Chapter 8 - Auto and Homeowner's Insurance Flashcards
Property Insurance
Ensures that any damages to your auto and home are covered, and that your personal assets are protected from any liability.
Health Insurance
Ensures that health care needs, such as physician, dental and vision care are covered.
Disability Insurance
Ensures that your monthly income will continue in the event that you are unable to work as a result of any injury or illness.
Critical Illness Insurance
Ensures that you have access to lump sum benefits in the even that you suffer a critical illness, such as a heart attack, stroke, life-threatening cancer.
Long-Term Care Insurance
Ensures that you have access to benefits that will help to cover added living costs, such as in-home nursing care, when you are unable to care for yourself due to injury or illness.
Life Insurance
Ensures financial support for dependents, other individuals, or charities when you die.
What is the primary function of insurance?
To maintain your existing level of wealth by protecting you against financial losses or liability due to unexpected events.
What are the Risk Management steps?
1) Recognize the risks to which you are exposed.
2) Decide whether to protect against those risks.
3) Decide on the amount of coverage you need and the policy provisions you require.
What are the risk management alternatives?
1) Avoid Risk
2) Reduce Risk
3) Accept Risk
4) Share Risk
When should you consider insurance?
1) High likelihood that an event will cause a financial loss
2) Potential financial loss from that event is huge
What does a high insurance premium indicate?
That you have a greater probability that you may use the insurance coverage provided.
What does Auto insurance insure against?
*The legal liability that may arise from causing death or injury to others.
*The expense associated with providing medical care to you, your passengers, and other persons outside your vehicle.
*The costs associated with damage to your automobile.
What are the three sections to auto insurance?
1) Third party liability coverage
2) Accident Benefits
3) Loss or damage to the insured automobile
Accident Benefits coverage
insures against the cost of medical care for you and other passengers in your car. (Mandatory in all provinces except Newfoundland and Labrador)
Uninsured motorist coverage
Insures against the cost of bodily injury when an accident is caused by another driver who is not insured.
