Finance Quick Answers
What is the point of having insurance?
Life is full of surprises. Fortunately, you can help protect yourself from some of the unpleasant ones with insurance. Insurance protects you by transferring the risk of huge losses to an insurance company. By paying a relatively small amount each year to the company, you can protect yourself from the risk of losing a lot of money in the future.
You will want to consider your needs and comparison shop when buying insurance. As you apply for insurance, be careful to review the application. Information that is omitted or misstated could make you look like a risk for the insurer. If information is misrepresented, the agent is unlikely to help you, your claim may be denied and your coverage canceled.
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri Extension
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
Last update: Monday, July 28, 2008