| A | B |
|---|
| insurance | a contract to reimburse you for personal or financial loss |
| premium | the amount you pay over a period of time for the cost of insurance |
| deductible | an amount you must pay before the insurance company pays toward your loss |
| risk management | the use of various strategies to manage potential loss |
| main types of insurance | automobile, health, liability, life, property |
| liability | responsibility for an event or action |
| collision coverage | pays for damage to your car resulting from a collision with another vehicle or object, regardless of who is at fault |
| comprehensive coverage | pays if your car is damaged by events other than an automobile accident (i.e., theft, fire, hail, glass breakage, water damage) |
| liability coverage | required by the state of Texas, pays for injury or death of others from an accident in which you are judged responsible |
| medical payments coverage | pays the medical expenses resulting from accidental injury to you and any passengers in your car, up to your policy's limit |
| uninsured motorist protection | provides immediate payment for bodily injury to you and your passengers in your car |
| risk | uncertainty, lack of predictability |
| speculative risk | uncertainty about a loss or gain situation |
| peril | damaging events and phenomena |
| hazards | unsafe act or conditions which open the door to peril |
| risk avoidance | not taking action to eliminate risk of loss |
| loss prevention and reduction | taking direct action to reduce or eliminate forseeable perils |
| combination risk control | pooling assets and spreading the base of risk taking population |
| separation risk control | dispersing things of value so that they don't get destroyed in the same place at the same time |
| diversification risk control | varying your methods of control and your sources of pleasure, so that the loss of one would not impact the safety of the other |
| Benjamin Frainkin | Father of modern insurance |
