Objective: Compare different types of insurance plans. Identify types of insurance plans,( home, car, health, life, ). How insurance works. Evaluate insurance plans based on different people’s situations.

 Insurance is essentially a contract between you the consumer (insured) and your company (insurer).  You the insured are betting that some type of accident may happen to you: illness, damage to your car or home, or damage to someone else’s due to negligence.  The insurance company on the other hand, is betting that you will not have such a problem. It bases its judgment on complicated formulas of probable RISK ( the amount an insurer stands to lose)

 A: Premium: money paid to the insurance company for a policy that covers you and your losses. The amount the insurance company pays out could be many times what you paid in premiums. ◦ 1. If you remain accident free- the company makes money. It uses part of that money to pay policy holders who do sustain some type of loss.

 B:Deductible: an amount of expenses that you must pay before the insurer will cover any expenses. For example: if your car insurance policy has a $1,000 deductible, you will have to pay the first $1,000 in damages yourself, then the insurance company will pay the rest, up to a certain point.  C: Copayment: The amount of money paid to a health provider (doctor, dentist, pharmacy) for a visit or prescription you pay out of pocket.

 Before buying any type of insurance, read the fine print and ask questions.  Find out if the policy covers replacement costs ( the amount needed to buy a new item to replace the lost, stolen, or damaged one).  The ACV (actual cover value) is what the item would have been worth on the market before the accident, theft or loss.  For example, if your 2 yr. old computer is stolen, its ACV is not nearly as much as it would cost you to buy a new computer because computers lose their value quickly.  Get estimates from several companies and compare before making a decision from which one to buy from.

 1. Collision insurance: covers damage to your vehicle regardless of who is at fault in an accident.  2. Comprehensive insurance: pays for other types of damage to your car, such as theft, broken glass, vandalism, and natural disasters.

 3. Liability insurance: covers property damage and bodily injuries to people who are not on your policy, as well as your court costs.  NOTE: The State of NC requires all drivers to carry liability insurance. ◦ If you buy automobile insurance in North Carolina, your policy must include minimum liability coverage of:  $30,000/$60,000 for bodily injury  $25,000 for property damage  $30,000/$60,000 uninsured/underinsured motorist bodily injury, and  $25,000 uninsured/underinsured motorist property damage liability.