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RISK MANAGEMENT

RISK MANAGEMENT. Insurance – Part II. DISABILITY INCOME. INSURANCE. DISABILITY INCOME. DISABILITY INCOME. AUTOMOBILE. HOMEOWNERS. RENTERS. UMBRELLA COVERAGE. MUTUAL GUARANTEE. SOCIAL SECURITY. MEDIGAP. LONG-TERM CARE. MEDICAID. HEALTH. DISABILITY INCOME. Types of Disabilities

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RISK MANAGEMENT

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  1. RISK MANAGEMENT Insurance – Part II

  2. DISABILITY INCOME INSURANCE • DISABILITY INCOME • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  3. DISABILITY INCOME Types of Disabilities • Total • Partial • Permanent • Temporary Social Security Disability Income • Total AND Permanent Disabilities • 95% of first time applications denied Restrictions on Payment • Elimination period • Probationary period • Maximum benefits – DOLLAR LIMIT of benefits Less Expensive Option– Business Overhead Insurance - Inability to perform employment functions –No employment functions – Some employment functions – Never perform employment functions – Will regain the ability to perform employment functions – time between PURCHASE of policy and payment of an claim – time between ONSET OF SICKNESS or illness to payment of claim

  4. AUTOMOBILE INSURANCE • DISABILITY INCOME • AUTOMOBILE • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  5. AUTOMOBILE Remember MULCE M Medical payments to cover yourself U Uninsured or Underinsured motorist L Liability – medical and property damage of the OTHER driver • Example: 100 / 300 / 50 • $100,000 medical coverage per person • $300,000 medical coverage per accident • $50,000 in property damage

  6. AUTOMOBILE Remember MULCE M Medical payments to cover yourself U Uninsured or Underinsured motorist L Liability – medical and property damage of the OTHER driver • Example: 100 / 300 / 50 • $100,000 medical coverage per person • $300,000 medical coverage per accident • $50,000 in property damage C Collision/Comprehensive – damage to YOUR car E Emergency Road Service Comparison Shopping in Utah • http://www.insurance.utah.gov/docs/2008ComparisonTables.pdf

  7. AUTOMOBILE (d) Specific eligibility requirements. Generally restricted to military officers and their families. (e) Specific eligibility requirements. Generally restricted to enlisted military personnel and ex-dependents of USAA members.

  8. HOMEOWNERS INSURANCE • DISABILITY INCOME • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  9. HOMEOWNERS Covers • Home – damage • Personal Property – on the premises • Liability – Individuals injured while on your property • Seven different levels of homeowners insurance

  10. HOMEOWNERS • Seven different levels of homeowners insurance • HO–1 – Basic Form – Perils 1-11 - fire, lightning, explosions, hail, riots, vehicles, aircraft, smoke, vandalism, theft malicious mischief, glass breakage • HO–2 – Broad Form – Perils 1-18 - everything in HO-1 plus falling objects, weight of ice, snow or sleet, the collapse of buildings, overflow of water or steam, power surges, an the explosion of steam or hot-water systems, frozen plumbing, heating units, air-conditioning systems, and domestic appliances • HO–3 – Special Form – All Perils unless specifically excluded - Events traditionally not covered include earthquakes, floods, termites, war and nuclear accidents. Also protects personal assets against events listed in HO-2 • HO–4 – Renter Broad Form – Renter’s insurance. Protects personal assets from theft, fire, vandalism and smoke • HO–5 – Special Form + – similar to HO-3 plus slightly more coverage of personal assets • HO–6 – Condominium – condominium owner’s insurance. Protects personal assets from theft, fire, vandalism and smoke • HO–8 – Older Homes – same events as in HO-1 but based on repairs or actual cash value of home, not replacement costs

  11. HOMEOWNERS • Perils or risks • fire, lightning • windstorm, hail • explosions • riots • aircraft • non home owner vehicles • smoke • vandalism, malicious mischief • theft • glass breakage • volcanic eruption • external falling objects • weight of ice, snow, sleet • collapse of buildings • overflow of water or steam from plumbing, heating or air conditioning • bursting, cracking, burning or bulging of a steam or hot water heating system or appliances • freezing of plumbing, heating or air conditioning systems and home appliances • injury to electrical appliances from short circuits or other currents • All other perils or risks unless excepted number coverage ‘Named Perils’ coverage HO-1 for older homes HO-8 ‘cash value’ not ‘replacement’ HO-2 ‘All Risks’ coverage HO-3 more personal asset coverage HO-5 Apartment Owners – HO-4 Condominium Owners – HO-6

  12. HOMEOWNERS Covers • Home – damage • Personal Property – on the premises • Liability – Individuals injured while on your property • Seven different levels of homeowners insurance • Exclusions – Common

  13. HOMEOWNERS • 10 Common Exclusions • floods, earthquakes, landslides • mold damage • aggressive dog breeds • neglect • sewage backup • luxury items • power outages • intentional damage by a resident • war, terrorism, nuclear attacks • trampolines • Perils or risks • fire, lightning • windstorm, hail • explosions • riots • aircraft • non home owner vehicles • smoke • vandalism, malicious mischief • theft • glass breakage • volcanic eruption • external falling objects • weight of ice, snow, sleet • collapse of buildings • overflow of water or steam from plumbing, heating or air conditioning • bursting, cracking, burning or bulging of a steam or hot water heating system or appliances • freezing of plumbing, heating or air conditioning systems and home appliances • injury to electrical appliances from short circuits or other currents • All other perils or risks unless excepted

  14. HOMEOWNERS Covers • Home – damage • Personal Property – on the premises • Liability – Individuals injured while on your property • Seven different levels of homeowners insurance • Exclusions– Common • Floods and Earthquakes – purchase separate (relatively expensive) coverage • Comparison Shopping • http://www.insurance.utah.gov/docs/2008ComparisonTables.pdf

  15. HOMEOWNERS HO-3 Coverage

  16. RENTERS INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  17. RENTERS Does not cover structure – Landlord has to purchase Does cover personal property Fairly inexpensive – Add on to automobile coverage

  18. UMBRELLA COVERAGE INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  19. UMBRELLA COVERAGE Double or triple the coverage of a home owner policy or automobile policy Can include other types of coverage: • False Arrest • Libel • Slander Relatively inexpensive

  20. MUTUAL GUARANTEE ASSOCIATIONS INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  21. MUTUAL GUARANTEE ASSOCIATIONS Insurance for Insurance Companies Life & Health Mutual Guarantee Association Property & Casualty Mutual Guarantee Association Companies licensed in state pay premiums Not state funded – State supervised – No federal or state guarantee (Not FDIC Insured) Back outstanding policies/claims of BANKRUPT insurance companies

  22. SOCIAL SECURITY INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  23. SOCIAL SECURITY • Retirement Income– Most popular • Survivors Benefit • – a widower: • at least 60 years old • with children under 16 or a disabled child in their care • disabled • – a child of a deceased worker: • under the age of 18 • an adult disabled before the age of 22 • high school student under the age of 19 • – a parent of a deceased worker • At least 62 years old • Dependent on the deceased worker Death Benefit– $255.00 if surviving spouse Disability Income– Remember ‘Total and Permanent’ • Social Security Disability Insurance (SSDI) – Based on PRIOR WORK • Supplemental Security Income (SSI) – Based on FINANCIAL NEED

  24. SOCIAL SECURITY Social Security Official 2012 Social Security On-line http://www.ssa.gov/OP_Home/handbook/

  25. SOCIAL SECURITY Medicare • Part A – Hospital insurance – No charge for covered worker • Part B – Medical Insurance • Optional – but automatically covered if you don’t opt out • Pays for the doctor or providers • You pay a premium - $115.40 per month for 2011 • Federal Government subsidizes 70% of the cost • Part C – (Medicare + Choice / Medicare Advantage) • Allows you to receive all health care services through a private provider company • Must have Part A and Part B to enroll in Part C • Part D – Prescription drug coverage • Pay a premium • Must apply – not automatically covered Official 2012 United States Government Medicare Handbook http://www.medicare.gov/publications/pubs/pdf/10050.pdf

  26. SOCIAL SECURITY Medicare Official 2012 United States Government Medicare Handbook http://www.medicare.gov/publications/pubs/pdf/10050.pdf

  27. MEDIGAP INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH

  28. MEDIGAP Medigap Policies(Supplemental Policies) • Pays where social security will not cover • Ten coverage types lettered ‘A through J’ • A wise consumer purchase Most Comprehensive

  29. MEDIGAP Medigap Policies(Supplemental Policies) Official 2011 United States Government Medicaid Handbook http://www.medicare.gov/publications/pubs/pdf/02110.pdf

  30. LONG-TERM CARE INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • LONG-TERM CARE • MEDICAID • HEALTH

  31. LONG-TERM CARE Potentially the largest financial risk 65% of people will spend some time in LTC Financial hardship if stay is more than one year 6% of women and 3% of men for more than 1 year Consumer guide: U.S. Department of Agriculture and America’s Health Insurance Plans http://publications.usa.gov/USAPubs.php?PubID=5879

  32. MEDICAID INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • MEDICAID • HEALTH

  33. MEDICAID ‘Poor man’s insurance’ you only qualify if you are very poor Funding – combination of State and Federal funds Administered by each State

  34. MEDICAID • On-line consumers’ guide http://www.onlinemedicaidguide.com/

  35. HEALTH INSURANCE • DISABILITY INCOME • AUTOMOBILE • HOMEOWNERS • RENTERS • UMBRELLA COVERAGE • MUTUAL GUARANTEE • SOCIAL SECURITY • MEDIGAP • LONG-TERM CARE • MEDICAID • HEALTH • HEALTH

  36. RISK MANAGEMENT Insurance – Part II

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