1. Unit 8: INSURANCE

2. 1. According to the Unit 8 reading: Risk is defined as …..
Chance of loss from some type of danger.

3. 2. Define Risk Management
How you deal with the chance of a potential personal or financial loss

4. Avoid risk - walk Reduce risk – slow down Accept risk –
3. Identify the four options for managing your risk : use DRIVING as example
Avoid risk -
walk
Reduce risk –
slow down
Accept risk –
Do not buy insurance
Share risk –
Insurance

5. 4. Identify three potential risks that teens face
4. Identify three potential risks that teens face. For each one, explain how a teen can reduce the risk of that specific situation or avoid the risk all together.

6. 5. Define Insurance -
Guaranteeing your financial protection against various risks

7. 6. Define Insurance policy –
Written contract detailing what an insurance company will cover, how much it will pay, and how much you will pay

8. 7. Define Premium - Amount you pay for an insurance policy
#8. How can premiums be paid?
Monthly, quarterly, semi-annually, annually

9. 9. Explain why Insurance is considered “sharing the risk”?
If you take the risk of driving and do not have insurance, then you own all the risk and take all of the responsibility to pay
If you take the risk of driving and you do buy insurance, then you own a % of the risk and share a % of the risk with the insurance company.
You take some responsibility to pay and the insurance company shares some of the responsibility to pay

10. 10. List 4 factors that affect your insurance premium:
Type of …and Amount of…Insurance you choose.
Size of deductible
Various companies
Age
Marital status
Where you live
Credit History

11. 11. In the US, insurance is a … and not a …..
PRIVILEGE
RIGHT

12. 12. Define coverage limit –
Max amount the insurance co. will pay

13. 13. Define deductible
The amount of a loss you must pay “out of pocket” before the insurance co. will pay the rest.

14. 14. If you have health insurance and need a minor surgery that costs $ Your deductible is $500. How much will you pay and how much will your insurance pay?
Bill $2000 Pay your deductible $500 Balance = $1500 – paid by insurance co.

15. 15. If your deductible is higher, your premiums are usually …
Lower
Why do
You think?

16. 16. What’s the benefit if you have multiple insurance policies from the same agent/company?
Discounts
Lower premiums
Name some
Insurance co’s.

17. 17. Make a list of at least three personal belongings that you would hate to lose. Estimate and write the approximate cost to replace them.
House Car Wedding Ring $200,000
$10,000
My life

18. 18. Factors affecting Auto Ins.
Age
Older = lower
Gender
Female = lower
Marital Status
Married = lower
Type of Car
Family car = lower
How often you use car
Less = lower
Location
Rural = lower
Driving Record
Clean = lower
Claim Record
Less = lower
Credit History
Higher = lower

19. 19. Is it cheaper to be on your parent’s insurance, or to buy your own?

20. 20. Types of Coverage General Liability
Covers damage you cause to others property and/or bodily injury outside of your car
Medical Payment
Bodily injury expenses to you and people inside of your car
Also covers you in accident with car if you are on foot or bike or in a friend’s car

21. Collision
covers damages you cause to your car (accident with another car or object)
Comprehensive
Fire, vandalism, break in, theft, natural disasters (anything except actual collision)
Uninsured Motorist
Lost wages and medical expenses if you are in accident with driver with no insurance

22. Underinsured Motorist
Covers you when the cost of repairs (accident caused by another driver) exceeds his coverage limits