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the purchaser of insurance


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.


payments made in exchange for coverage


set amount a policyholder must pay before insurer will begin making payments


request for payment of loss


attachments to a policy (additional coverage for a specific item)


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


protection against losses to others


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


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


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


federal/state program offering low-income families medical care


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


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

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