Presentation on theme: "Homeowners and Auto Insurance"— Presentation transcript:
1 Homeowners and Auto Insurance Chapter 22Homeowners and Auto Insurance
2 Risk-Management Methods Home and Motor Vehicle InsuranceChapter22Section 1Insurance and Risk ManagementRisk-Management MethodsMethods of Risk-ManagementRisk AvoidanceRisk ReductionRisk AssumptionRisk Shifting
3 Home and Motor Vehicle Insurance Chapter22Section 1Insurance and Risk ManagementTypes of RiskPersonal risks, property risks,and liability risks are insurable.Speculative risks are not insurable.
4 Planning an Insurance Program Home and Motor Vehicle InsuranceChapter22Section 1Insurance and Risk ManagementPlanning an Insurance ProgramSteps to Planning an Insurance Program4Review Your Results3Put Your Plan into Action2Develop a Plan1Set Insurance Goals
5 Home and Motor Vehicle Insurance Chapter22Homeowners Policy Coverage
6 Property and Liability Insurance Home and Motor Vehicle InsuranceChapter22Section 1Insurance and Risk ManagementProperty and Liability InsuranceTwo Types of Risks for Property OwnersLoss or Damage Caused by Criminal BehaviorPhysical Damage Caused by Perils
7 Renters Insurance 22 Renters Insurance Home and Motor Vehicle InsuranceChapter22Section 2Home and Property InsuranceRenters InsuranceRenters InsuranceDoes not provide coverage on the building or other structuresProtects personal propertyNo coverage under the landlords policy unless the landlord is liable for damageInexpensive
8 Home Insurance Policy Forms Home and Motor Vehicle InsuranceChapter22Section 2Home and Property InsuranceHome Insurance Policy Forms
9 Home Insurance Cost Factors Home and Motor Vehicle InsuranceChapter22Section 2Home and Property InsuranceHome Insurance Cost FactorsLocation of HomeCompany DifferencesType of StructureFactors Affecting the Cost of Home InsuranceHome Insurance DiscountsPrice, Coverage Amount, Policy Type
10 22 Home and Motor Vehicle Insurance Section 2 Chapter22Section 2Home and Property InsuranceMany insurance companies will not want to sell homeowners insurance policies to everyone in the same neighborhood. Infer why this might be the case.Responses might include that if a natural disaster were to occur it would be too expensive for one company to cover all the repairs and living expenses necessary for an entire neighborhood.
11 The Need for Auto Insurance Home and Motor Vehicle InsuranceChapter22Section 3Motor Vehicle InsuranceThe Need for Auto InsuranceEvery state in the United States has a financial responsibility law.
12 Liability covers you for injury to others or damage to their property Most states (including Michigan) require you to buy liability to legally driveLiability includes coverage for:Bodily injury of another personDamage to another persons property
13 The Need for Auto Insurance Home and Motor Vehicle InsuranceChapter22Section 3Motor Vehicle InsuranceThe Need for Auto Insurance
14 Motor Vehicle Bodily Injury Coverage Home and Motor Vehicle InsuranceChapter22Section 3Motor Vehicle InsuranceMotor Vehicle Bodily Injury Coverage
15 PremiumsYour yearly premium is the amount you pay per year.depends on coverage (bodily + property)What is your yearly premium if you buy 100/300/50 liability coverage?$ = $266.70
16 Collision and Comprehensive Insurance Collision – coverage for damage to your car by an accidentComprehensive – coverage for fire, theft, vandalism, and weatherDeductibles – amount you pay before the insurance company paysYour premium depends on your deductible (higher deductible = lower premium)
17 Collision and Comprehensive Insurance Example: You buy $200-deductiable collision insurance and $100-deductible comprehensive insurance. What is the total yearly premium?$ $ = $198.61
18 Premium Ratings Insurance premiums depend on ratings. Your rating depends on your age, gender, record, vehicle and the purpose for driving.Total premium = base ∙ rating
20 Other Motor Vehicle Insurance Coverages Home and Motor Vehicle InsuranceChapter22Section 3Motor Vehicle InsuranceOther Motor Vehicle Insurance CoveragesRental Reimbursement CoverageWage-Loss InsuranceTowing and Emergency Road Service Coverage
21 Motor Vehicle Insurance Costs Home and Motor Vehicle InsuranceChapter22Section 3Motor Vehicle InsuranceMotor Vehicle Insurance CostsLegal ConcernsAmount of CoverageProperty Values