consumers education

Comprehending Consumer: Chapter Guide 12-14-Also Study Guide for the test on 5/14

Sticker Price  

Manufacturer’s listed price you see the car on sale for

Ex. A car dealership displays a vehicle with a price tag in the window, which is the sticker price

Invoice Price 

The amount that the dealer paid to buy the car from the manufacturer

Ex. A buyer negotiates a car price and learns the invoice price,

Extended Warranty  

Sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers

Ex. A customer buys a laptop and opts for an extended warranty to cover repairs for an additional two years

Security Deposit 

Money landlord holds to cover any damages to rental property 

Ex.  if a home or an apartment rents for $5,000 per month, the security deposit would also total $5,000.

Mortgage 

Loan to buy real estate, such as land or a house

Ex. A family takes out a mortgage to purchase their home, agreeing to monthly payments to the lender for 30 years.

Appreciation 

An increase in the value of an asset, like a house, over time.

Ex. A homeowner sells their house five years later for significantly more than they paid due to the property's appreciation in value.

Earnest Money  

Proof of your intention to buy at the agreed-upon price. 

Ex. A $300,000 home will require an earnest money deposit between $3,000 to $9,000.

Policy 

A contract outlining the terms and coverage of insurance or rules in place.

Ex. A person reads their car insurance policy to understand the coverage provided in case of an accident.

Premium  

The amount paid regularly for insurance coverage.

Appraisal  

An expert’s determination of the value of a piece of property. 

Ex. A person wants to sell a rare painting. They hire an art expert to conduct an appraisal.

Property Damage Liability Insurance 

Helps pay to repair damage you cause to another person's vehicle or property

Ex. A driver accidentally hits a neighbor’s fence. Their property damage liability insurance pays for repairing the fence.

Deductible 

The amoutn that you pay before the insurance company pays anything

Ex. After a storm damages their roof, a homeowner files an insurance claim and pays the $500 deductible before their policy covers the remaining repair costs.

Personal Insurance  

(3 Types of Ins.)

Coverage that protects individuals against financial loss due to unforeseen events, typically including life, health, and property insurance. 

Ex. A parent buys life insurance to provide financial security for their family in case of their death.

Collision Insurance 

Coverage for vehicle damage resulting from accidents.

Ex. If you end up spinning out and hitting a guardrail, your collision car insurance may cover the cost of repairs to your vehicle.

Claim 

A formal request for payment from the insurance company 

Ex. A homeowner's basement floods due to a burst pipe. They file a claim with their home insurance company to get reimbursed for the cost of repairs and damaged belongings.

Property Insurance 

Insrance that protects you from financial loss when things you own are stolen, damaged, or destroyed 

Ex. A business owner’s office is burglarized. Their property insurance reimburses them for the stolen equipment.

Property Damage Liability Coverage 

Pays for damage you caused to another person’s property 

Ex. While parking, a driver scrapes another car. Their property damage liability coverage pays for the other car’s repairs

Worker’s Compensation 

insurance that provides cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job.

Ex. An employee injures their back while lifting heavy equipment at work. Worker’s compensation covers their medical expenses. 

Medicare 

Health insurance program for people age 65 and above, or young people with disabilities 

Ex. A retired individual enrolls in Medicare to help cover hospital visits and medical treatments in their senior years.