry more than the minimum.
How many cars on the road today cost more than $10,000?

12. Comprehensive Insurance
Pays you if your car is stolen or damaged by basic acts of nature (hail storm, fire, wind, flood, etc).
Collision coverage
Pays to fix your car whether you are at fault or not if other person has no insurance.
Deductible – comprehensive and collision carries an amount you pay before the insurance company pays anything
The higher the deductible the lower your premium.
If you have an auto loan, you must carry comprehensive and collision insurance.

13. Factors Affecting your Premium
Driver classification (age, gender, and marital status)
Rating territory
Driving record (accidents and traffic violations) (“Points” added for these will increase your premium by about 10 percent. Too many points and your company will drop you.)
Type of car
Claims history
Your grades – “good student discount”

14. Steps You Can Take to Minimize Your Cost of Insurance
Have a good driving record
Choose a less expensive car
Good grades and
driver’s education training

15. Why Does My Insurance Premium Continue to Increase?
Cars are more expensive to repair
Litigation involving medical injuries

16. Claims
If you’re in an accident and your car is “totaled” most insurance companies pay the Actual Cash Value (ACV) or book value of your vehicle.
Book value determined by:
Kelly’s Blue Book
NADA
Market value – is amount items are worth now (not what you owe)
Replacement value – is cost of replacing regardless of value

17. What do I do if I get into an Accident?
Make sure everyone in your car is OK
Check the other car to see if they are OK
Call the police
Get the following information from the other driver: name, address, telephone number, license plate number, drivers license number, insurance information
Give the same information to the other driver
Get the name and phone number of any witnesses
Keep a disposable camera in your car and take accident pictures
Call your insurance agent as soon as possible

18. What about giving others my keys?
Did you know that if your friend wrecks your car, the accident is on you?
You are responsible for who drives your car
As far as your insurance company is concerned, the accident will go on your insurance record and you will pay the charges even if your friend has insurance
Be careful who you give your keys to