1. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Types of Insurance Auto Health Life Disability Homeowner’s/Renters http://www.lifehappens.org/insurance-101-in-a-flash/www.lifehappens.org/insurance-101-in-a-flash

2. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Risk, Responsibility, Reality This video clip gives an overview of insurance policies Risk, Responsibility, Reality Video Clip http://www.theiei.org/edu/materials/rrr/classroo m.wmv http://www.theiei.org/edu/materials/rrr/classroo m.wmv

3. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Risk Risk is the uncertainty about a situation’s outcome This can be unpredictable events which lead to loss or damage

4. ExposureRisk Potential Loss Accident or Illness PropertyOwnership Liability Loss of income from inability to work; uninsured medical bills; death Your property is damaged, destroyed, lost, or stolen You are found liable for injuries to other people or damages to their property UNLIMITED UNLIMITED Amount needed to replace your property Common Exposures to Loss 6-A

5. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Avoid it Share it Alternatives for Managing the Possibility of Loss Alternatives for Managing the Possibility of Loss Accept it 6-B Reduce it Share it

6. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Insurance Terminology Insurance is an arrangement between an individual (consumer) and an insurer (insurance company) to protect the individual against risk A policy is a contract between the individual and the insurer specifying the terms of the insurance arrangements

7. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Insurance Terminology A policyholder is a consumer who purchases the policy A premium is a fee paid to the insurer to be covered under specified terms A deductible is the amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins

8. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Types of Insurance Types of insurance can include: Automobile Health Life Disability Homeowners/Renters

9. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Automobile Insurance Automobile Insurance is an arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents

10. ?AVOIDNIGHTDRIVING ALWAYSWEARSEATBELTS? ? ? ?OBEYSPEEDLIMITS MANAGING LOSS FROM INJURY INJURY IN A CARACCIDENT 6-C

11. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Automobile Insurance Types There are four types of coverage for Automobile Insurance: Liability insurance Medical payment insurance Uninsured or underinsured motorists insurance Physical damage insurance Collision Comprehensive

12. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Liability Insurance Liability Insurance covers the insured if injuries or damages are caused to other people or their property. It is the minimum amount of insurance required by law for automobiles

13. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Medical Payment insurance Medical Payment Insurance covers injuries sustained by the driver of the insured vehicle or any passenger regardless of fault It also covers family members injured as passengers or if injured as a pedestrian

14. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Uninsured motorists insurance Uninsured or Underinsured Motorists Insurance covers injury or damage to the driver, passengers, or the vehicle caused by a driver with insufficient insurance

15. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Physical damage insurance Physical Damage Insurance covers damages caused to the vehicle Collision – covers a collision with another object, car, or from a rollover Comprehensive – covers all physical damage losses except collision and other specified losses

16. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Auto Insurance Coverage Suggested Minimums Coverage Type Suggested Minimum Coverage Liability Medical Payments Uninsured / Underinsured Motorist $100,000 per person $300,000 per accident $100,000 per person $300,000 per accident $10,000 per person 6-G

17. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Factors Affecting Automobile Insurance Costs Your age Make of car Marital status Do you take the car to work? If you’re a good student Gender Where you live How much you use the car Credit rating Driver’s education Driving record Type of car 6-F

18. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 How to Save Money on Insurance How to Save Money on Insurance Shop at least three places; compare rates and policies; ask about discounts and special rates. Shop at least three places; compare rates and policies; ask about discounts and special rates. Read sources of information such as Consumer Reports ®. Read sources of information such as Consumer Reports ®. Purchase more than one type of insurance from the same company; insure all cars with the same company. Purchase more than one type of insurance from the same company; insure all cars with the same company. 6-J-1 1 of 3 321

19. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 How to Save Money on Insurance How to Save Money on Insurance Choose the right car. Choose the right car. Don’t smoke. Don’t smoke. Select a higher deductible. Select a higher deductible. Carefully consider before adding riders or floaters. Carefully consider before adding riders or floaters. Have a good driving record & good grades (“B” or better). Have a good driving record & good grades (“B” or better). 6-J-2 2 of 3 321

20. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 How to Save Money on Insurance Ask about discounts. Eliminate collision and comprehensive coverage if car is older. Reduce your daily driving. Drive defensively. Avoid theft and vandalism. Avoid filing excessive claims. Keep tabs on credit. 6-J-3 3 of 3 321

21. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Health Insurance In 2005 there were nearly 47 million Americans or 16 percent of the population without health insurance (http://www.nchc.org/facts/coverage.shtml )http://www.nchc.org/facts/coverage.shtml Health insurance provides protection against financial losses resulting from injury, illness, and disability Health insurance may cover hospital, surgical, dental, vision, long-term care, prescription, or other major expenditures Health insurance may be purchased by the individual or through their employer

22. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Life Insurance Life insurance is a contract between an insurer and policyholder specifying a sum to be paid to a beneficiary upon the insured’s death The contract is a policy which states the amount to be paid to the beneficiary upon the insured person’s death

23. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Life Insurance A beneficiary is the recipient of any policy proceeds if the insured person dies A dependent is a person who relies on someone else financially

24. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Disability Insurance Disability Insurance replaces a portion of one’s income if they become unable to work due to illness or injury

25. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Homeowner’s/Renter’s Insurance Homeowner’s Insurance combines property and liability insurance into one policy to protect a home from damage costs due to perils. A peril is an event which can cause a financial loss like fire, falling trees, lightning and others

26. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Property Insurance Property Insurance protects the insured from financial losses due to destruction or damage to property or possessions Liability Insurance protects the insured party from being held liable for other’s financial losses Homeowner’s insurance should cover the replacement cost which will pay to rebuild the home if it is completely destroyed

27. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Renter’s Insurance Renter’s Insurance protects the insured from loss of the contents of the dwelling rather than the dwelling itself Renter’s insurance may be provided by a parent or guardian while an individual is still a full time student or under the age of 18 However, each policy is different and should be inspected by the policy holder

28. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? You apartment is broken into and your computer is stolen Renters!

29. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? You are injured in an automobile accident and are unable to work for 2 months Disability!

30. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? Your garage was destroyed by a fire which started by a lightning bolt hitting your home Homeowners!

31. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? You hit and injure a pedestrian in a crosswalk Automobile!

32. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? After losing her husband to a heart attack, the wife is left alone to care for 2 children Life!

33. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? You need a cast after breaking an ankle while roller-blading Health!

34. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? Sick at home from food poisoning after eating a carnival corndog Nothing!

35. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? You have brake failure. You hit a telephone pole and cause damage to the front of the car AUTOMOBILE

36. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? You get pulled over and receive a speeding ticket on your way to the mall Nothing!

37. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? A daughter, who is financially responsible for her mother’s nursing home bills, dies from an undetected heart defect Life!

38. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 What Covers This Risk? A doctor diagnoses a child with tonsillitis during a visit to a clinic Health!

39. © Family Economics & Financial Education – Updated April 2008 – Insurance Unit – Types of Insurance Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the University of Arizona 1.10.1.G1 Conclusion Review the following terms and concepts: Risk Insurance Policy Policyholder Premium Deductible Types of Insurance