2. Financial Responsibility Law
A financial responsibility law says you
must pay for any damage or injury you
cause in an accident either with insurance,
with savings, or by selling property.
3. Compulsory Insurance Law
A compulsory insurance law legally requires
drivers to have a minimum amount of car
If you can’t show proof of insurance, you can
have your license or registration taken away
4. Basics of Automobile Insurance
Insurance is paid protection against
losses due to injury or property damage.
To get insurance, you have to purchase a
contract called a policy from an insurance
5. Basics of Automobile Insurance
The company that issues the policy is
called the insurer.
The buyer of the policy is called the
policyholder. Or insured
The insurance contract always between
two parties namely; “Insurer and Insured”
6. Basics of Automobile Insurance
Liability insurance protects you from
claims of bodily injury or property
damage to others in case you’re held
responsible for an accident.
7. Bodily Injury Liability
Bodily injury liability insurance covers
injuries to someone else that you are held
RIDERS- Add extra risk coverage/
8. Property Damage Liability
Property damage liability insurance covers
damage to another person’s vehicle or
other property that you are held
It also covers damage to property, such as road
side trees or street signs (Public Property).
The maximum amount covered is
based on the actual cash value of
your vehicle, which is the value of the
car when it’s new minus depreciation.
Depreciation is the decline in value of
a vehicle because of use.
13. Medical Payments Coverage
Medical payments coverage is also
called personal injury protection.
It covers injuries to you and anyone
else in your car when you are held
24. Additional Coverage
HO-2, the broad form, adds more
coverage to the HO-1.
This policy also covers damage from
falling objects, collapse of a building,
ice and snow, steam, water, and
25. Additional Coverage
HO-3, the special form, provides
maximum protection for the house
itself, with less coverage for contents
or personal property.
32. Life Assurance
1% of Saudi
adults have life assurance.
Life insurance provides
money for family members or dependents
when a wage earner dies.( breadwinner)
Dependent is a person who relies on someone
33. Difference between Insurance &
Protection against a loss you hope will not
E.g. car accident
Protection against a loss you know will
happen. E.g. Death
34. Life Assurance Terminology
Contract – policy which states the amount
to be paid to beneficiary upon death of
Beneficiary –recipient of policy proceeds if
the insured person dies.
35. Who Needs Life Assurance?
Not necessary if a person is single
with no dependents.
Necessary for people who have a
dependent spouse, dependent
children, an aging or disabled
dependent relative, or business
36. The Principle of Life Insurance
Mortality tables provide
odds on your dying, based
on your age and sex
Your premium is based on
the projections for the
payouts for persons who
37. LIFE ANNUITY
An annuity is a contract between you and
an insurance company to cover specific
goals, such as principal protection,
lifetime income, legacy planning or long-
term care costs.
Life annuities may be sold in exchange for
the immediate payment of a lump sum
(single-payment annuity) or a series of
regular payments (flexible
payment annuity), prior to the onset of the
38. Financial Planning with Annuities
What is an annuity?
a contract where you pay money in, and at
a certain date get regular payments back
during your lifetime
Why do people buy annuities?
to supplement retirement income and to
shelter income from taxes
How are annuities taxed?
income deducted and interest earned is not
taxed until you draw the money out
39. How does an annuity work?
An annuity works by transferring risk from
the owner, called the annuitant, to the
insurance company. Like other types of
insurance, you pay the annuity company
premiums to bear this risk. Premiums can
be a single lump sum or a series of
payments, depending on the type
40. Annuity is a Good Investment?
There is one thing an annuity does well,
which is to provide a hedge against
longevity risk (the risk of living far longer
than you thought you would). If you are
buying it for that reason, an annuity can
be a good investment.