Insurance

1. Insurance Take Charge of Your Finances 1.10.1.G1

2. Risk, Responsibility, Reality • This video clip gives an overview of insurance policies • Risk, Responsibility, Reality Video Clip • http://www.theiei.org/edu/materials/rrr/classroom.wmv

3. Risk • Risk is the uncertainty about a situation’s outcome • This can be unpredictable events which lead to loss or damage

4. 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

5. 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

6. Types of Insurance • Types of insurance can include: • Automobile • Health • Life • Disability • Homeowners/Renters

7. Automobile Insurance • Automobile Insurance is an arrangement between an individual (consumer) and insurer (insurance company) to protect the individual against risk from automobile accidents

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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 ) • 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

14. 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

15. 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

16. What Covers This Risk? • You hit and injure a pedestrian in a crosswalk Automobile!

17. What Covers This Risk? • After losing her husband to a heart attack, the wife is left alone to care for 2 children Life!

18. What Covers This Risk? • You need a cast after breaking an ankle while roller-blading Health!

19. Disability Insurance • Disability Insurance replaces a portion of one’s income if they become unable to work due to illness or injury

20. 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

21. 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

22. 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

23. What Covers This Risk? • You apartment is broken into and your computer is stolen Renters!

24. What Covers This Risk? • You are injured in an automobile accident and are unable to work for 2 months Disability!

25. What Covers This Risk? • Your garage was destroyed by a fire which started by a lightning bolt hitting your home Homeowners!

26. Conclusion • Review the following terms and concepts: • Risk • Insurance • Policy • Policyholder • Premium • Deductible • Types of Insurance

27. What Covers This Risk? • Sick at home from food poisoning after eating a carnival corndog Nothing!

28. What Covers This Risk? • You have brake failure. You hit a telephone pole and cause damage to the front of the car Automobile!

29. What Covers This Risk? • You get pulled over and receive a speeding ticket on your way to the mall Nothing!

30. What Covers This Risk? • A daughter, who is financially responsible for her mother’s nursing home bills, dies from an undetected heart defect Life!

31. What Covers This Risk? • A doctor diagnoses a child with tonsillitis during a visit to a clinic Health!