1. Chapter 25 Introduction to Risk Management
MYPF CHAPTER 25
13-SEPT-2001
Chapter 25 Introduction to Risk Management
What Is Insurance?
Risk Management?
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2. Spreading the Risk
Insurance is a method for spreading individual risk among a large group of people to make losses more affordable for all.
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3. Insurance Terminology p. 607
Actuarial table
Actuary
Beneficiary
Benefits
Cash value
Claim
Coverage
Deductible
Exclusions
Face amount
Grace period
Hazard
Insurance agent
Insured
Loss
Peril
Proof of loss
Standard policy
Unearned premium
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4. Insurable Risks Personal risks Property risks
Are the chances of loss involving your income and standard of living.
Ex life, health and disability insurance
Property risks
The chances of loss or harm to personal or real property.
Ex home, and car insurance
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5. Insurable risk cont. Liability risks
Are the chances of loss that may occur when your errors or inappropriate actions result in bodily injury to someone else or damage to someone else property.
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6. Risk Management
Is an organized strategy for controlling financial loss from pure risks.
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7. Risk-Management Process
Step 1: Identify risks of loss
Pure risk
Chance of loss with no chance of gain ( usually insurable)
Speculative risk
A risk that may result in either gain or loss. Ex stock
Step 2: Assess seriousness of risks
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8. Risk-Management Process
Step 3: Handle risks
Risk avoidance
Eliminate by not doing the activity.
Risk reduction
Ex. Put seat belt on
Risk assumption
Establish monetary fund to cover loss
Risk transfer (shift)
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9. Making a Risk-Management Plan
List identified risks.
List assessment of risks’ financial impact.
List techniques to manage each risk.
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10. Reducing Insurance Costs
Increase deductibles.
Purchase group insurance.
Consider payment options.
Look for discount opportunities.
Comparison shop.
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11. Chapter 26 Property and Liability Insurance
MYPF CHAPTER 26
13-SEPT-2001
Chapter 26 Property and Liability Insurance
Property Insurance
Automobile and Umbrella Insurance
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12. Lesson 26.1 Property Insurance
Explain the purpose of renter’s and homeowner’s insurance.
Describe fire, theft, and other forms of property insurance policies.
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13. Renter’s Insurance Property risk Liability risk
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14. Homeowner’s Insurance
How much coverage do you need?
Physical damage coverage
Theft and vandalism coverage
Liability coverage
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15. Homeowner’s Policies HO-1 Basic Coverage HO-2 Broad Form
HO-3 Special Form
HO-4 Renter’s
HO-5 Comprehensive
HO-6 Condominium Owner’s
HO-7 Older Homes
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16. Lesson 26.2 Automobile and Umbrella Insurance
Discuss common types of automobile insurance coverage.
Explain the concept of liability insurance and an umbrella policy.
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17. Automobile Insurance Cost of automobile insurance
Types of automobile insurance coverage
No-fault insurance
Assigned-risk policies
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18. Cost of Automobile Insurance
Model, style, and age of car
Driver classification
Location
Distance driven
Purpose of driving
Age and sex of other regular drivers of the car
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19. Types of Automobile Insurance Coverage
Liability coverage
Collision coverage
Comprehensive coverage
Personal injury protection (PIP)
Uninsured/underinsured motorist coverage
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20. Umbrella Liability Insurance
Personal catastrophe policy
Supplements your basic auto and property liability coverage
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21. Chapter 27 Health and Life Insurance
MYPF CHAPTER 27
13-SEPT-2001
Chapter 27 Health and Life Insurance
Health Insurance
Disability and Life Insurance
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22. Lesson 27.1 Health Insurance
Describe group and individual health insurance plans.
Discuss common types of health insurance coverage and plans.
Explain Medicare and Medicaid coverage.
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23. Group and Individual Health Plans
Group policies
Group health insurance
COBRA
Coordination of benefits
Individual policies
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24. Types of Health Insurance Coverage
Basic health insurance
Major medical expense insurance
Dental and vision insurance
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25. Private Health Plans Unmanaged (traditional fee-for-service) plans
Managed-care plans
Preferred provider organization (PPO)
Health maintenance organization (HMO)
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26. Health Savings Accounts
Set aside money to pay medical expenses not paid by insurance.
Contributions are tax deductible.
Employer may contribute to account.
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27. Medicare and Medicaid
Medicare: Government-sponsored health insurance for people age 65 or older
Medicaid: Government-sponsored health insurance for people with low incomes and limited resources
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28. Lesson 27.2 Disability and Life Insurance
Discuss different types of disability insurance.
Describe the characteristics of different life insurance plans.
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29. Disability Insurance Group disability insurance
Social security disability insurance
Workers’ compensation insurance
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30. Life Insurance Provisions of life insurance policies
Types of life insurance
Temporary life insurance
Permanent life insurance
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