1. Insurance Take Charge of Your Finances 1.10.1.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

12. 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