Insurance & Risk Management

Can You Believe?  The number of insurance claims for auto accidents involving teens is ____% higher than those for adults.  Teen crash rates drop by ____% six months after getting their license.

Can You Believe?  In the latest survey available, ____% of the U.S. population experienced some level of disability in a year.  Head injuries cause about ____% of all bicycling fatalities.

Can You Believe?  There is a ____% chance you’ll be involved in an alcohol-related traffic accident at some point in your life.  At work, a disabling injury occurs every ____ seconds.

Can You Believe?  Sixteen-year-old drivers have ____ times the risk of being in a crash compared to 18-year-old drivers.

Why is it important to have insurance?  Risk – chance of loss from an event that cannot be controlled  Name two examples of unexpected events that may result in financial loss.

Insurance Policy  Policy – a contract that specifies what risks are covered and how much will be paid  Premium – money paid to purchase the policy  Experts say that buying insurance is buying financial security. Do you think this is true? Why or why not?

Deductible/Co-Insurance before $100-$1,000+  Deductible - Money you must pay before the insurance company begins to reimburse you. $100-$1,000+  Co-Insurance – A percentage of the accident/injury or flat fee you must pay Why should you shop around for the best rates?  Why should you shop around for the best rates?

How Insurance Works Suppose there are 100 people in a group 2. 1% chance 2. With a 1% chance that any one of them could get sick and require $10,000 in medical care But, no one knows who will get sick If each person pays $100 into a “pool” they will collectively have $10,000 to cover the medical costs of the person who gets sick So, everyone gives up $100, but nobody loses more than $ people do not collect anything, but they gain peace of mind and protection against loss but at a cost to the individual Insurance shifts the burden of loss from the individual to the Insurance Company, but at a cost to the individual!

Hmmmm…..  Why is the best outcome to have insurance but never collect on it? insurance but never collect on it?

Types of Insurance Automobile Health Homeowners/Renters Life Disability

Auto Insurance  Premium and Deductible  BI/Liability and Property Coverage 100/300/50  Uninsured Motorist - PIP  Collision  Comprehensive

You Do The Math  Carlos was in an auto accident that resulted in $3,788 worth of damage to his car. Carlos has a $500 deductible and a 20% co-insurance on his policy.  How much does Carlos pay and how much does insurance pay?

Auto Policies  Age  Gender  Marital Status  Type of Car  Mileage  Location  Cost of Repairs  Driving Record The following factors can influence the cost of the policy.

Health Insurance  Pays the medical bills in case you or your family members, become sick or injured.  Most will cover you until age 21. You may be covered under your parents’ policy until the age of 26.

Which Insurance Policy Would You Choose? Premium Amount/Month Current PolicyNew Policy Deductible Amount$300$200 Co-Insurance Amount $200$ % paid by policy holder, 80% paid by employer 0% paid by policyholder, 100% paid by employer Janet wants to make sure she has the best health insurance policy. She shopped around and received multiple quotes. What are the pro’s and con’s of each policy?

Property Insurance  Protects your material possessions in case they are damaged by fire, flood, or theft.  Homeowner’s Insurance vs. Renter’s Insurance

Life Insurance  Payment to beneficiaries if you die  Beneficiary – someone who benefits monetarily from your death  When would it be necessary to purchase life insurance?

Disability Insurance  Short Term and Long Term  Insurance to cover if you are disabled.  Name and describe two disabilities that you or your family might need disability insurance.

Future Insurance Needs  Auto Insurance including BI/Liability and Property Insurance  Health Insurance  Homeowner’s and Renter’s Insurance  Life Insurance  Disability Insurance

What Covers This Risk?  After back surgery you are unable to work for 6 months.

What Covers This Risk?  You take out a policy to ensure that your family is cared for after you pass away.

What Covers This Risk?  Congratulations, you are the proud parent of quadruplets!

What Covers This Risk?  Your home is destroyed by a tornado and you have to rebuild.

What Covers This Risk?  The car you are driving causes an accident and injures someone.