Risks and Responsibilities in Insurance

What is insurance?

• A practice by which a company or government agency provides full or partial financial compensation for loss or damage caused by events beyond the control of the insured party in return for a premium.

• A legal document that outlines the terms and conditions of a particular agreement.

• A savings plan that allows individuals to save money for retirement.

• A government program that provides medical care to the elderly and disabled.

Why is it important to have insurance?

• Because it provides entertainment.

• Because it protects important things, such as a house, by paying the owner money if those things are damaged or destroyed.

• Because it is a legal requirement for all citizens.

• Because it guarantees a job for everyone.

Who can provide insurance?

• Only private companies.

• Only government agencies.

• Both private companies and government agencies.

• Only non-profit organizations.

Which of the following is an example of insurance provided by a private company?

• Public library services.

• Health insurance.

• Police services.

• Public schooling.

What did people do before the existence of insurance to help themselves when things went wrong?

• They relied solely on government support.

• Community members helped each other out.

• They took loans from the bank.

• They waited for natural recovery without any help.

Why do today's communities have limitations that prevent them from replacing the valuable luxuries that people have acquired, unlike in the past?

• Because today's communities are more close-knit.

• Because people are more dependent on each other today.

• Because it doesn't make sense for a community to replace valuable luxuries that people have acquired.

• Because community members prefer to use insurance.

When was the first insurance company formed and what was its purpose?

• 1752, to provide health insurance.

• 1668, to fight fires.

• 1800, to insure ships and cargo.

• 1900, to provide car insurance.

What would the first insurance company do if a neighboring property was on fire?

• They would fight the fire regardless of who owned the property.

• They would save the customer's property but not the house next door.

• They would provide financial compensation for all affected properties.

• They would rebuild the burned houses for both customers and non-customers.

Which historical figure started an insurance company that still exists today, and in what year?

• Thomas Jefferson in 1776.

• Benjamin Franklin in 1752.

• Alexander Hamilton in 1800.

• George Washington in 1789.

Is the decision not to get car insurance thrifty or foolish?

• Thrifty because it saves money

• Foolish because many car accidents are preventable

• Foolish because it is illegal to drive without automobile insurance

• Thrifty because car accidents are rare