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Insurance
Chapter 8 and 9
| Question | Answer |
|---|---|
| What are the four ways of risk management | 1. Avoid risk: To avoid driving related issues don't drive 2. Reduce risk: Drive slower in hazardous conditions 3. accept risk: Dollar amount of potential loss is lows 4. Transfer/ Share risk: Transfer risk from you to the insurance company |
| What is the main purpose of insurance | Is to maintain your existing level of wealth (don't suffer loss) |
| What is it called when you don't buy insurance | self-insuring |
| Definition of peril | A hazard or risk you may face (covered risk) |
| What are insurance premium | A cost of obtaining insurance often in the form of monthly, yearly, or semi yearly payments |
| What are the goals of insurance | only want insurance that you need and for the lowest cost possible |
| How to insurance companies work | They pool together several policies based of type and charcteristics of group |
| True or false Majority of policy owner never file a claim | true |
| What can cause your insurance to be higher | The risk of loss is high and the size of loss is high |
| What can cause your insurance to be lower | The risk of loss is low and the size of loss is small |
| A policy is a | contract between the insurance and the person being insured |
| What are the 3 main types of auto insurance | 1. Liability ( mandatory) 2. Collision (optional) 3. Comprehensive (optional) |
| Characteristics of liability insurance | You are legally responsible for and accident that causes injury or fatalities or damage to property ( insurance will cover you financially) |
| Direct Compensation Property Damage | Covers damage to your vehicle and / or contents in vehicle ere you are deemed not at fault and will be compensated from your insurance directly |
| What to do if person at fault doesn't have insurance | You sue your own insurance company to get damages covered |
| Collision insurance | Insurance compensates you for damages to your car |
| Whats the problem with collision insurance | The value of cars depreciate so the money received from insurance may no be enough |
| Comprehensive insurance | Covers everything that happen to your car theft, vandalism, natural damage, fire |
| Accident benefit | are in accident and insurance may cover a portion of income replacement, medical expenses, rehab, and funeral cost |
| Factor that impact your premium (auto) | ‣ How much you use your vehicle ‣ Value of your car ‣ Repair record of your car ‣ your location ‣ your driving training ‣ your driving record ‣ your age and sex ‣ Your driving distance |
| Homeowners insurance | Provides insurance in the event of property damage theft, or personal and third party liability relating to homeownership |
| What are the two types of perils | All perils coverage: protect the home and any other structure on the property against all events Names perils: protects the home and any other structure on the property on gainst only those named in the policy |
| Cash value | cash value replacement pays the value of the damage property after considering depreciation |
| preplacement cost policy | pays you the cost of replacing the damaged property with an |
Created by:
annajone
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