Expected Value: Spinners
Insurance Vocab
Insurance Tables (math)
Car insurance
100
The probability of $10 is 0.2, the probability of $3 is 0.4. What is the probability of -$4?
0.4
100
What is...
"the chance that an unexpected event could cost money"
financial risk
100
What is the probabiltiy of a major crash?
0.012
100
What type of coverage would you use?
You get into an accident and it is the other driver's fault. Your car has significant damage, but they tell you they forgot to pay their car insurance for the last year.
Uninsured motorist
200
The probability of $10 is 0.2, the probability of $3 is 0.4., and probability of -$4 is 0.4. What is the expected value?
$1.60
200
What is...
"Money paid to an insurance company"
premium
200
What is the expected cost for the insurance company, if the drivers match this probability table?
$970
200
What type of coverage would you use?
Your car was hit by lightning and there is $5,000 in damage.
Comprehensive
300
The $15 section is 1/8 of the circle. What is the probability of landing on -$1?
0.625 (or 5/8)
300
What is...
"The maximum the policy will cover"
limit
300
The expected cost of a policyholder is $970.
The insurance company is going to set premiums at $1560 per year. How much will they expect to profit from each policyholder?
$590
300
What type of coverage would you use?
You rear-ended another car on the freeway and caused damage to their car.
Liability
400
The $15 section is 1/8 of the circle.
What is the expected value?
$0.50
400
What is...
"the amount you must pay before insurance pays anything"
deductible
400
The insurance company expects to profit $590 from each customer.
The insurance company has 800 policyholders. How much do they expect to earn in profit, total, in the next year?
$472,000
400
What kind of car do I drive?
Honda Civic
500
If you spin this spinner 100 times, how much would you expect to make?
$50
500
What is...
"the contract between you an the insurance company"
policy
500
Is this profit guaranteed? Explain why or why not.
NO!
500
What type of coverage would you use?
You rear-ended another car on the freeway and caused damage to your own car.
Collision