PF Vocab Unit 3

Warranty

a written guarantee from the manufacturer or distributor specifying the conditions under which the product can be returned, replaced, or repaired

Service contract

agreements between a business and a consumer to cover the repair costs of a product

Leasing

a contractual agreement with monthly payments for the use of an automobile over a set time period, typically three, four, or five years

Capitalized cost

the price of the vehicle

Money factor

the interest rate being paid on capitalized cost

Payment schedule

the amount paid monthly and number of total payments

Residual value

expected value of vehicle at end of lease

Sticker price

suggested retail price

Invoice price

dealer's cost and is less than sticker price

Lemon laws

require a refund for the vehicle after the owner has made repeated attempts to obtain servicing

Depreciation

loss of value due to time

Mediation

involves the use of a third party to settle grievances

Arbitration

a settlement of a difference by a third party the arbitrator whose decision is legally binding.

Small claims court

settles legal differences involving amounts below a set limit and employs a process in which the litigants usually do not use a lawyer

Class-action suit

taken by a few individuals on behalf of all the people who have suffered the same alleged injustice

Legal aid society

one of a network of community law officers that provide legal assistance to consumers who cannot afford their own attorney

Lease

a legal document that defines the conditions of a rental agreement

Condominium

individually owned housing units in a building with several such units

Cooperative housing

a form of housing in which the units in a building are owned by a nonprofit

Zoning laws

restrictions on how the property in an area can be used

Counteroffer

indicates a willingness to negotiate a price

Earnest money

a portion of the price of a home that the buyer deposits as evidence of good faith

Contingency clause

states that the agreement is binding only if a certain event occurs

Mortgage

a long-term loan on a specific piece of property, such as a home or other real estate

Points

prepaid interest charged by the lender

Amortization

the reduction of a loan balance through payments made over a period of time

Adjustable-rate mortgage

a home loan with an interest rate that can change during the mortgage term due to changes in market interest rates

Closing costs

fees and charges paid when a real estate transaction is completed

Title insurance

insurance that, during the mortgage term, protects the owner or the lender against financial loss resulting from future defects in the title and from other unforeseen property claims not excluded by the policy

Deed

a document that transfers ownership of property from one party to another

Escrow

money, usually deposited with the lending financial institution, for the payment of property taxes and homeowner's insurance

Insurance

protection against possible financial loss

Insurance company

a risk-sharing firm that assumes financial responsibility for losses that may result from an insured risk

Insurer

an insurance company

Policy

a written contract for insurance

Policyholder

a person who owns an insurance policy

Premium

the amount of money a policyholder is charged for an insurance policy

Coverage

the protection provided by the terms of an insurance policy

Insured

a person covered by an insurance policy

Risk

chance or uncertainty of loss

Peril

the cause of a possible loss

Hazard

a factor that increases the likelihood of loss through some peril

Negligence

failure to take ordinary or reasonable care to prevent accidents from happening

Deductible

the set amount that the policyholder must pay per loss on an insurance policy

Liability

legal responsibility for the financial cost of another person's injuries

Homeowner's insurance

coverage for a place of residence and its associated financial risks

Household inventory

a list or other documentation of personal belongings, with purchase dates and cost information

Personal property floater

additional property insurance to cover the damage or loss of a specific item of high value

Umbrella policy

supplementary personal liability coverage

Medical payments coverage

insurance that covers medical expenses for people injured in your home

Endorsement

an addition of coverage to a standard insurance policy

Actual cash value

a claim settlement method in which the insured receives payment based on the current replacement cost of a damaged or lost item, less depreciation

Replacement value

a claim settlement method in which the insured receives the full cost of repairing or replacing a damaged or lost item

Financial responsibility law

state legislation that requires drivers to prove their ability to cover the cost of damage or injury by an automobile accident

Bodily injury liability

coverage for the risk of financial loss due to legal expenses, lost wages, and other expenses associated with injuries caused by an automobile accident for with the insured was responsible

Medical payments coverage

automobile insurance that covers medical expenses for people injured in one's car

Uninsured motorist protection

automobile insurance coverage for the cost of injuries to a person and member of his or her family caused by a driver with inadequate insurance or by a hit-and-run driver

Property damage liability

motor vehicle insurance coverage that protects a person against financial loss when that person damages the property of others

Collision

motor vehicle insurance that pays for damage to the insured's vehicle when it is involved in an accident

No-fault system

a motor vehicle insurance program in which drivers involved in accidents collect medical expenses, lost wages, and related injury costs from their own insurance companies

Assigned risk pool

consists of people who are unable to obtain motor vehicle insurance due to poor driving or accident records and must obtain coverage at high rates through a state program that requires insurance companies to accept some of them