Learning the basics of insurance
Every day we take risks-and most of them we don't even think about. We cross a street, drive a car, eat at a fast food restaurant, chew on a pencil, take a shower, or climb a flight of stairs. There is some risk in all of those activities. For most of our daily risks we accept the risk and figure we can deal with it if things don't go the way we expect them to.
However, what if you're driving and hit a patch of ice? It may wreck your car, take out somebody's fence, and hurt you. Those three things can get expensive. Without insurance, you have to pay to replace the car, get the fence fixed, and pay your medical bills.
Another option is to transfer that financial risk to an insurance company. If everyone you knew had a car with the same value as yours, and everyone chipped in to pay to replace your car, nobody would have to put in very much. That's how insurance works-but you put the money in first. Everybody pays in a little so that the few people who have big losses don't have to handle it themselves. You never know when it will be your turn to deal with a loss.