COA Chapter 8 insurance
Order by
53 terms
Terms | Definitions |
|---|---|
 insurance | financial agreement between individuals and insurers to provide protection form loss or injury. |
| premiums | payments to an insurer |
| actual risk | risk an insurance underwriter takes in exchange for premiums |
| personal risk management | process of identifying and evaluating risk faced by individuals and families. |
| pure risk | risk that has a threat if loss without possibly of gain |
| speculative risk | risk that has the possibility of fain and loss |
| exposures | sources of risks (example: driving) |
| perils | events that cause financial loss |
| liabilities | claim on the assets of a business, organization, or individual |
| property risk | individuals that own, rent, or use property are exposed to the risk that the property may be damaged, destroyed or stolen |
| liability risk | individuals can be held legally liable for a number of reason, ranging from personal act that cause bodily harm or property damage to others to liability from the negligent use of boats or cars. |
| agent | represents the insurer and acts on the insurers behalf |
| pooling | spreading of loss of a few over an entire group |
| policy | contract between individuals or group and insurer. |
| declarations | description of what is being insured |
| exclusions | items insurers will not pay for |
| agreements | description of extended coverage |
| conditions | obligations imposed on policyholder and insurer |
| endorsements | amend or add to a policy |
| deductible | amount policy holder pays toward a loss before insurance coverage beings |
| coinsurance | sharing of an insurance risk between two or more insurers |
| steps of insurance management | o Awareness o Action o Analysis o Evaluation? |
| property insurance | pays for losses to homes and personal property due to a number of causes |
| liability insurance | Pays for losses from negligence resulting in bodily injury or property damage to others for which policyholders is responsible. |
| homeowners insurance | protects you from the cost of damage to your home. o Most important feature is the replacement cost coverage |
| limited name perils | usual basic perils covered by insurance |
| broad names perils | extended perils coverage o Keeps it at a minimum cost |
| renters insurance | covers major perils, provides liability protection and additional living expenses; form HO-4 o Inexpensive but less than half Americans use it |
| personal auto policy PAP | legal liability arising out of the ownership or operation of covered auto. o Liability coverage is the most important part |
| single limit | auto insurance pays up to a stated amount |
| split amount | auto insurance coverage is split between 3 categories |
| medical payment coverage | pays for reasonable medical, dental, x ray, surgical, and funeral expensed by a covered persons within 3 years from the date of accident. |
| uninsured motorist coverage | pays for bodily injury caused by an uninsured motorist or hit and run driver or negligent driver with an insolvent insurer. |
| collision | violent striking of an auto by another object |
| umbrella policy | provides liability coverage over a million dollars at a cost of 200-400 dollars a year o Goes into effect after underlying liabilities policy coverage limits have exceeded. o To protect against the possibility of a large jury award in a lawsuit |
| managed care | a prepaid plan that combines financing and delivery of health care (private health insurance) |
| health maintenance organization HMO | type of managed care that provides all of ones health care for a fixed monthly fee. *most popular |
| preferred provider information PPO | type of managed care that provides health care services to employees at a discount. |
| point of service organization POS | type of managed care that combines traditional insurance with HMOs |
| co-insurance | two companies sharing the risk |
| employers won't buy ____ insurance | home and auto |
| life insurance | contract between an insurer and policyholder specifying a sum to be paid to a beneficiary on the insured death o More IMP when its deducted o 5 to 10 years is the most popular type |
| face amount | stated sum of money on a policy |
| beneficiary | recipient of policy proceeds of insured dies. o Must be paid ASAP, insurance cant hold it. |
| whole life insurance | policy that combines insurance with a savings feature |
| term life insurance | policies that offer pure protection, no savings feature, over a specified period of time. |
| universal life insurance | flexible type of policy that combines term life insurance with a tax deferred savings account. |
| variable life insurance | policy that allows for flexibility in types of investments |
| long term care life insurance | not an investment, its set up to care of people. Usually old age (assistant care) singles usually buy, middle class to upper class can afford it, poor cant |
| in US the single, largest line of property and liability insurance is | automobile insurance |
| connection between risk management and insurance | most people rely heavily on insurance as the main way to handle risk |
| individuals become insured when | they sign a contract called a policy |
| most important feature of home owners insurance | replacement cost coverage |
First Time Here?
Welcome to Quizlet, a fun, free place to study. Try these flashcards, find others to study, or make your own.