WOW VI Personal Finance Insurance Why do we

WOW VI Personal Finance Insurance

Why do we Need Insurance? ? • To ‘Make Whole’ the person who suffers a loss. • To spread the RISK of loss across many policy holders. • A Necessary Evil

Actuary • An insurance employee who calculates premiums and risks based upon historical data. • Fantastic job, but very difficult to attain.

Risk • The PRODUCT of the likelihood of a loss AND the value of the loss. • High Probability X Low Value • Medium Probability X Medium Value • Low Probability X High Value

Liability • Something owed to another. • With Insurance, it’s Monetary. • “You break it, you bought it. “

Make Whole • Full compensation to the insured for the loss suffered. • To ‘Clear’ a Liability • Insurance compensation is monetary, it pays to fix or replace whatever is lost.

Premiums • Periodic payments made to the Insurer for insurance coverage • No Payment = No Insurance. • DO NOT miss a payment!!!

Types of Insurance • Auto • Collision, • Health • Major Medical, Comprehensive • Dental, Vision, Homeowner • Fire, Flood, Hurricane, Liability, Theft Pharmacy • Life • Term, Whole

Collision • Auto insurance to compensate for losses due to a collision. • Insurance prefers ‘Collision’ to accident, as 99. 9% of accidents can and should be avoided.

Comprehensive • Auto insurance to compensate for losses NOT due to a collision. • Includes: theft, vandalism, falling objects, fire, water, or natural disasters.

Uninsured Motorist • Insurance coverage for losses from a driver who does not have insurance. • Covers physical damage, bodily injury, and car repairs.

Oregon Insurance Minimums • $25, 000 for individual bodily injury • $20, 000 for personal property • $50, 000 in bodily injury to others