Unit Six Insurance: Your Protection. Questions to be Answered: . Why have insurance? What is risk management? How can you keep your insurance cost down? What are the basic types of auto insurance? When should you take financial risk and when should you avoid them?
INSURANCE: protection against large-scale financial loss. With a relatively small payment – premium – you’re protected against big financial setbacks.
INSURANCE PREMIUM: the payment you make to an insurance company in exchange for its protection. Paid monthly, quarterly, semi-annually or annually.
DEDUCTIBLE: the amount of the loss you must pay out of your own pocket before the insurance company begins to reimburse you. Can be from $100 - $1000 or more. The higher the deductible, the lower your premium.