Personal Finance - Insurance

What is an insurance premium?

• Your monthly payment to your insurer, regardless of whether you use any services

• A list of the procedures covered by your insurance carrier

• An added cost you pay in order to receive higher-quality services

• The amount you pay out-of-pocket for a specific procedure or service

When setting your premium, your car insurance company may consider each of the following EXCEPT...

• How many miles you drive per year

• Your age

• Your driving record

• Your height

Insurance companies make money by...

• Refusing to pay out claims to policyholders

• Collecting money from the government

• Collecting more in premiums than they need to pay out each year

• Keeping costs low with minimal advertising

Which of the following statements is TRUE about auto insurance premiums?

• If you have an auto insurance policy and don't get into a car accident or file any claims for a year, you get your premiums back from the insurance company.

• If you have an auto insurance policy and get into multiple accidents within one year, your premium amount will decrease.

• Auto insurance premiums are a fixed price across all insurance companies.

• Auto insurance premiums can vary from company to company, therefore, it is important to comparison shop for the best price and coverage.

Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?

• $0

• $200

• $800

• $1,000

While parked on the street overnight, the passenger window in Sam's car was smashed by someone trying to break in. Which type of auto insurance coverage will help cover the cost to get the window replaced?

• Liability

• Collision

• Comprehensive

• None - typically insurance doesn't cover this!

Since doctors only accept specific health insurance plans, what should you do prior to selecting your own health insurance plan?

• Find an out-of-network doctor for a plan you’re interested in

• Check the list of doctors “in the network”

• Increase your premium amount to upgrade your coverage to include any and all doctors

• Decrease your co-pay amount

You cause an accident in which someone is injured. The case goes to trial and there is a verdict to compensate the injured person with $58,000. You have a $50,000 coverage limit per person for Bodily Injury. How much will you have to pay out-of-pocket?

• $8,000

• $58,000

• $0

• Only your deductible amount

Which person will probably have the LEAST expensive health insurance payments?

• Julian, age 57, who has been healthy most of his life

• Samantha, age 32, who is a smoker but hasn't shown any signs of health problems

• Patty, age 26, who works as an administrative assistant at a marketing firm

• Robin, age 72, who jogs 50 miles per week to stay fit

What type of auto insurance are you required to carry in almost every state (49 out of 50)?

• Insurance if you damage your own property

• Insurance if you cause injury to another person

• Insurance in case you get into an accident with someone who does not have insurance

• Insurance if you cause injury to yourself