11. Insurance

🛡What Is Insurance?

Insurance is a way to protect yourself financially against big or unexpected losses (like car accidents, medical bills, or home damage). You pay a small amount now (called a premium) to avoid paying a large amount later.

💵Key Insurance Terms

• Premium – The amount you pay (monthly or yearly) to keep your insurance active

• Deductible – The amount you pay out of pocket before the insurance company covers the rest
  

  • Example: If your deductible is $500 and your bill is $2,000, you pay $500 and the insurer pays $1,500

  
  

• Coverage – The specific things your insurance policy protects against

• Claim – A request you make to your insurance company to pay for a loss

📄Types of Insurance

• Health Insurance – Covers doctor visits, surgeries, prescriptions, etc.

• Auto Insurance – Required by law in most states
  

  • Covers car accidents, injuries, and damage

  • Includes liability coverage for damage you cause to others

  
  

• Homeowners Insurance – Covers damage to your home and belongings (e.g., fire, theft)

• Renters Insurance – Covers your personal belongings in a rental home or apartment

• Life Insurance – Pays money to your family if you die, helping them cover costs

⚖Why Insurance Matters

• Prevents financial disaster

• Helps manage risk

• Gives peace of mind

• Required for certain things (e.g., driving a car, buying a house)