Front

What is the main purpose of insurance?

Back

To reduce risk.

Front

What is the term for the amount you must pay before the insurance company will pay anything?

Back

Deductible.

Front

How do insurance companies ensure profitability?

Back

By balancing premium collection with claim payouts and investments.

Front

What type of insurance is the minimum required by law that only repairs the vehicle you hit?

Back

Liability.

Front

If your renter's insurance policy has a $500 deductible and your laptop worth $1,200 is damaged, how much will the insurance company pay?

Back

$700.

Front

What is the definition of 'premium' in insurance?

Back

The amount paid for an insurance policy.

Front

What does 'coverage' refer to in an insurance policy?

Back

The extent of protection provided by the insurance policy.

Front

What is 'liability insurance'?

Back

Insurance that provides protection against claims resulting from injuries and damage to people or property.

Front

What is the difference between 'collision' and 'comprehensive' insurance?

Back

Collision insurance covers damage to your vehicle from a collision, while comprehensive insurance covers non-collision-related incidents.

Front

What is a 'policy' in the context of insurance?

Back

A contract between the insurer and the insured outlining the terms of coverage.