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52 terms

Insurance (Unit 9)

STUDY
PLAY
policyholder
the purchaser of insurance
policy
written contract between policyholder and insurance company
Indemnity/insurable interest
something of value that if lost, would cause you financial harm. Market value vs. replacement value.
premium
payments made in exchange for coverage
deductible
set amount a policyholder must pay before insurer will begin making payments
claim
request for payment of loss
Floater/rider/endorsement
attachments to a policy (additional coverage for a specific item)
co-payment
amount you pay for cash visit, regardless of total bill (usually $20 or $40)
selecting an insurance company
individual vs. group policies through an employer, independent vs. corporate agent, local vs. national companies, quotes available over telephone, internet, or mail, established vs. new companies
deciding how much to buy
depends on your specific needs
factors affecting premium
age, gender, marital status, geographic location, past history/lifestyle, risk level, preventative measures (smoke detectors, alarm system)
legal requirements of auto insurance
your car must be covered (20, 40, 15), you have proof of insurance in car at all times, insurance stays with the car, NOT driver
$20,000 auto insurance
covers injury or death of one person in an accident
$40,000 auto insurance
covers injury or death of more than 1 person in an accident
$15,000 auto insurance
covers damage to property of another person
collision coverage
damage to your own vehicle from and accident
comprehensive coverage
loss or damage to a vehicle not from an accident (theft, vandalism, fire, hail)
liability coverage
covers injury you cause to others or their property. Required by law.
medical payment coverage
injury to you or others from an accident
uninsured/underinsured motorist
in case the driver isn't covered
Needs for newer or more valuable cars
collision and comprehensive coverage recommended
needs for older cars
as coverage goes up, so do premiums. Pick the lowest deductible that you are comfortable with. Coverage amount should not be more than what you feel appropriate.
what to do in an accident
call police immediately to report it, get a copy of the report, exchange info with other driver(s), don't discuss details of the accident, call insurance agent ASAP after the accident to file a claim, get any other assistance you need (doctor, lawyer, etc.)
property insurance
insures property against fire and theft
real property
land and buildings
personal property
moveable objects
liability
protection against losses to others
peril
cause of loss
renter's insurance
don't insure the building, just the contents (you don't own the buildings)
personal property inventory
be as detailed as possible, include photos and receipts of valuables/irreplaceables, keep list accurate and updated, list items room-by-room, don't forget garage, shed, and other storage areas, keep list safe in safe deposit box/other secure area
80% Rule
companies will not fully cover the cost of damage to a house due to the occurrence of an insured event (fire, flood), unless the homeowner has purchased insurance coverage that is equal to at least 80% of the house's total replacement value
term insurance
protection for a specific amount of time (1,5,10 years), very cheap, must be renewed at the end of the period or it will expire, may require a physical exam, premium may change when it is renewed
whole life insurance
coverage for the rest of your life premium set when policy is purchased and never changes
Endowment insurance
investment insurance
beneficiary
person who receives amount of policy
cash value
value of policy if you cancel it, you may get some or all of it returned to you, you may be able to borrow against the cash value
face value
original amount of the policy
exclusion
specific conditions not paid for
death benefit
what beneficiary receives, can be all at once or spread out overtime
guaranteed renewability
can renew a term insurance policy without having to take another physical exam
medicaid
federal/state program offering low-income families medical care
medicare
federal program offering senior citizens and disabled individuals medical care
co-insurance/shared risk
you share cost of claim with insurance company
pre-existing condition
medical condition that was known/existed before you took out a policy
worker's compensations
covers injuries that occur on the job, different in each state, employers pay premiums, employees receive partial payment of full income until they can work again, by receiving this, employee cannot sue employer
prescription drugs
usually covered by policy
generic drugs
may not be covered by some policies, much cheaper if you pay out-of-pocket
over-the-counter-drugs
drugs available without prescriptions, usually not covered by policies
reasonable and customary charges
the going rate for charges in your geographic area, you might be asked to pay nothing beyond this charge if deemed unreasonably high
Health Maintenance Organization
least expensive plan, chosen doctors must be inside network, must have a primary car physician to choose your specialist
Preferred Provider Organization
chosen doctora can be outside of network, but will pay higher cost for those doctors, do not need a primary care physician, you can go to specialist on your own choosing, more expensive
Point-of-service (POS)
can be outside of network but will pay higher cost, must have a primary care physician, mor expensive